What Happened?
Shares of casual salad chain Sweetgreen (NYSE:SG) jumped 5.4% in the morning session as equities soared (Nasdaq +0.9%, S&P 500 +0.55%) after The Bureau of Labor Statistics reported nonfarm payrolls for September 2024, which exceeded expectations. Notably, nonfarm payrolls increased by 254,000, significantly surpassing the consensus estimate of 150,000. In addition, the unemployment rate clocked in at 4.1%, slightly below analysts' expectations of 4.2%.
Overall, the report supports the Fed's favored "soft landing" narrative, suggesting that inflation can be controlled without significantly harming the economy. After the initial pop the shares cooled down to $34.86, up 3.7% from previous close.
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What The Market Is Telling Us
Sweetgreen’s shares are extremely volatile and have had 60 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock gained 44.6% on the news that the company reported first-quarter earnings results. Sweetgreen blew past analysts' revenue expectations as its same-store sales grew 5%, enabling it to raise its full-year revenue guidance. Its gross margin also outperformed Wall Street's estimates.
On the other hand, its EPS missed analysts' expectations, but the market cared more about its upbeat outlook. Overall, we think this was a good quarter that should please shareholders.
Sweetgreen is up 215% since the beginning of the year, and at $34.86 per share, it is trading close to its 52-week high of $37.65 from August 2024. Investors who bought $1,000 worth of Sweetgreen’s shares at the IPO in November 2021 would now be looking at an investment worth $703.79.
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