SG 10-K & 10-Q changes, risk factors and insider trading
Sweetgreen, Inc. · NYSE · Retail-Eating Places · CIK 1477815 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Severe weather conditions and natural disasters have adversely affected our restaurant sales and results of operations, and climate change may further increase these adverse effects.”
New heading “We have incurred significant net losses since inception. We expect our net losses to continue in the foreseeable future, and we may not achieve profitability.”
New heading “Our increasing use of artificial intelligence (AI), including but not limited to generative AI, may result in errors, loss of sensitive information, additional compliance obligations, cybersecurity incidents, and legal liability, which could harm our reputation, business, financial condition, and results of operations.”
Removed heading “Severe weather conditions or natural disasters may adversely affect our restaurant sales and results of operations, and climate change may further increase these adverse effects.”
Removed heading “We have incurred significant losses since inception. We expect our operating expenses to increase significantly in the foreseeable future, as we grow our business, increase our new restaurant openings, and invest into new technology, and we may not achieve profitability.”
Removed heading “We use an independent contractor driver network with respect to our food delivery program. The status of the drivers as independent contractors, rather than employees, may be challenged. A reclassification of the drivers as employees could harm our business or results of operations.”
Removed heading “Our founders have pledged a portion of their shares of our stock to secure certain personal loan obligations. If those pledged shares are sold in forced sales under the loan documents, such sales could cause the price of our Class A common stock to decline.”
Largest changes
We (and the third parties with whom we work) are subject to rapidly changing and increasingly stringent U.S. and foreign laws,see in full comparisonregulations, rules,contractualobligations,terms, industry standards,policies,and other obligations relating to data privacy andsecurity.security,Ourand any actual or perceived failure to comply with such obligations couldleadadverselytoaffectregulatoryourinvestigationsbusiness,orfinancialactions; litigation; finescondition, andpenalties; disruptionsresults ofour business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse business consequences.operations.
“Any increase in the prices, or lack of availability, of the food products most critical to our menu, whether due to natural forces like weather or climate change, other companies offering more competitive terms to our suppliers, inflation, animal diseases, increased labor costs for our suppliers, or other reasons could have an adverse effect on our business, financial condition, and results of operations. For example, in fiscal year 2024, avian influenza outbreaks disrupted our supply of chicken and eggs in certain of our geographic regions, resulting in shortages and higher prices. …”see in full comparison
If the confidentiality, integrity, or availability of our information technology, software, services, communications, or data, or those of third parties with whom we work, are or were compromised, we could experience adversesee in full comparisonconsequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverseconsequences.
“Our business depends on customer discretionary spending, which is influenced by conditions largely beyond our control. Inflation, high interest rates, recessionary economic cycles, tariffs, reduced consumer confidence, unemployment, higher energy costs, reduced access to credit, or other macroeconomic or geopolitical factors may adversely affect customers’ willingness or ability to spend on meals away from home. During periods of economic stress, consumers may shift toward lower-cost alternatives, reduce the frequency of dining out, or permanently change their discretionary spending habits. …”see in full comparison
“Our increasing use of artificial intelligence (AI), including but not limited to generative AI, may result in errors, loss of sensitive information, additional compliance obligations, cybersecurity incidents, and legal liability, which could harm our reputation, business, financial condition, and results of operations.”see in full comparison
“Prices and availability of key ingredients may fluctuate due to weather, climate change, animal disease, labor costs at suppliers, inflation, other purchasers offering more competitive terms to our suppliers, government regulations, trade restrictions, or other reasons. For example, avian influenza outbreaks in fiscal year 2024 disrupted supplies of chicken and eggs in certain regions, resulting in shortages and higher prices. …”see in full comparison
Full comparison: every changed paragraph (298)
You should carefully consider the risks described below in addition to the other information set forth in this Annual Report on Form 10-K, including the Management’s Discussion and Analysis of Financial Conditions and Results of Operations section and the consolidated financial statements and related notes. If any of the risks and uncertainties described below actually occur or continue to occur, our business, financial condition, and results of operations, and the trading price of our Class A common stock, could be materially and adversely affected. The risks and uncertainties described below are those that we have identified as material but are not the only risks and uncertainties we face. Our business is also subject to general risks and uncertainties that affect many other companies, including, but not limited to, overall economic and industry conditions, and additional risks not currently known to us or that we presently deem immaterial may arise or become material and may negatively impact our business, reputation, financial condition, results of operations, or the trading price of our Class A common stock.
