Sweetgreen announced a reduction in its full-year sales forecast, projecting same-store sales declines of 7% to 8% for 2026, a significant increase from its previous estimate of 2% to 4%.
This adjustment is attributed to consumer fears surrounding fresh produce due to an ongoing cyclospora outbreak, which has affected at least 10,000 individuals and resulted in two fatalities, according to the CDC. Although Sweetgreen itself has not been implicated in the outbreak, the company noted that the outbreak has diminished consumer demand for fresh prepared foods.
The FDA has identified iceberg lettuce from a Taylor Farms facility in Mexico as the likely source of contamination, leading to product recalls. Other restaurant chains, including Chipotle Mexican Grill, have also reported sales impacts due to similar consumer concerns.
Sweetgreen's second-quarter results revealed a larger-than-expected loss and revenue that fell short of analyst expectations, further complicating its financial outlook. The uncertainty surrounding the recovery from this outbreak adds to the challenges facing Sweetgreen and the broader restaurant industry