Individuals stroll previous a Sweetgreen restaurant in Manhattan.
Jeenah Moon | The Washington Submit | Getty Photos
Sweetgreen shares dropped greater than 25% on Friday after the salad chain lower its 2025 outlook for the second quarter in a row, citing points with its loyalty program, weak shopper 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 unfavourable same-store gross sales for the complete 12 months, estimating declines of between 4% and 6%, down from its unique outlook of single-digit progress. Restaurant-level revenue margin for 2025 is anticipated to be 200 foundation factors decrease than Sweetgreen’s ad outlook in Could. That features a 40 basis-point hit as a result of influence of tariffs.
On a Thursday name with analysts, CEO Jonathan Neman mentioned Sweetgreen had a “actually, actually tough quarter.”
He mentioned each exterior headwinds and inside actions performed a job within the efficiency, together with “a extra cautious shopper atmosphere beginning in April, lapping a troublesome comparability with final 12 months’s profitable steak launch and the transition of our new loyalty program at first of the quarter.”
The corporate reported a second-quarter earnings and income miss, reporting a lack of 20 cents per share versus a 12-cent loss anticipated by analysts surveyed by LSEG. Income got here in at $186 million in contrast with the LSEG estimate of $192 million.
Identical-store gross sales dropped 7.6% throughout the quarter, considerably underperforming the identical quarter a 12 months earlier when the corporate reported a same-store gross sales improve of 9.3%. Analysts have been anticipating a second-quarter decline of 5.5%, in keeping with StreetAccount.
Executives mentioned “loyalty headwinds” performed a key position within the outcomes. Neman mentioned 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 mentioned Sweetgreen noticed a falloff in income from that small however high-frequency cohort of Sweetgreen+ prospects, however he mentioned he believes the influence shall be momentary.
Going ahead, firm leaders mentioned they’re centered 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 mentioned the corporate is aiming to enhance operations by means of the management of its new COO, Jason Cochran, and the launch of a brand new program known as Venture One Greatest Method, centered on bettering velocity and meals requirements and rising portion sizes.
Shopper sentiment has performed a job within the firm’s efficiency. Reback mentioned stress on shopper spending has endured longer than anticipated.
“It is fairly apparent that the buyer will not be in an awesome place total,” Neman added.