Sweetgreen (NYSE:SG) Announces Earnings Results

Key Points

• Sweetgreen missed quarterly expectations: The company reported an adjusted loss of $0.22 per share versus the expected $0.13 loss, while revenue rose 3.8% year over year to $192.66 million but fell slightly short of estimates.
• Food-safety concerns significantly weakened performance and outlook: Comparable sales declined 6.2%, restaurant-level margin dropped to 13.1%, and management expects fiscal 2026 comparable sales to fall 7%–8% with adjusted EBITDA of negative $23 million to $27 million.
• Shares fell 8.2% as analysts cut price targets: Sweetgreen stock traded near $5.39, while Wells Fargo reduced its target to $6 and TD Cowen cut its target to $5; however, management cited improving transaction trends and operational initiatives as potential recovery drivers.

Sweetgreen (NYSE:SG - Get Free Report) posted its quarterly earnings results on Thursday. The company reported ($0.22) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of ($0.13) by ($0.09), FiscalAI reports. The company had revenue of $192.66 million during the quarter, compared to analyst estimates of $194.50 million. Sweetgreen had a net margin of 2.01% and a negative return on equity of 34.03%. Sweetgreen's revenue for the quarter was up 3.8% on a year-over-year basis. During the same period in the prior year, the business earned ($0.20) EPS.

Here are the key takeaways from Sweetgreen's conference call:

• Second-quarter performance weakened: Comparable restaurant sales declined 6.2%, restaurant-level margin fell to 13.1% from 18.9% a year earlier, and adjusted EBITDA turned to a $0.2 million loss.
• Food-safety headlines disrupted momentum and lowered guidance. Management estimated the Cyclospora-related impact at roughly 600 basis points to July comparable sales and now expects fiscal 2026 comparable sales to decline 7%–8%, restaurant-level margin of 10.5%–11%, and adjusted EBITDA of negative $23 million to $27 million.
• Operational trends improved through the quarter: Comparable transactions progressed from down 11.2% in Q1 to roughly flat in June, while throughput initiatives lifted peak entrees prepared per hour at high-volume restaurants from the low 50s to the low 60s.
• Wraps are driving engagement but pressuring average checks. They reached approximately 20% incidence, increased transaction trends and repeat visits, and appealed to Gen Z customers, but their lower entry price contributed to product-mix pressure; management plans additional wrap innovation and broader customer-acquisition efforts.
• Management is pursuing targeted growth and efficiency initiatives: These include broader top-of-funnel marketing, loyalty personalization, a simplified create-your-own pricing test, food-waste reduction, restaurant-specific labor deployment, and conservative new-unit development focused on higher-return sites.

Sweetgreen Trading Down 8.2%

Shares of NYSE SG traded down $0.48 during trading hours on Friday, reaching $5.39. The stock had a trading volume of 17,399,888 shares, compared to its average volume of 6,390,480. The firm has a 50-day moving average of $7.66 and a 200-day moving average of $6.85. The firm has a market cap of $640.49 million, a price-to-earnings ratio of 53.91 and a beta of 2.19. Sweetgreen has a fifty-two week low of $4.49 and a fifty-two week high of $10.63.

Institutional Trading of Sweetgreen

Large investors have recently bought and sold shares of the business. Caden Capital Partners LP acquired a new stake in shares of Sweetgreen in the 4th quarter worth $104,000. Mariner LLC acquired a new stake in Sweetgreen in the fourth quarter valued at about $143,000. Brooklyn Investment Group purchased a new stake in Sweetgreen in the 4th quarter valued at approximately $145,000. Commonwealth Equity Services LLC acquired a new position in Sweetgreen during the 4th quarter worth approximately $142,000. Finally, WINTON GROUP Ltd acquired a new position in Sweetgreen during the 4th quarter worth approximately $127,000. Institutional investors and hedge funds own 95.75% of the company's stock.

Key Stories Impacting Sweetgreen

Here are the key news stories impacting Sweetgreen this week:

• Positive Sentiment: Second-quarter revenue increased 3.8% year over year to $192.66 million, indicating continued sales growth despite the challenging environment. Oppenheimer maintained an “outperform” rating, although it reduced its price target from $10 to $8.50. Oppenheimer lowers Sweetgreen price target
• Neutral Sentiment: Sweetgreen said it has not been implicated in the ongoing cyclospora outbreak, but consumer concerns about fresh produce are affecting traffic. The company removed jalapeños from its offerings amid the broader food-safety concerns. Sweetgreen cuts full-year outlook as cyclospora fears weigh on sales
• Negative Sentiment: Sweetgreen reported a second-quarter loss of $0.22 per share, wider than the $0.13 loss analysts expected and worse than the $0.20 loss a year earlier. Revenue also fell slightly short of estimates. Sweetgreen reports second-quarter loss and misses revenue estimates
• Negative Sentiment: Same-store sales declined 6.2% in the quarter, marking the chain’s sixth consecutive comparable-sales decline. Management now expects full-year same-store sales to fall 7%–8%, reflecting weaker customer demand linked to cyclospora fears. Sweetgreen shares slide as cyclosporiasis fears prompt forecast cut
• Negative Sentiment: Analysts lowered their valuations following the earnings release: Wells Fargo cut its target from $7 to $6, while TD Cowen reduced its target from $8 to $5 and assigned a “hold” rating. Analysts lower Sweetgreen price targets

Wall Street Analyst Weigh In

A number of analysts have weighed in on the company. JPMorgan Chase & Co. upgraded Sweetgreen from a "neutral" rating to an "overweight" rating and raised their price target for the company from $8.00 to $13.00 in a research note on Friday, May 22nd. TD Cowen dropped their price objective on Sweetgreen from $8.00 to $5.00 and set a "hold" rating on the stock in a report on Friday. Wells Fargo & Company cut their target price on Sweetgreen from $7.00 to $6.00 and set an "equal weight" rating on the stock in a research report on Friday. UBS Group restated a "buy" rating on shares of Sweetgreen in a research report on Friday. Finally, Wall Street Zen upgraded shares of Sweetgreen from a "strong sell" rating to a "sell" rating in a report on Saturday, May 23rd. Four research analysts have rated the stock with a Buy rating, eleven have assigned a Hold rating and three have assigned a Sell rating to the company. Based on data from MarketBeat, Sweetgreen presently has an average rating of "Hold" and a consensus price target of $7.19.

Sweetgreen Company Profile

Sweetgreen, Inc is a fast-casual restaurant chain specializing in salads, grain bowls and warm bowls that emphasize fresh, locally sourced ingredients. Since its founding in 2007 by Jonathan Neman, Nicolas Jammet and Nathaniel Ru, Sweetgreen has focused on sustainable agriculture, working with regional farmers across the United States to provide seasonal produce and promote environmentally responsible sourcing practices. The company's menu features a variety of plant-forward options, including custom-build salads, chef-curated bowls and limited-time offerings that reflect changing harvests.

Sweetgreen operates a technology-driven service model that combines in-store experiences with digital ordering through its mobile app and website.

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