Folks stroll previous a Sweetgreen restaurant in Manhattan.
Jeenah Moon | The Washington Put up | Getty Pictures
Sweetgreen shares dropped 23% on Friday after the salad chain lower its 2025 outlook for the second quarter in a row, citing points with its loyalty program, weak client sentiment, tariff headwinds and retailer challenges.
For the full-year 2025, Sweetgreen now expects income of between $700 million and $715 million, down from its Could prediction of $740 million to $760 million and its February outlook of $760 million to $780 million.
It additionally initiatives detrimental same-store gross sales for the complete yr, estimating declines of between 4% and 6%, down from its unique outlook of single-digit development. Restaurant-level revenue margin for 2025 is predicted to be 200 foundation factors decrease than Sweetgreen’s newest outlook in Could. That features a 40 basis-point hit as a result of impact of tariffs.
On a Thursday name with analysts, CEO Jonathan Neman stated Sweetgreen had a “actually, actually tough quarter.”
He stated each exterior headwinds and inner actions performed a job within the efficiency, together with “a extra cautious client atmosphere beginning in April, lapping a troublesome comparability with final yr’s profitable steak launch and the transition of our new loyalty program initially of the quarter.”
The corporate reported a second-quarter earnings and income miss, reporting a lack of 20 cents per share versus a lack of 12 cents anticipated by analysts surveyed by LSEG. Income got here in at $186 million in contrast with the LSEG estimate of $192 million.
Similar-store gross sales dropped 7.6% through the quarter, considerably underperforming the identical quarter a yr earlier when the corporate reported a same-store gross sales improve of 9.3%. Analysts had been anticipating a second-quarter decline of 5.5%, in response to StreetAccount.
Executives stated “loyalty headwinds” performed a key function within the outcomes. Neman stated the transition from the Sweetgreen+ subscription program to a brand new program, SG Rewards, generated a 250 basis-point headwind to the corporate’s second-quarter same-store gross sales. He stated Sweetgreen noticed a falloff in income from that small however high-frequency cohort of Sweetgreen+ clients, however he stated he believes the impact will probably be short-term.
Going ahead, firm leaders stated they’re targeted on bettering buyer satisfaction and operations in shops.
Neman instructed traders on Thursday that solely one-third of eating places are acting at or above requirements, whereas the remaining two-thirds “signify a significant alternative for enchancment.”
He stated the corporate is aiming to enhance operations by the management of its new chief working officer, Jason Cochran, and the launch of a brand new program known as Challenge One Greatest Method, targeted on bettering pace and meals requirements and rising portion sizes.
Client sentiment has performed a job within the firm’s efficiency. Sweetgreen Chief Monetary Officer Mitch Reback stated strain on client spending has continued longer than anticipated.
“It is fairly apparent that the patron isn’t in an amazing place general,” Neman stated.
