Shares of salad chain Sweetgreen (NYSE: SG) slumped about 15% in premarket trading on Friday, August 7, 2026, a day after the company slashed its full-year same-store sales outlook. The cut reflects weaker consumer demand for fresh prepared foods amid a large multistate cyclosporiasis outbreak linked to iceberg lettuce, even though Sweetgreen does not use the implicated product on its menu.
Sweetgreen Cuts Full-Year Same-Store Sales Outlook to –7% to –8% Amid Outbreak Impact
Sweetgreen now expects full-year 2026 same-store sales to decline 7% to 8%, worse than its prior forecast of a 2% to 4% drop. Adjusted EBITDA guidance was also lowered sharply to a loss of $23 million to $27 million, from a previous range of $1 million to $6 million profit. The company said the update reflects reduced demand for fresh prepared foods since mid-July due to the outbreak.
In the second quarter ended June 28, revenue rose 3.8% to $192.7 million but missed estimates near $194–$195 million. Same-store sales fell 6.2% — the sixth consecutive quarterly decline, though improved from a 7.6% drop a year earlier. GAAP net loss widened to $26.3 million, or $0.22 per share, versus consensus expectations of a smaller loss around $0.12–$0.15. Restaurant-level profit margin was 13.1%, down from 18.9% a year ago. Adjusted EBITDA was roughly breakeven (a small loss of about $0.2 million). The company ended the quarter with 287 restaurants.
CFO Jamie McConnell said on the earnings call that traffic had been improving into June after the national launch of wraps, but “beginning in mid-July, heightened consumer concern related to the recent cyclospora headlines disrupted that momentum, and the impact to July comparable sales was about 600 basis points.” Sweetgreen also disclosed a voluntary recall of some jalapeños earlier in the week tied to a separate Salmonella investigation involving Mexican peppers; the peppers are used only in two dressings.
The company has repeatedly stated that iceberg lettuce is not used anywhere on its menu and that it has no indication from health authorities or suppliers that it is linked to the cyclosporiasis outbreak. It has posted notices in restaurants emphasizing this point.
Sweetgreen Shares Fall Nearly 30% Since Mid-July on Outbreak Fears
Investors sold the stock aggressively because the guidance cut confirmed that broad consumer fears about fresh produce are hitting even chains not implicated in the outbreak. Sweetgreen shares have already fallen nearly 30% since mid-July as the outbreak headlines intensified. The combination of a sixth straight quarter of negative same-store sales, a widened loss, and a much weaker full-year outlook raised concerns about how long the demand recovery will take. Market capitalization stood near $700 million before the latest drop.
Cyclosporiasis Outbreak Linked to Iceberg Lettuce Hits 6,300+ Cases Across 15 States
Cyclosporiasis is an intestinal illness caused by the parasite Cyclospora cayetanensis, typically spread through contaminated fresh produce or water. Symptoms include prolonged diarrhea, nausea, and other gastrointestinal issues. The current multistate outbreak, one of the largest foodborne illness events in recent U.S. history, has been linked primarily to recalled iceberg lettuce from Taylor Farms de Mexico. As of early August 2026, CDC data showed more than 6,300 confirmed cases across 15 states, at least 278 hospitalizations, and two deaths. The true number of illnesses is believed to be higher.
Sweetgreen, founded in 2007, specializes in salads, bowls, and now wraps, relying heavily on fresh ingredients. The chain has faced multi-quarter traffic and same-store sales pressure even before the outbreak, making the additional demand hit particularly damaging. Other produce-heavy or lettuce-using concepts have also seen traffic softness.
What’s Next: Sweetgreen Eyes Recovery Timing and Continued Restaurant Growth
Management said the timing of a full recovery is difficult to predict but expressed confidence in rebuilding momentum. Full-year guidance assumes continued pressure of roughly 600–700 basis points on third-quarter comparable sales, with varying recovery scenarios into the fourth quarter. Investors will watch sequential traffic trends, any further public-health updates on the outbreak, and whether consumer confidence in fresh prepared foods returns. Sweetgreen continues to open new locations (about 13 net new expected in 2026, roughly half with Infinite Kitchen technology) while managing the near-term sales headwind.