Sweetgreen (NYSE:SG) Shares Gap Down Following Weak Earnings

Key Points

• Sweetgreen shares fell sharply, opening at $5.43 versus a prior close of $5.87 and later trading near $5.11 after the weak earnings report.
• The company reported a second-quarter loss of $0.22 per share, worse than the expected $0.13 loss, while revenue rose 3.8% year over year to $192.66 million but missed estimates.
• Sweetgreen cut its full-year same-store-sales forecast to a 7%–8% decline amid consumer caution linked to cyclosporiasis fears; TD Cowen downgraded the stock to “hold” and lowered its price target to $5.

Sweetgreen, Inc. (NYSE:SG - Get Free Report)'s share price gapped down before the market opened on Friday following a dissappointing earnings announcement. The stock had previously closed at $5.87, but opened at $5.43. Sweetgreen shares last traded at $5.1050, with a volume of 3,761,084 shares trading hands.

The company reported ($0.22) earnings per share for the quarter, missing the consensus estimate of ($0.13) by ($0.09). The business had revenue of $192.66 million during the quarter, compared to the consensus estimate of $194.50 million. Sweetgreen had a negative return on equity of 33.07% and a net margin of 2.49%.The business's revenue for the quarter was up 3.8% compared to the same quarter last year. During the same period in the prior year, the firm earned ($0.20) EPS.

Key Sweetgreen News

Here are the key news stories impacting Sweetgreen this week:

• Positive Sentiment: Wells Fargo lowered its price target from $7 to $6 but maintained an “equal weight” rating, implying moderate potential upside from recent trading levels. Benzinga analyst action
• Neutral Sentiment: Sweetgreen’s quarterly revenue increased 3.8% year over year to $192.66 million, although growth was slightly below analysts’ expectations. The company’s market capitalization is approximately $620 million, and its shares remain near the lower end of their 52-week range.
• Negative Sentiment: TD Cowen cut its price target from $8 to $5 and downgraded its outlook to “hold,” signaling limited expected upside and reflecting concerns about near-term operating performance. Benzinga analyst action
• 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 reported a year earlier. Revenue also narrowly missed estimates. Sweetgreen second-quarter earnings
• Negative Sentiment: The company reduced its full-year same-store-sales outlook to a 7% to 8% decline as consumers became more cautious about eating fresh produce amid cyclosporiasis fears. The guidance cut indicates that the outbreak is affecting demand even without a direct link to Sweetgreen. Wall Street Journal outlook report CNBC outlook report
• Negative Sentiment: The outbreak-related demand concerns and forecast reduction have prompted a broad reassessment of Sweetgreen’s earnings prospects, weighing on the stock despite the company’s modest revenue growth. Reuters cyclosporiasis and forecast report

Analyst Ratings Changes

A number of equities analysts have recently issued reports on the company. Oppenheimer raised their price objective on Sweetgreen from $9.00 to $10.00 and gave the stock an "outperform" rating in a research report on Wednesday, May 20th. JPMorgan Chase & Co. raised shares of Sweetgreen from a "neutral" rating to an "overweight" rating and increased their target price for the company from $8.00 to $13.00 in a research report on Friday, May 22nd. Citigroup raised their price target on shares of Sweetgreen from $9.00 to $10.00 and gave the stock a "buy" rating in a report on Monday, July 20th. Weiss Ratings upgraded shares of Sweetgreen from a "sell (d)" rating to a "sell (d+)" rating in a research report on Friday, May 22nd. Finally, TD Cowen reduced their price objective on shares of Sweetgreen from $8.00 to $5.00 and set a "hold" rating on the stock in a research note on Friday. Five analysts have rated the stock with a Buy rating, ten have issued a Hold rating and three have assigned a Sell rating to the company's stock. According to data from MarketBeat.com, the stock has an average rating of "Hold" and an average price target of $7.47.

Hedge Funds Weigh In On Sweetgreen

Institutional investors and hedge funds have recently modified their holdings of the business. Royal Bank of Canada lifted its position in shares of Sweetgreen by 22.4% during the 1st quarter. Royal Bank of Canada now owns 291,477 shares of the company's stock valued at $7,292,000 after acquiring an additional 53,427 shares during the period. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. raised its holdings in shares of Sweetgreen by 6.2% during the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 60,572 shares of the company's stock valued at $1,516,000 after purchasing an additional 3,553 shares during the period. Prudential Financial Inc. bought a new position in shares of Sweetgreen during the 2nd quarter worth about $197,000. Qube Research & Technologies Ltd bought a new position in shares of Sweetgreen during the 2nd quarter worth about $538,000. Finally, Frontier Capital Management Co. LLC grew its stake in shares of Sweetgreen by 121.7% in the 2nd quarter. Frontier Capital Management Co. LLC now owns 680,255 shares of the company's stock valued at $10,122,000 after buying an additional 373,350 shares during the period. 95.75% of the stock is currently owned by institutional investors.

Sweetgreen Stock Performance

The company has a market capitalization of $609.00 million, a price-to-earnings ratio of 42.71 and a beta of 2.19. The company has a 50 day moving average price of $7.75 and a 200 day moving average price of $6.86.

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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