Sweetgreen announced a significant reduction to its full-year financial outlook on Thursday, citing diminished consumer demand for fresh prepared foods stemming from an ongoing multistate cyclospora outbreak. The salad chain’s stock fell more than 15% in after-hours trading following the announcement.
The company now projects same-store sales declines of 7% to 8% for 2026, a marked deterioration from its prior guidance of 2% to 4% decline. Additionally, Sweetgreen revised its adjusted earnings before interest, taxes, depreciation and amortization expectations to a loss of $23 million to $27 million, a sharp reversal from its previous forecast of $1 million to $6 million in earnings.
Sweetgreen has not been identified as a source of contamination in the outbreak, which has affected at least 10,000 people and resulted in two deaths according to the Centers for Disease Control and Prevention. Federal health authorities have attributed the outbreak to iceberg lettuce supplied by a Taylor Farms facility in central Mexico, and contaminated products have been recalled. Taco Bell, owned by Yum Brands, remains the only major national restaurant chain directly linked to the outbreak, and that chain is already experiencing a rebound in sales.
The outbreak has nonetheless created broader market concerns about fresh produce safety among consumers. Other restaurant chains not directly implicated in the contamination have also reported sales impacts. Chipotle Mexican Grill indicated that cyclospora-related concerns affected sales by approximately 2 percentage points during the second half of July. Salad and Go, a struggling chain, cited consumer mistrust from the outbreak as a contributing factor when filing for bankruptcy protection earlier in the week.
Sweetgreen also reported its second-quarter financial results, which included a larger-than-anticipated quarterly loss and revenue that fell short of Wall Street expectations.
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