If this is the bull case
I'm staying SHORT
At a recent conference presentation, SG said they will be breakeven in 2023 and profitable in 2024. To be clear, they will not generate positive net income; maybe they will print a few million in EBITDA, but that is only because they are downsizing employees. As a reminder, the middle of the P&L for SG is a disaster. If you are LONG SG because management told you "they remain confident on SG's path to profitability," what does that really mean? Also, who cares if they can reach 1,000 locations by 2030 if you can't grow profitability? Like SHAK, SG's growth in top-line sales is a function of return to the office, which does not appear to be promising post-Labor Day (according to Shak management at the same conference.) Lastly, if you have a concept the size of SG and have not rolled out a loyalty program, you are playing defense, not offense.
JOLTS are Telling a TALE
Lost of positive sentiment coming out of the GS conference. The chart below is just a friendly reminder of what the data is saying about what is going on - JOLTS are collapsing!
the Challenges continue
The pandemic has had a lasting impact on businesses throughout the country. In particular, the service industry has been hit hard by many of the changes that have come along with COVID. Consumers have also felt these changes as stores and restaurants struggle to hire staff and stay open pre-COVID hours. Staffing issues are causing more customers to run into more problems in-store and online. Forty-five percent of U.S. adults have experienced longer wait times at restaurants, and nearly the same amount have longer hold times on customer service calls (44%). This just presents more challenges for in-dining room sales.
