Sweetgreen cuts annual outlook as cyclospora outbreak reduces demand for fresh produce

Sweetgreen Inc. slashed its annual same-store sales forecast on August 6, 2026, projecting a 7% to 8% decline as a record U.S. cyclospora outbreak dampens consumer demand for fresh produce. Although Sweetgreen does not use the recalled Mexican iceberg lettuce linked to the outbreak, fears have impacted its sales momentum, causing a 15% stock drop on August 7, 2026. The company also recalled jalapenos due to a separate Salmonella probe.

Sweetgreen annual outlook cut

• ▪Sweetgreen Inc. shares have declined nearly 30% since mid-July 2026, when concerns about the cyclospora outbreak began impacting restaurant chains relying on fresh produce
• ▪Sweetgreen Inc. cut its full-year same-store sales outlook on August 6, 2026, due to reduced consumer demand for fresh prepared foods during a cyclospora outbreak
• ▪Sweetgreen Inc. revised its full-year same-store sales projection to a decline of 7% to 8%, down from its previous forecast of a 2% to 4% drop
• ▪Sweetgreen Inc. shares fell 15% in premarket trading on Friday, August 7, 2026, following the announcement of its revised annual sales projections

U.S. cyclospora outbreak

• ▪The 2026 cyclospora outbreak has been tied to recalled iceberg lettuce sourced from central Mexico
• ▪Cyclosporiasis is contracted by consuming food, typically raw fruits and vegetables, or water contaminated with feces, causing symptoms such as diarrhea and nausea
• ▪The U.S. cyclospora outbreak in 2026 has reached record levels, representing one of the largest foodborne illness outbreaks in recent national history

Fresh produce demand decline

• ▪Heightened consumer concern regarding the cyclospora outbreak disrupted Sweetgreen Inc.'s sales momentum starting in mid-July 2026, impacting July comparable sales by approximately 600 basis points
• ▪Concerns about food safety from the cyclospora outbreak have led some U.S. consumers to purchase less lettuce and avoid certain restaurant chains

Same-store sales performance

• ▪Sweetgreen Inc.'s 6.2% same-store sales decline in the second quarter of 2026 was an improvement compared to the 7.6% decline recorded in the same period a year earlier
• ▪Sweetgreen Inc.'s same-store sales declined by 6.2% for the second quarter ended June 28, 2026, marking the sixth consecutive quarter of same-store sales declines

Company reassurance efforts

• ▪Sweetgreen Inc. and other salad chains have posted notices emphasizing that they do not use iceberg lettuce to reassure customers during the cyclospora outbreak
• ▪Sweetgreen Inc. reiterated that it does not use iceberg lettuce anywhere on its menu and has received no indication from health authorities or suppliers linking it to the cyclospora outbreak

Jalapeno salmonella recall

• ▪Sweetgreen Inc. maintained a market capitalization of approximately $700 million as of August 2026
• ▪Sweetgreen Inc. recalled some jalapenos during the week of August 3, 2026, due to a federal investigation into a Salmonella outbreak linked to Mexican jalapeno peppers