Sweetgreen cuts full-year outlook as cyclospora fears weigh on sales

Sweetgreen, the salad chain, has reduced its full-year outlook due to fears surrounding the cyclospora outbreak, which has already claimed at least 10,000 lives and led to two deaths. The company now anticipates a more substantial decrease in same-store sales, projecting a range of 7% to 8% decline for 2026, up from its earlier forecast of 2% to 4%.

The fear of eating fresh produce during the outbreak has deterred many consumers from visiting salad chains. Sweetgreen's shares plummeted more than 15% in extended trading following the announcement. Despite not being directly implicated in the outbreak, Sweetgreen has faced a decline in sales, exacerbated by the overall decrease in demand for fresh prepared foods.

The Food and Drug Administration has linked the outbreak to iceberg lettuce supplied by a Taylor Farms facility in central Mexico, which has since been recalled. Other restaurant chains, not directly involved in the contaminated produce, have also reported decreased sales, with Chipotle Mexican Grill attributing a 2 percentage point impact on sales during the second half of July to cyclospora fears.

Salad and Go, an already struggling chain, has filed for bankruptcy protection, citing consumer mistrust of the outbreak as a contributing factor to its financial struggles. Sweetgreen also reported a steeper than expected loss and revenue shortfall in its second-quarter results.