We face significant competition from restaurants in the fast-casual dining and traditional fast-food segments of the restaurant industry. These segments arecompete highlyon competitivefactors withsuch respect to, among other things,as taste, price, food quality and presentation, service, location, and therestaurant ambience and condition of each restaurant.condition. Our competitioncompetitors includes a variety ofinclude locally owned restaurants and nationalregional and regionalnational chains offeringthat offer dine-in, carry-out, delivery, and catering services. Many of our competitors have existedoperated longer and have a more established market presence with substantially greater financial, marketing, personnel, and other resources than we do, and as a result, these competitorstherefore may be better positioned to succeed in the highly competitive restaurant industry. Among our competitors are anational numberand of multi-unit, multi-market, fast-food, orregional fast-casual restaurant concepts,chains, somerestaurants ofemphasizing whichclean, arereal expanding nationally, including companies like Chipotle, CAVA, McDonald's, Panera Bread,ingredients and Shakehealth-conscious Shack, as well as other quick service saladdining, and healthtraditional foodquick-service concepts.restaurants.
As we continue to expand into new markets and further develop our digital channels, we also face growing competition from both new entrants and existing restaurants that have increased their digital presence through delivery and take-out platforms. We compete with delivery kitchens, food aggregators, and third-party delivery marketplaces such as DoorDash, Grubhub, and Uber Eats, as well as grocery stores that focus on freshly prepared or organic foods. The delivery marketplaces, including those we partner with, retain customer data for Sweetgreen orders and may use that information to promote other restaurants. The expansion of such delivery and take-out channels, especially among restaurants that previously relied on dine-in traffic, has further intensified overall competition in recent years.
Many competitors may have, among other things, greater financial and operational resources, lower costs, better geographic locations, better facilities, stronger management, more advanced technology, or more effective marketing. Some may imitate or improve upon our business model, menu, technology, or restaurant design, which are difficult to protect or not protectable under intellectual property or related laws, reducing our competitive advantages. Competitors may respond more quickly to shifts in consumer tastes, nutritional and dietary trends, and ordering preferences and may attract guests through lower prices, better loyalty or promotional programs, or broader menu offerings such as breakfast. Our sales could also decline due to changes in popular tastes or heightened attention to new restaurant concepts.
Any inability by us to compete effectively could reduce customer traffic, pressure our pricing, slow our growth, and prevent us from reaching profitability. We cannot make any assurances regarding our ability to effectively respond to consumer health perceptions or our ability to adapt our menu offerings to trends in eating habits. To achieve profitability, we have implemented cost-reduction initiatives and menu price increases since 2022 and may need to take similar actions in the future. Such measures could limit our ability to compete effectively on price or customer experience and could adversely affect our business, financial condition, and results of operations.
As we expand into new geographic markets and further develop our digital channels (including our Owned Digital Channels), we will face competition from these restaurants as well as new competitors that strive to compete with our market segments, particularly as many of our competitors have increased their digital presence over the last few years, including by enabling delivery and take-out through their digital applications. In particular, we will face increasing competition from delivery kitchens, food aggregators, and food delivery marketplaces (such as DoorDash, GrubHub, Uber Eats, ezCater, Sharebite, and others), grocery stores (particularly those that focus on freshly prepared and organic food), and other companies that are enabling the delivery of food to customers, including delivery marketplaces that we partner with to deliver Sweetgreen food to customers. These food delivery marketplaces own the customer data for Sweetgreen orders placed on such marketplaces and may use such customer data to encourage these customers to order from other restaurants on their marketplaces. Competition from food aggregators and food delivery marketplaces has also increased in recent years, particularly with the significant increase in restaurants that previously focused on dine-in service. Any of these competitors may have, among other things, greater operational or financial resources, lower operating costs, better locations, better facilities, better management, better digital technology, increased automation and production efficiency, more effective marketing, and more efficient operations. Additionally, we face the risk that new or existing competitors will copy, and potentially improve upon, our business model, menu options, technology, presentation, or ambience, among other things.
