Sweetgreen sales slump and outlook cut amid cyclospora outbreak

Sweetgreen reported a second‑quarter same‑store sales decline of 6.2%, with traffic down 2% and product mix down 4.2%. The results triggered a 15% pre‑market drop in the stock and a cumulative roughly 30% fall since mid‑July, when consumer concerns over a cyclospora (cyclosporiasis) outbreak began affecting fresh‑produce sales.

The company revised its annual same‑store‑sales forecast to a 7%‑8% decline, worsening the prior 2%‑4% outlook, and cut its adjusted EBITDA guidance to a loss of $23‑$27 million from an earlier profit range of $1‑$6 million. Management emphasized that Sweetgreen does not use iceberg lettuce, the product linked to the outbreak, but the parasite‑related headlines have reduced demand for fresh salads. In addition, Sweetgreen voluntarily recalled jalapeños after a separate salmonella investigation.

Analysts lowered price targets, with UBS cutting its target to $6.50. The chain’s new wrap offerings had initially boosted traffic, but the food‑safety scares dampened momentum. Separately, Just Salad announced it will occupy a former Sweetgreen location in Boston’s Fenway area as Sweetgreen continues to close sites.