Financial Performance Overview

Sweetgreen, a mission-driven restaurant and lifestyle brand, reported mixed financial results for the thirteen and twenty-six weeks ended June 28, 2026. While revenue increased compared to the prior year periods, the company continued to face challenges with profitability and same-store sales.

For the thirteen weeks ended June 28, 2026, revenue increased 3.8% to $192.7 million, driven by 36 net new restaurant openings since the prior year period. However, same-store sales declined 6.2%, reflecting a 2.0% decrease in traffic and a 4.2% decrease in product mix. The company reported a net loss of $26.3 million for the quarter, compared to a net loss of $23.2 million in the prior year period.

Over the twenty-six week period, revenue increased 0.7% to $354.2 million, with 41 net new restaurant openings offsetting a 9.3% decline in same-store sales. The company reported net income of $99.5 million, primarily due to a $160.6 million gain on the disposal of the Spyce business and related kitchen automation technology. Excluding this one-time gain, the company would have reported a net loss for the period.

Revenue and Profit Trends

Sweetgreen’s revenue growth has been driven primarily by new restaurant openings, with 2 and 6 net new restaurants opened during the thirteen and twenty-six week periods, respectively. However, the company continues to face challenges with same-store sales, which declined 6.2% and 9.3% in the respective periods. This was attributed to a decrease in both traffic and product mix, as customers shifted towards lower-priced menu items and the company increased promotional activity.

The company’s profitability has also been impacted by rising costs across several key expense categories. Food, beverage, and packaging costs increased as a percentage of revenue, driven by higher ingredient usage, investments in certain proteins, and increased promotional activity. Labor and occupancy costs also increased as a percentage of revenue due to deleverage from lower sales volumes and inflationary pressures.

General and administrative expenses decreased in both the thirteen and twenty-six week periods, primarily due to lower stock-based compensation and management salary costs. However, other operating expenses, such as depreciation, pre-opening, and impairment costs, remained elevated.

The company’s net loss for the thirteen week period widened to $26.3 million, compared to $23.2 million in the prior year. Excluding the one-time gain on the Spyce disposal, the company would have reported a net loss of $99.5 million for the twenty-six week period, compared to a net loss of $48.2 million in the prior year.

Strengths and Weaknesses

One of Sweetgreen’s key strengths is its ability to open new restaurants and expand its footprint. The company opened 2 and 6 net new restaurants during the thirteen and twenty-six week periods, respectively, bringing its total to 287 locations across 24 states and Washington, D.C. This growth helps drive revenue, but the company must balance new openings with maintaining strong performance at its existing restaurants.

Another strength is the company’s focus on digital and technology-enabled operations. Sweetgreen has continued to see growth in its digital sales channels, with total digital revenue accounting for 66.3% and 66.7% of total revenue in the respective periods. The company’s Owned Digital Channels, which include mobile app and website orders, made up 38.8% and 38.9% of total revenue. This shift towards digital sales has helped offset some of the challenges in the company’s in-store traffic.

However, Sweetgreen’s weaknesses include its ongoing struggles with profitability and same-store sales. The company’s net losses, while partially driven by one-time items, reflect the broader challenges it faces in managing costs and driving consistent traffic and sales growth at its existing restaurants. The company’s reliance on new unit growth to drive revenue raises questions about the sustainability of its business model.

Additionally, Sweetgreen faces external headwinds, such as the impact of the cyclosporiasis outbreak and supply chain disruptions, that have negatively affected customer demand and operations. The company’s exposure to macroeconomic factors, including inflation and changes in consumer spending patterns, also pose risks to its financial performance.

Outlook and Future Prospects

Looking ahead, Sweetgreen expects to open approximately 13 net new restaurants in fiscal year 2026, with about half featuring the company’s Infinite Kitchen technology. The Infinite Kitchen, a kitchen automation system, has been incorporated into 35 of the company’s 287 restaurants as of June 28, 2026.

The company remains focused on mitigating the impact of rising costs, including through gradual menu price increases, customer service and delivery fees, and operational efficiencies. However, there is no guarantee that these strategies will be sufficient to offset the ongoing inflationary pressures and changes in consumer behavior.

Sweetgreen also continues to monitor the impact of external events, such as the cyclosporiasis outbreak and military conflicts, on its supply chain, construction costs, and the broader macroeconomic environment. The company is working with suppliers to reduce the impacts on buildout costs and is maintaining rigorous food safety protocols across its operations.

Overall, Sweetgreen’s financial performance in the first half of fiscal year 2026 highlights the challenges the company faces in balancing growth, profitability, and operational resilience. While the company’s digital capabilities and new unit expansion provide some avenues for growth, it will need to address its ongoing same-store sales and cost management issues to achieve sustainable profitability in the long term.