Sweetgreen’s terrible summer: Stock price and profits take a hit as salad aversion grips the nation

In the wake of a national cyclosporiasis outbreak, salad chain Sweetgreen is bracing for a sharp decline in sales and profits. The company's second quarter earnings report, released on Thursday, revealed a revised outlook for 2026 that anticipates a significant drop in consumer demand for fresh prepared foods due to the ongoing outbreak.

Sweetgreen now anticipates a 7%-8% decline in same-store sales for the year, which is substantially worse than its previous estimate of 2%-4% decline. The company has also revised its restaurant-level profit margin from 14.2%-14.7% to a narrower range of 10.5%-11%. Adjusted EBITDA, previously projected at $1 million to $6 million, has now plunged to an expected loss of $23 million to $27 million.

Sweetgreen stated that the pace and timing of recovery remain uncertain. The company eliminated jalapenos from two of its dressings following a recall by the Centers for Disease Control and Prevention (CDC) due to salmonella infections. Despite a relatively stable figure of opening around 13 net new restaurants, this represents a significant drop from the 35 and 25 net openings in 2025 and 2024 respectively.

Sweetgreen currently operates 287 restaurants, including 35 automated locations called Infinite Kitchen. At a post-earnings call, Sweetgreen co-founder and CEO Jonathan Neman acknowledged the slowdown in new location openings, stating that the company will maintain a conservative pace, similar to or slightly slower than this year.

Neman also emphasized the focus on perfecting the prototype, cost, and overall experience of Sweetgreen's stores. He hinted that store openings will accelerate once the overall business situation improves, describing it as a "slow down to speed up" phase.