Sweetgreen<\/a> shares dropped more than 25% on Friday after the salad chain cut its 2025 outlook for the second quarter in a row, citing issues with its loyalty program, weak consumer sentiment, tariff headwinds and store challenges.<\/p>\nFor the full-year 2025, Sweetgreen now expects revenue of between $700 million and $715 million, down from its May prediction of $740 million to $760 million and its February outlook of $760 million to $780 million.<\/p>\n
It also projects negative same-store sales for the full year, estimating declines of between 4% and 6%, down from its original outlook of single-digit growth. Restaurant-level profit margin for 2025 is expected to be 200 basis points lower than Sweetgreen’s latest outlook in May. That includes a 40 basis-point hit due to the effect of tariffs.<\/p>\n
On a Thursday call with analysts, CEO Jonathan Neman said Sweetgreen had a “really, really rough quarter.”<\/p>\n
He said both external headwinds and internal actions played a role in the performance, including “a more cautious consumer environment starting in April, lapping a tough comparison with last year’s successful steak launch and the transition of our new loyalty program at the beginning of the quarter.”<\/p>\n
The company reported a second-quarter earnings and revenue miss, reporting a loss of 20 cents per share versus a loss of 12 cents expected by analysts surveyed by LSEG. Revenue came in at $186 million compared with the LSEG estimate of $192 million.<\/p>\n
Same-store sales dropped 7.6% during the quarter, significantly underperforming the same quarter a year earlier when the company reported a same-store sales increase of 9.3%. Analysts were expecting a second-quarter decline of 5.5%, according to StreetAccount.<\/p>\n
Executives said “loyalty headwinds” played a key role in the results. Neman said the transition from the Sweetgreen+ subscription program to a new program, SG Rewards, generated a 250 basis-point headwind to the company’s second-quarter same-store sales. He said Sweetgreen saw a falloff in revenue from that small but high-frequency cohort of Sweetgreen+ customers, but he said he believes the effect will be temporary.<\/p>\n
Going forward, company leaders said they are focused on improving customer satisfaction and operations in stores.<\/p>\n
Neman told investors on Thursday that only one-third of restaurants are performing at or above standards, while the remaining two-thirds “represent a meaningful opportunity for improvement.”<\/p>\n
He said the company is aiming to improve operations through the leadership of its new chief operating officer, Jason Cochran, and the launch of a new program called Project One Best Way, focused on improving speed and food standards and increasing portion sizes.<\/p>\n
Consumer sentiment has played a role in the company’s performance. Sweetgreen Chief Financial Officer Mitch Reback said pressure on consumer spending has persisted longer than expected.<\/p>\n
“It’s pretty obvious that the consumer is not in a great place overall,” Neman said.<\/p>\n
Don\u2019t miss these insights from CNBC PRO<\/p>\n","protected":false},"excerpt":{"rendered":"People walk past a Sweetgreen restaurant in Manhattan. Jeenah Moon | The Washington Post | Getty Images Sweetgreen…\n","protected":false},"author":2,"featured_media":68048,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[28,122,8084,49548,4322,49549],"class_list":{"0":"post-68047","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-business-news","10":"tag-earnings","11":"tag-jonathan-neman","12":"tag-restaurants","13":"tag-sweetgreen-inc"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/68047","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=68047"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/68047\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/68048"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=68047"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=68047"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=68047"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}