Any inability to successfully compete with the restaurants or other food companies in our markets and other restaurant segments will place downward pressure on our customer traffic and/or pricing and may prevent us from increasing or sustaining our growth rate or revenue and reaching profitability. Customer tastes, nutritional and dietary trends, methods of ordering, traffic patterns and the type, number, and location of competing restaurants, and ability to timely and effectively deliver food often affect the restaurant business, and our competitors may react more efficiently and effectively to those conditions. In addition, many of our restaurant competitors offer lower-priced menu options, meal packages, loyalty or promotional programs, or offer breakfast, whereas we currently offer only lunch and dinner. Our sales could decline due to changes in popular tastes, “fad” food regimens, and media attention on new restaurants. We cannot make any assurances regarding our ability to effectively respond to changes in consumer health perceptions or our ability to adapt our menu offerings to trends in eating habits. Because of the ample competition in our industry, if our menu does not continue to innovate and provide premier quality food, we may lose customers as a result of a lack of variety or quality. In addition, both fast-food and fast-casual dining segments have implemented and may continue to implement deep discounting strategies to attract customers, which may increase competition or require us to implement discounting strategies to remain competitive. Since August 2022, we have implemented and continue to implement certain cost cutting measures to manage operating expenses at the Sweetgreen Support Center, and we have increased menu prices several times since 2022. These actions were driven by a focus on achieving profitability on an Adjusted EBITDA basis (the “Plan”). We may have to implement additional cost cutting measures or implement additional menu price increases to achieve this goal in future fiscal periods. These cost cutting measures may reduce our ability to compete effectively, which would have an adverse effect on our business, financial condition, and results of operations.
Changes in economic conditionsconditions, macroeconomic and macroeconomic,geopolitical geopolitical,events, and otherpublic majorhealth events,developments whichsuch as a pandemic may includeadversely pandemics and disease outbreaks, driveaffect customer behaviorbehavior, trends, andwhich could have an adverse effect on our business, financial condition, and results of operations.
Our business depends on customer discretionary spending, which is influenced by conditions largely beyond our control. Inflation, high interest rates, recessionary economic cycles, tariffs, reduced consumer confidence, unemployment, higher energy costs, reduced access to credit, or other macroeconomic or geopolitical factors may adversely affect customers’ willingness or ability to spend on meals away from home. During periods of economic stress, consumers may shift toward lower-cost alternatives, reduce the frequency of dining out, or permanently change their discretionary spending habits. Current macroeconomic and geopolitical conditions, including elevated inflation, higher interest rates, and tariffs, increase the risk of a potential recession and may slow our sales growth or contribute to declines. For example, in 2025, we experienced a decrease in Same-Store Sales Change, which may be attributable to a combination of these macroeconomic and geopolitical conditions. Prolonged adverse macroeconomic conditions have previously led us, and could lead us in the future, to reduce our workforce, delay or reduce new restaurant openings or remodels, close restaurants, or record impairment charges.
The restaurant industry depends on customer discretionary spending. The United States has recently been experiencing heightened inflation and economic uncertainty. Going forward, the United States, or one or more of the geographic regions in which we operate, may suffer from depressed economic activity, continued or higher inflation, increased interest rates, recessionary economic cycles, higher fuel or energy costs, low customer confidence, high levels of unemployment, reduced home values, increases in home foreclosures, investment losses, personal bankruptcies, reduced access to credit, or other economic factors that may affect customer discretionary spending and have an adverse effect on our business and financial condition. Consumer preferences tend to shift to lower-cost alternatives during recessionary periods and other periods in which disposable income is adversely affected, including as a result of inflation. Our sales could decline if customers choose to reduce the amount they spend on meals or choose to spend more on food from lower cost competitors as opposed to ordering from our restaurants. Negative economic conditions might cause customers to make long-term or permanent changes to their discretionary spending behavior, including as it relates to dining out, picking up, or ordering delivery.
