Why Sweetgreen Stock Tumbled Today

Sweetgreen (SG) tumbled after the salad chain missed second-quarter earnings estimates and slashed full-year guidance, citing a cyclospora outbreak that hammered consumer demand. Same-store sales fell 6.2% in the quarter, while revenue came in at $192.7 million, below analyst expectations. The company swung to an adjusted EBITDA loss after previously showing profitability.

Management had seen traffic trends improving before the outbreak, but the food-safety incident reversed momentum. The company now expects same-store sales to decline 7% to 8% for the full year, a steeper drop than prior forecasts. The cyclospora parasite, linked to lettuce suppliers, triggered customer concerns and weaker foot traffic across Sweetgreen locations.

The guidance cut signals management expects the outbreak's impact to persist through the back half of 2024. Revenue and profitability projections are now under pressure as the company works to rebuild consumer confidence.