Sweetgreen announced a reduction to its full-year financial guidance on Thursday, citing decreased consumer demand for fresh prepared foods stemming from the multistate cyclospora outbreak that began mid-July. The salad chain’s stock declined more than 15% in after-hours trading following the announcement.
The company revised its projections substantially downward. For 2026, Sweetgreen now expects same-store sales to contract between 7% and 8%, compared to its earlier forecast of a 2% to 4% decline. Additionally, the company adjusted its earnings before interest, taxes, depreciation and amortization projections to a loss of $27 million to $23 million, versus a prior expectation of earnings of $1 million to $6 million. The company stated in a statement that the outlook revision reflects uncertainty regarding the pace and timing of consumer recovery.
The cyclospora outbreak has affected at least 10,000 people and resulted in two deaths, according to the Centers for Disease Control and Prevention. The Food and Drug Administration identified iceberg lettuce from a Taylor Farms facility in central Mexico as the likely source, leading to product recalls. Notably, Sweetgreen itself has not been implicated in the outbreak, with Yum Brands’ Taco Bell being the only nationwide restaurant chain directly linked to contaminated products—and that chain is already seeing sales recovery.
Consumer wariness regarding fresh produce, particularly salads, has extended beyond directly implicated establishments. Chipotle Mexican Grill reported that cyclospora-related concerns impacted its sales by approximately 2 percentage points during the second half of July. Salad and Go, already facing financial difficulties, filed for bankruptcy protection on Tuesday, attributing its decision partly to consumer distrust stemming from the outbreak.
Sweetgreen also released its second-quarter results after market close on Thursday, reporting a steeper-than-expected quarterly loss and revenue that fell below Wall Street projections.
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