Sweetgreen slashed its full-year 2026 outlook this week, citing a drop in demand for fresh prepared food amid a multistate cyclosporiasis outbreak that has been linked to contaminated lettuce, even though the company says it has not been implicated in the underlying outbreak.
The salad chain now expects same-store sales to fall 7% to 8% for the year, a sharp downgrade from its prior forecast of a 2% to 4% decline. Sweetgreen also cut its adjusted earnings outlook, now projecting an EBITDA loss of $23 million to $27 million, reversed from earlier guidance of $1 million to $6 million in positive earnings. Shares fell more than 15% in premarket trading Friday, extending a roughly 30% slide since mid-July.
The guidance cut lands amid a separate, unrelated cyclosporiasis outbreak tied to iceberg lettuce from a different supplier that has sickened thousands of people across 15 states, according to the Centers for Disease Control and Prevention. Sweetgreen has said it has not been implicated in that outbreak, but executives pointed to broader consumer wariness around fresh salad and produce as a factor weighing on traffic across the category.
The steep guidance revision underscores how quickly a food-safety scare tied to one supplier can ripple across an entire category of restaurants, even for chains not directly named in an outbreak investigation. Sweetgreen's stock decline reflects investor concern that the demand pullback could persist beyond the immediate news cycle, particularly if the underlying outbreak investigation continues to expand and keeps consumer attention focused on fresh-produce safety more broadly.
The company's shares had already been under pressure heading into the update, and Friday's decline pushed the stock to some of its lowest levels since Sweetgreen went public, a sign of how sensitive fast-casual chains remain to shifts in consumer sentiment around food safety even when no direct link to their own supply chain has been established.