Sweetgreen cyclospora outlook cut as fears curb fresh-food demand
Sweetgreen now expects steeper sales declines and an adjusted EBITDA loss, while saying it was not linked to the outbreak.
By Daniel Okafor · Business Editor
2 min read
Sweetgreen cut its 2026 forecast after customers pulled back from fresh prepared foods amid cyclospora concerns. The Sweetgreen cyclospora outlook revision matters because the salad chain now anticipates a sharper sales fall and a move into an adjusted EBITDA loss, despite not being implicated in the outbreak.
According to CNBC, Sweetgreen now expects same-store sales to decline 7% to 8% this year. Its previous forecast called for a 2% to 4% decline.
The company also changed its profitability forecast. It now projects adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, to be a loss of $27 million to $23 million; previously, it expected EBITDA of $1 million to $6 million.
Was Sweetgreen implicated in the cyclospora outbreak?
No. CNBC reported that Sweetgreen has not been connected to the multistate outbreak. The company said its revised guidance reflects lower demand for fresh prepared food since the outbreak began in mid-July, and said it could not predict the speed or timing of a recovery.
CNBC reported that the Food and Drug Administration had identified iceberg lettuce from a Taylor Farms facility in central Mexico as the likely source and that affected products were recalled. The outlet said Taco Bell, owned by Yum Brands, was the only nationwide restaurant chain linked to the outbreak.
Cyclospora is a microscopic parasite that causes cyclosporiasis, an intestinal illness generally associated with watery diarrhea, fatigue and loss of appetite, Forbes reported, citing the Centers for Disease Control and Prevention. The illness can spread when people consume contaminated food, according to the Forbes report.
How much did Sweetgreen's forecast change?
Same-store sales: a projected decline of 7% to 8%, from a prior expected decline of 2% to 4%.
Adjusted EBITDA: a projected loss of $27 million to $23 million, from prior expected positive EBITDA of $1 million to $6 million.
CNBC reported that Sweetgreen's second-quarter loss was larger than Wall Street expected and that its revenue also missed expectations. Shares fell more than 15% in extended trading following the report, according to CNBC.
The demand concern has reached beyond restaurants directly tied to the recalled lettuce. CNBC reported that Chipotle Mexican Grill said cyclospora fears reduced its sales by about 2 percentage points in the second half of July. Salad and Go, which filed for bankruptcy protection, said consumer mistrust associated with the outbreak worsened business problems it already faced, CNBC reported.
This story draws on original reporting from CNBC.