Current macroeconomic conditions, such as inflation and high interest rates, increase the risk of a potential recession. These macroeconomic conditions can negatively impact consumer discretionary spend for our products. For example, since 2022 we have seen, and may continue to see, sales growth rates slow, or decrease, which may be attributable to a combination of these macroeconomic conditions and an increase in summer travel and a slower than expected return to office. Negative trends in sales, including as a result of prolonged adverse changes in macroeconomic conditions, have in the past caused us and could cause us in the future to, among other things, further reduce our workforce, reduce the number and frequency of new restaurant openings, close restaurants or delay remodeling our existing restaurants, or recognize further asset impairment charges.
A pandemicPandemics or disease outbreakoutbreaks hashave disrupted,in the past and may in the future disrupt,disrupt customer behavior and our business.operations. In the event of a pandemicActual or diseaseperceived outbreak,health therisks risk of contracting such disease couldmay cause customers or employees to avoid gathering in public places,places whichor couldcertain havefoods, adverse effects on ourreduce restaurant customer traffic, the ability to adequately staff restaurants, and our Outpost Channel given work-from-home policies and reduced office schedules. Even if a virus or otherlimit diseasestaffing doesavailability, not spread significantly within a specific area, the perceived risk of infection or health risk in such areaand may adversely affect our business, liquidity, financial condition,Outpost and resultsCatering ofChannel, operations.particularly in connection with work-from-home or hybrid work arrangements. During the COVID-19 pandemic, our in-restaurant foot traffic significantlydeclined declined,significantly, our Outpost Channel (which is now our Outpost and Catering Channel) significantly diminished, and ourdelivery Native Delivery and Marketplace Channels significantlydemand increased. Our In-Store Channel has not recoveredreturned to pre-pandemic levels, and it is uncertain ifwhether it ever will. Both short and long-termLong-term customer behavior trends arefollowing the COVID-19 pandemic remain uncertain for all of our channelschannels. The continued use of remote and thehybrid durationwork ofarrangements, such trends is unknown. In particular, it is uncertain whether, and how frequently, workers will return to officesparticularly in urban centers,centers such as midtown Manhattan orand downtown Chicago, onnegatively a consistent basis, and even if they do, whether they will have a more flexible work schedule, which could reduceimpact our revenues at our urban locations.revenues. To date, employees have returned to offices at a slower rate than anticipated and many companies have shifted to a fully remote or hybrid workforce. If the shift toward remote work trend continues and workers do not return to offices in urban centers, or work from those locations less frequently, our business, financial condition, and results of operations could be adversely affected for an uncertain period of time, even if customers otherwise resume pre-pandemic levels of discretionary spending. Additionally, as consumer behavior trends have changed during and following the COVID-19 pandemic, we have seen an increase in summer travel,and holiday-related travel following the COVID-19 pandemic, which has and may continue to impact the demand for our products. As a result of all of these factors, we may change our plans for future restaurant locations.
Severe weather conditions and natural disasters have adversely affected our restaurant sales and results of operations, and climate change may further increase these adverse effects.
Our business has been and may continue to be materially and adversely affected by severe weather conditions and natural disasters. Among other things, our business is susceptible to storms, fires, flooding, earthquakes, hurricanes, tornadoes, droughts, and prolonged extreme temperatures. These types of events have caused, and may continue to cause, temporary restaurant closures, reduced operating hours, damage to facilities requiring costly repairs, lost inventory, supply interruptions, or delays in the construction of new restaurants. As an example, fires in the Los Angeles region in January 2025 resulted in the temporary closures and reduced operating hours at certain of our restaurants. Natural disasters may also have lingering effects beyond the duration of the event, including disrupted commuting patterns, reduced office attendance, or decreased customer traffic in affected and surrounding areas. Our business has been negatively impacted by such lingering effects after the January 2025 fires in the Los Angeles region.
