Sweetgreen's second quarter was marked by underperformance against Wall Street’s expectations, with both revenue and non-GAAP earnings coming in below consensus. The market reacted negatively, reflecting investor concern over the effectiveness of recent strategic initiatives and ongoing headwinds in traffic and same-store sales. Management acknowledged these challenges, with CEO Jonathan Neman stating, “Our results are not where they need to be,” citing operational hurdles and the impact of industry-wide food safety headlines on guest behavior. Sequential improvements were noted, but the company remains in a turnaround phase.
Is now the time to buy SG? Find out in our full research report (it’s free for active Edge members).
Sweetgreen (SG) Q2 CY2026 Highlights:
- Revenue: $192.7 million vs analyst estimates of $193.9 million (3.8% year-on-year growth, 0.6% miss)
- Adjusted EPS: -$0.15 vs analyst expectations of -$0.12 (24.7% miss)
- Adjusted EBITDA: -$175,000 vs analyst estimates of $5.67 million (-0.1% margin, significant miss)
- EBITDA guidance for the full year is -$25 million at the midpoint, below analyst estimates of $2.33 million
- Operating Margin: -14.2%, in line with the same quarter last year
- Locations: 287 at quarter end, up from 260 in the same quarter last year
- Same-Store Sales fell 6.2% year on year (-7.6% in the same quarter last year)
- Market Capitalization: $692.8 million
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Sweetgreen’s Q2 Earnings Call
- Aisling Grueninger (Bank of America): Asked whether the lower price point of wraps was driving the intended traffic and repeat behavior, or if it was creating a check headwind. CEO Jonathan Neman said wraps are boosting frequency and attracting Gen Z consumers, and that the next step is to leverage wraps for new customer acquisition.
- Margaret-May Binshtok (Wolfe Research): Asked how the Create Your Own pricing test and wraps together could improve value perception. Neman replied the new pricing test is being rolled out gradually, with early customer feedback positive, and a full rollout possible by year-end.
- Sharon Zackfia (William Blair): Questioned what underlying full-price transaction growth looked like, separate from promotional activity. CFO Jamie McConnell said promotions have been reduced and are now targeted at lapsed guests, with positive transaction momentum seen before the cyclospora event.
- Brian Mullan (Piper Sandler): Asked about plans for store growth with the new Chief Development Officer. Neman said new openings will be conservative, prioritizing high-return sites, while refining prototype and market selection for future acceleration.
- Rahul Krotthapalli (JPMorgan): Asked about strategies to attract new customers and broaden brand appeal. Neman detailed upcoming menu diversification, a shift in marketing mix toward broader awareness, and a refreshed brand and marketing team to drive top-of-funnel engagement.
Catalysts in Upcoming Quarters
Looking forward, the StockStory team will be monitoring (1) signs of transaction and same-store sales stabilization as operational improvements scale, (2) the effectiveness of new menu launches and value-focused pricing in driving guest acquisition, and (3) the company’s ability to manage labor and ingredient costs in light of ongoing margin pressure. Progress on digital engagement and loyalty program performance will also be key indicators for Sweetgreen’s turnaround.
Sweetgreen currently trades at $5.81, down from $5.87 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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