The chain now sees same-store sales falling 7% to 8%, versus its prior 2% to 4% decline forecast, even though it has not been linked to the outbreak.
Sweetgreen lowered its full-year 2026 outlook after the ongoing cyclospora outbreak weakened demand for fresh prepared foods, particularly salad, despite the chain not being implicated in the contamination case. The company said consumer caution since mid-July is now expected to drive a 7% to 8% drop in same-store sales, deeper than its earlier forecast for a 2% to 4% decline, and it now expects an adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $27 million to $23 million instead of prior guidance for $1 million to $6 million in EBITDA. Shares fell more than 15% in extended trading. The outbreak has sickened at least 10,000 people and caused two deaths, according to the Centers for Disease Control and Prevention, while the Food and Drug Administration (U.S. food safety regulator) has identified recalled iceberg lettuce supplied by a Taylor Farms facility in central Mexico as the likely source. Yum Brands' Taco Bell is the only nationwide restaurant chain linked to the outbreak and has already seen sales rebound, but other chains have also reported weaker demand. Chipotle Mexican Grill said cyclospora fears reduced sales by about 2 percentage points in the second half of July, and Salad and Go filed for bankruptcy protection on Tuesday, saying the outbreak worsened its existing business problems. Sweetgreen also reported second-quarter results after the bell on Tuesday, with a wider-than-expected loss and revenue below Wall Street expectations.