Sweetgreen, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue increased 2.1% year-over-year to $176.0 million for the third quarter of fiscal 2026.
• Loss from operations was $(31.8) million, improving from $(36.3) million in the prior year period; loss from operations margin improved to (18.1)% from (21.0)%.
• Net loss was $(30.7) million, narrowing from $(36.1) million in the prior year period; net loss margin improved to (17.5)% from (21.0)%.
• Restaurant-Level Profit was $18.3 million, down from $22.5 million in the prior year period; Restaurant-Level Profit Margin was 10.4%, down from 13.1%.
• Adjusted EBITDA was $(6.8) million, widening from a loss of $(4.4) million in the prior year period; Adjusted EBITDA Margin was (3.8)%, compared to (2.5)%.
• General and administrative expense decreased to $27.6 million (15.7% of revenue) from $30.9 million (17.9% of revenue) in the prior year period.
• Labor and related expenses as a percentage of revenue increased to 30.5% from 29.1% in the prior year period.
• Food, beverage, and packaging costs as a percentage of revenue decreased to 28.8% from 30.7% in the prior year period.
• Cash and cash equivalents increased to $119.8 million as of September 27, 2026, from $89.2 million as of December 28, 2025.
• Total assets were $857.7 million as of September 27, 2026, compared to $788.1 million as of December 28, 2025.
• Total liabilities were $417.0 million as of September 27, 2026, compared to $432.0 million as of December 28, 2025.
• Stockholders' equity increased to $440.8 million as of September 27, 2026, from $356.1 million as of December 28, 2025.

Guidance and Future Outlook:

• Updated fiscal year 2026 guidance includes approximately 10 net new restaurant openings, with about half featuring the Infinite Kitchen.
• Updated fiscal year 2026 Same-Store Sales Change guidance is approximately (5.5)%.
• Updated fiscal year 2026 Restaurant-Level Profit Margin guidance is between 11.0% and 11.5%.
• Updated fiscal year 2026 Adjusted EBITDA guidance is between $(23.0) million and $(20.0) million.
• The company expects approximately half as many net new restaurant openings in fiscal year 2027 compared to fiscal year 2026.
• Management noted positive comparable sales in October, primarily driven by transaction growth.

Business Segments and Product Lines:

• Total Digital Revenue Percentage increased to 66.1% from 61.8% in the prior year period.
• Owned Digital Revenue Percentage increased to 38.0% from 35.3% in the prior year period.
• The company opened 3 net new restaurants in the third quarter of fiscal 2026, compared to 6 in the prior year period.
• Revenue growth was primarily driven by $13.8 million in incremental revenue from 30 net new restaurant openings during or subsequent to the third quarter of fiscal 2025.
• Revenue from the Comparable Restaurant Base decreased by $10.7 million.
• Same-Store Sales Change was (6.4)%, reflecting a 4.9% decrease in traffic and a 2.1% decrease in product mix, partially offset by a 0.6% benefit from menu price increases.
• The decrease in product mix reflected a shift in menu mix towards wraps.
• Menu price increases implemented during the current year period contributed a 0.6% benefit to Same-Store Sales.

Market and Competitive Landscape:

• Reduced consumer demand during the quarter was primarily attributed to the cyclosporiasis outbreak impacting the current year period.
• The company operates 290 locations across the country.
• The SG Rewards loyalty program, introduced in the second quarter of fiscal 2025, includes scan-to-redeem and scan-to-earn features included in Owned Digital Channels sales.
• The company is investing in restaurant teams and expanding its menu with "bold, craveable food."

Risks and Challenges:

• Food safety concerns, specifically the cyclosporiasis outbreak, negatively impacted consumer demand and traffic.
• Higher labor expenses contributed to the decline in Restaurant-Level Profit Margin.
• Sales deleverage resulting from the (6.4)% Same-Store Sales Change impacted profitability.
• Tariffs and duties resulted in higher packaging costs, partially offset by a one-time write-off of discontinued materials and higher packaging costs recognized in the prior year period.
• The company faces risks related to labor shortages, difficulties in hiring and retaining qualified workforce, and increases in labor costs.
• Risks include the ability to effectively identify and secure appropriate sites for new restaurants and the profitability of new restaurants.
• Potential risks include changes in economic conditions, geopolitical events, severe weather, and foodborne illness concerns.

Management Commentary and Tone:

• Jonathan Neman, Co-Founder and Chief Executive Officer, stated that the "Sweet Growth Transformation Plan is beginning to take hold."
• Management expressed confidence in the plan to build on progress by investing in restaurant teams, delivering a consistent customer experience, and expanding the menu.
• The stated focus is to bring more customers into sweetgreen and provide reasons for them to return.
• Management highlighted positive comparable sales in October as a leading indicator of the plan's effectiveness.

Other Key Points:

• The company recognized a gain on disposal of business of $80,000 in the third quarter of fiscal 2026.
• During the thirty-nine weeks ended September 27, 2026, the company recognized a gain on disposal of business of $160.5 million related to the sale of the Spyce business.
• As partial consideration for the Spyce sale, the company received Series C Preferred Stock of Wonder Group, Inc. valued at $86.4 million.
• Stock-based compensation expense decreased by $2.5 million in the third quarter of fiscal 2026 compared to the prior year period, primarily related to restricted stock units.
• The company excluded 11 restaurants from the Comparable Restaurant Base calculation for the third quarter of fiscal 2026, including two temporary closures and nine permanent closures.
• The company excluded 19 restaurants from the Comparable Restaurant Base calculation for the thirty-nine weeks ended September 27, 2026, including 10 temporary closures and nine permanent closures.
• The company hosts a conference call to discuss financial results on November 5, 2026, at 1:30 p.m. Pacific Time.