Adverse weather conditions, particularly in the winter months in key markets such as New York City, Boston, the Washington, D.C./Maryland/Virginia metropolitan region, and Chicago, and unexpected severe weather in markets such as Los Angeles, Georgia, Texas, or Florida, have caused reduced customer traffic and, in more severe instances, temporary restaurant closures. Many of our restaurants have outdoor seating, and adverse weather may limit the use of these areas and negatively affect revenues. These events are often unpredictable and beyond our control and could adversely affect our business, financial condition, and results of operations. We believe that climate change has increased, and may continue to increase, the frequency and severity of severe weather events and natural disasters, which could result in, amongst other things, more frequent or prolonged reductions in customer traffic and restaurant closures, greater property damage, and additional construction delays.
We have incurred significant net losses since inception. We expect our net losses to continue in the foreseeable future, and we may not achieve profitability.
We incurred net losses of $(134.1) million in fiscal year 2025 and $(90.4) million fiscal year 2024. We expect net losses to continue in the foreseeable future. Those losses have been and are expected to be attributable, in part, to our decisions to open new restaurants and formats, fund promotions, invest in our Owned Digital Channels and Marketplace Channel, expand marketing, add products and offerings, and deploy and maintain technology, including the Infinite Kitchen technology and our mobile application. Our restaurants also require ongoing maintenance and renovations, and certain existing restaurants may be retrofitted with Infinite Kitchen units. Temporary closures associated with these activities could reduce sales while certain costs continue. Pre-opening costs, training for new formats, duplicated processes during transitions, and technology depreciation and maintenance may further pressure margins.
Changes in trade policy and tariffs on imported components, packaging, or equipment may increase costs or delay deployments. In addition, macroeconomic or geopolitical conditions, regulatory changes, wage pressures, higher costs of goods sold, increased occupancy, distribution, or energy costs have and may continue to adversely affect our results. For example, in 2025, softer consumer demand negatively impacted our financial results and we expect it to continue to do so at least in the near term. We have implemented cost-reduction measures in the past, including workforce reductions, and may need to implement additional measures in the future, which may not be successful. As a result, our net losses may increase. We will need to generate and sustain increased revenue levels and decrease proportional expenses in future periods to achieve profitability and, even if we do, we may not be able to maintain profitability.
Many of our efforts to generate revenue, particularly with respect to our investments in our Native Delivery, Outpost and Catering, and Marketplace Channels, are unproven and may not be as successful as we have forecasted. For example, orders through these channels rely upon third-party delivery services that are outside of our control, and are susceptible to delivery delays and courier cancellation. Moreover, these channels require the payment of third party delivery fees in order to fulfill deliveries, so have historically carried lower margins than our In-Store and Pick-Up Channels. If we are unable to operate these channels effectively and at scale, or if lower-margin channels increase as a percentage of sales, we may not achieve profitability in the near term or at all.
Our success depends in large part on our ability to persuade consumers that food made with higher-quality, locally sourced ingredients is worth the prices they pay at our restaurants relative to some competitors. We may not successfully educate consumers about the value of our offerings, or consumers may not prioritize quality or sourcing attributes when making purchasing decisions. If customers are not persuaded that we offer good value, they may reduce the frequency or size of their purchases or choose lower-priced alternatives, which could adversely affect our business, financial condition, and results of operations.
We have increased menu prices in recent years, including during fiscal years 2023, 2024 and 2025, and may increase prices further in the future due to higher labor, ingredient, or other operating costs. Additional price increases could negatively affect customer loyalty, reduce demand, or impair our ability to attract new customers, particularly as we expand into new geographic markets where customers may be more price sensitive. Efforts to adjust advertising or promotional strategies to address these risks could also affect our brand positioning.
