Axios Closer

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Friday ✅.

Today's newsletter is 680 words, a 3½-minute read.

🚨 Situational awareness: Mercedes-Benz workers in Alabama voted against joining the UAW.

🔔 The dashboard: The S&P 500 closed up 0.1%.

  • Biggest gainer? Valero Energy (+4.8%), the downstream petroleum company. ¯\_(ツ)_/¯
  • Biggest decliner? Paramount Global (-4.9%), as investors continue to digest speculation around its sale prospects.

1 big thing: Sweetgreen charts next path

Illustration: Shoshana Gordon/Axios

Sweetgreen appears well-positioned to ride new trends in the economy.

Why it matters: Restaurants have been among the slowest businesses to recover from the pandemic — battling financial hardship from closures and broken supply chains then worker shortages, inflation and the fallout of remote work.

CEO and co-founder Jonathan Neman doesn't expect "a step change in a return to office at this point" and that doesn't seem to worry him.

  • He's now steering Sweetgreen — in its third year as a publicly traded company — toward suburban expansion, in-store automation and beefed up menus (pun intended) to drive growth and to reach profitability.

Zoom in: "So much of our business was heavily dependent on urban and office traffic before COVID," he told me during a conversation yesterday on "Leading Indicator," a show from Public, an investing platform.

  • "[W]e've only gotten back to 50% of pre-COVID levels today," he added. "We've now seen kind of [that] this is the new normal."

Suburbs and exurbs are now some of the fastest-growing places in the country and where "most of" Sweetgreen's growth is taking place, said Neman.

  • "Four years ago, the company was 75% urban. Today, we're 50-50 and starting to lean more suburban."
  • With about 230 locations at the moment, the company aims to grow the number of its restaurants at a rate of 15%–20% a year by 2026.

Meanwhile, meat is on its menus now.

  • The move was made to attract more male customers, create more dinnertime demand and appeal to more markets across the country.

It's still too early to tell how its newly launched steak option will benefit the bottom line — but the brand's protein plates, which include salmon and chicken, have been a "huge driver" of same-store sales over the past few months, he said.

Go deeper

2. Charted: Meme stock GameStop crashes

A red line chart that displays the daily GameStop stock price from May 1-17, 2024. The price starts at $10.91, peaks at $48.75 on May 14, and crashes to $22.22 on May 17. Notably, there's a sharp increase from $17.46 to $30.45 on May 13, followed by a significant drop after May 14.
Data: Yahoo Finance; Chart: Axios Visuals

GameStop, the OG of meme stocks, closed down nearly 20% today after disclosing plans to sell more shares.

  • It also reported preliminary Q1 results that suggest revenue is down as much as nearly 30% from a year ago.

The big picture: Friday's crash put an end to this week's brief rally in the company's share price, which followed the return of meme stock investor Keith Gill, or "Roaring Kitty," to X.

3. What's happening

🎮 Call of Duty's next installment will reportedly be released on Microsoft's Xbox Game Pass subscription service. (WSJ)

⛳️ Top-ranked golfer Scottie Scheffler was arrested for an incident with a police officer on his drive to today's PGA Championship. (Axios)

4. Shein weighs U.S. or U.K. listing

The Shein opening party at O Beach Ibiza in Spain on May 3. Photo: Xavi Torrent/Getty Images for Shein

Shein's decision on where to IPO isn't final yet, as the company weighs the benefits of a U.S. or U.K. listing, sources familiar with the situation say.

Why it matters: Shein's choice of exchange could influence other Chinese companies also weighing IPOs, says Drew Bernstein, co-chairman of Marcum Asia CPAs.

State of play: Reuters reported the company could list on the London Stock Exchange as soon as this month, and Axios confirmed Shein is weighing a London IPO.

The intrigue: Shein's impetus to IPO is to be more transparent, a source close to the company's thinking says — but Shein's founder and CEO, Sky Xu, is intensely private.

  • That poses yet another risk, as spokesperson is one of the main jobs of the head of a publicly traded company.

Go deeper: If you need smart, quick intel on dealmaking in the retail industry for your job, get Axios Pro.

5. Generative AI comes for bedtime stories

Illustration: Natalie Peeples/Axios

Sweetgreen's Neman has found a few benefits for AI.

  • He says "it's important" to be curious about new technologies and that he hits the topic regularly with leaders across departments.
  • Employees are mainly using it at the moment for tasks like sales forecasts, but Neman sees potential in tapping it to create personalized nutrition products and menus for the mainstream.

🧸 1 fun thing: The most fun way he's been using generative AI is during bedtime with his kids.

  • "With my 3½-year-old — we'll write a story together. We'll ask him for some prompts on what [he wants] the story to be about. And I'll put his name in there and I'll sneak in some lessons I wanted to teach."

Today's newsletter was edited by Pete Gannon and copy edited by Sheryl Miller.

Disclosure: Hope was a paid moderator for the Sweetgreen conversation.

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