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LOS ANGELES - Sweetgreen , Inc. (NYSE:SG) shares plunged 21% after the health-focused restaurant chain reported stagnant revenue growth and slashed its full-year outlook amid declining customer traffic.
The company posted second-quarter revenue of $185.6 million, a mere 0.5% increase from the year-ago period and well below analyst expectations of $193.43 million. Adjusted earnings per share came in at -$0.20, missing the -$0.09 estimate by a wide margin.
Same-store sales fell 7.6% in the quarter, a stark reversal from the 9.3% growth reported in the same period last year. The decline was driven by a 10.1% decrease in traffic and product mix, only partially offset by a 2.5% benefit from menu price increases.
"Sweetgreen’s second quarter results reflected a convergence of several headwinds, including macroeconomic pressures, a challenging comparison to last year’s strong Q2, and the transition of our loyalty program," said Jonathan Neman, Co-Founder and Chief Executive Officer. "While we’re not satisfied with today’s results, we’re confident in our ability to improve in the back half of 2025."
The company significantly lowered its full-year revenue guidance to between $700 million and $715 million, far below the $739.8 million analysts had expected. Management now projects same-store sales to decline between 4% and 6% for the year.
Despite the disappointing results, Sweetgreen maintained its expansion plans, targeting at least 40 net new restaurant openings in 2025, with 20 featuring the company’s automated "Infinite Kitchen" technology.
Restaurant-level profit margin fell to 18.9% from 22.5% in the prior-year period, while adjusted EBITDA dropped to $6.4 million from $12.4 million a year earlier.
"While headwinds weighed on results, our financial model is strong," said Mitch Reback, Chief Financial Officer. "Our priorities are clear: deliver great guest experiences with the best sourced and prepared food, and improve execution and consistency across the fleet."
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