Sweetgreen, Inc. — Second Quarter 2026 Earnings Summary

Financial Performance

• Total revenue increased 3.8% year-over-year to $192.7 million for the second quarter of fiscal 2026.
• Same-Store Sales Change was (6.2%), an improvement from (7.6%) in the prior year period.
• Loss from operations was $(27.4) million with a margin of (14.2%), compared to $(26.4) million and (14.2%) in the prior year period.
• Restaurant-Level Profit was $25.2 million with a margin of 13.1%, down from $35.1 million and 18.9% respectively in the prior year period.
• Net loss was $(26.3) million with a margin of (13.6%), compared to a net loss of $(23.2) million and a margin of (12.5%) in the prior year period.
• Adjusted EBITDA was $(0.2) million with a margin of (0.1%), compared to $6.4 million and a margin of 3.5% in the prior year period.
• General and administrative expense decreased to $29.7 million (15.4% of revenue) from $34.5 million (18.6% of revenue) in the prior year period.
• Food, beverage, and packaging costs were 29.8% of revenue in Q2 2026, up from 27.7% in the prior year period.
• Labor and related expenses were 29.2% of revenue in Q2 2026, up from 27.5% in the prior year period.
• Cash and cash equivalents increased to $142.6 million as of June 28, 2026, from $89.2 million as of December 28, 2025.

Guidance and Future Outlook

• Fiscal 2026 outlook reflects reduced consumer demand due to a multistate cyclosporiasis outbreak starting mid-July.
• Net new restaurant openings for fiscal 2026 are anticipated to be approximately 13, with about half featuring the Infinite Kitchen.
• Same-Store Sales Change for fiscal 2026 is now expected to be between (8.0)% and (7.0)%.
• Restaurant-Level Profit Margin for fiscal 2026 is projected to be between 10.5% and 11.0%.
• Adjusted EBITDA for fiscal 2026 is projected to be between $(27.0) million and $(23.0) million.
• The pace and timing of recovery from the cyclosporiasis outbreak remain uncertain.

Business Segments and Product Lines

• Total Digital Revenue Percentage increased to 66.3% from 60.8% in the prior year period.
• Owned Digital Revenue Percentage increased to 38.8% from 33.4% in the prior year period.
• Revenue growth was driven by $18.4 million in incremental revenue from 36 net new restaurant openings during or subsequent to Q2 2025.
• Comparable Restaurant Base revenue decreased by $11.2 million, driven by a 2.0% decrease in traffic and a 4.2% decrease in product mix.
• Product mix shifts included increased promotional activity, a shift toward wraps, and the removal of ripple fries.
• Two net new restaurant openings occurred in Q2 2026, compared to nine in the prior year period.
• Investments were made in chicken and tofu portions, contributing to higher ingredient usage.

Market and Competitive Landscape

• The company faces a multistate outbreak of cyclosporiasis impacting consumer demand for fresh prepared foods.
• Management noted that guests are responding to wraps and restaurant execution is improving.
• The company remains focused on delivering a consistent guest experience and rebuilding restaurant-level profitability.

Risks and Challenges

• Food safety and foodborne illness concerns, specifically the cyclosporiasis outbreak, pose significant risks to consumer demand and sales trends.
• Negative Same-Store Sales trends driven by traffic declines and product mix shifts present ongoing challenges.
• Higher overall ingredient usage and increased promotional activity have negatively impacted Restaurant-Level Profit margins.
• Uncertainty regarding the recovery pace and timing from the cyclosporiasis outbreak affects future performance.

Management Commentary and Tone

• Jonathan Neman, Co-Founder and CEO, stated results are "not where they need to be" but progress in the second quarter reinforces confidence that the plan is working.
• Management emphasized a continued focus on improving restaurant execution, increasing guest transactions, and rebuilding restaurant-level profitability.
• The tone acknowledges current challenges while expressing confidence in the long-term growth opportunity and the effectiveness of the transformation plan.

Other Key Points

• The company recognized a gain on disposal of business of $160.6 million for the twenty-six weeks ended June 28, 2026, related to the sale of the Spyce business.
• Proceeds from the disposal of the Spyce business were $100.0 million.
• Series C Preferred Stock of Wonder Group, Inc. with a value of $86.4 million was received as partial consideration for the Spyce sale.
• Stock-based compensation expense decreased by $2.8 million year-over-year, primarily due to a reduction in expenses associated with restricted stock units and performance-based restricted stock units issued prior to the IPO.
• The SG Rewards loyalty program, introduced in Q2 2025, continues to drive Owned Digital Revenue through scan-to-redeem and scan-to-earn transactions.
• The company reported a net cash used in operating activities of $(17.6) million for the twenty-six weeks ended June 28, 2026.
• Net cash provided by investing activities was $73.7 million for the twenty-six weeks ended June 28, 2026, largely driven by the Spyce sale proceeds.