Macroeconomic conditions, including inflation and higher interest rates, increase the risk of reduced consumer discretionary spending and may further heighten customer price sensitivity. Inflation has increased wage rates and costs of goods sold and has negatively affected our Restaurant-Level Profit. There can be no assurance that future cost increases can be fully offset through menu price increases or that customers will continue to absorb higher prices without a corresponding decline in demand.
One of the key means of achieving our growth strategy is opening new restaurants and operating them profitably. We opened 35 Net New Restaurants in fiscal year 2025 and 25 in fiscal year 2024. We expect approximately 15 Net New Restaurant openings in fiscal year 2026.
One of the key means of achieving our growth strategy for the foreseeable future will be through opening new restaurants and operating those restaurants on a profitable basis. In fiscal year 2024, we had 25 Net New Restaurant Openings, and in fiscal year 2023 we had 35 Net New Restaurant Openings. In the past, we have experienced delays in opening restaurants due to, among other things, supply chain challenges, wage and commodity cost increases as a result of inflation, construction delays, and permitting delays in new developments. Such delays could happen again in future restaurant openings.
In the past, we have experienced delays in opening restaurants due to, amongst other things, supply chain challenges, inflation-driven increases in wage and commodity costs, construction delays, and permitting issues, and such delays may continue to occur. Delays or failures in opening new restaurants, or in launching new restaurant formats (including walk-updrive-up or drive-thru formats or store formats incorporating automation technology such as the Infinite Kitchen), could costresult significant company resources (includingin lost sales and additional labor and marketing costs) and havecould anadversely adverse effect onaffect our growth strategy and our business, financial condition, and results of operations. As we operate more restaurants, our rate of expansion relative to the size of our restaurant base couldmay decline.
One of our challenges is locatingLocating and securing ana adequatesufficient supplynumber of suitable new restaurant sites, bothsites in new geographic markets and in our existing geographic markets where we may already be located at the most desirable restaurant sites. Competition for those siteslocations is intense,increasingly competitive, and other restaurant and retail concepts that compete for those sites may have economic models that permitallow them to bid more aggressively for sites than we can. There is no guarantee that aan sufficientadequate number of suitable sites will be available in desirable areas or on terms that are acceptable to us on acceptable terms in orderexisting, to achieve our growth planadjacent, or meet our economic objectives in new or existing geographic markets. Our ability to identify, secure,secure and open new restaurant sites also depends on other factors, includingincluding, amongst other things:
•identifying and securing ansites with appropriate siteattributes andsuch selecting the best restaurant format for that givenas site and market (including determining whether to test new restaurant formats, including any formats incorporating automation technology), which requires consideration of the likely effectiveness of our multi-channel approach at the site, the size of the site,size, traffic patterns, localnearby retail and business attractions and infrastructure that may drive customer traffic and sales,infrastructure, proximity of the site to our existing restaurants, and anticipated commercial, residentialresidential, and infrastructure development—factors near the site, many of which have becomemade more challenging to analyze due to theby uncertainty ofregarding other companies’ return-to-office plans in various locations;
•negotiating leases with acceptable terms (including but not limited to sufficient tenant improvement allowances);
•identifying and securing sites that can be expected to allow for the timely delivery of the leased premises;
•receiving timely delivery of leased premises to us from our landlords and the punctual commencement of our build-out construction activities;
•obtaining tenant improvement allowances from our landlords;
•properly analyzing financial conditions affectingthat may adversely affect developers and potential landlords, such as the ability ofor landlords and(including developersavailability to receiveof development financing, the effects of macro-economicmacroeconomic conditions, and the credit market,markets) and which couldmight lead to theseproject parties delayingdelays or canceling development projects (or renovations of existing projects), in turn reducing the number of appropriate restaurant sites availablecancellations;
•identifying and securing sites that will have acceptable construction and development resources and costs and that will have access to a sufficient pool of qualified store operations personnel (particularly in competitive markets); and
•managing construction and development costs of new restaurants, particularly in competitive markets;
•obtaining construction materials and labor at acceptable costs, particularly with the increase in inflation;
•maintaining qualified real estate and construction resources to source and manage construction of new sites;
•securing required governmental approvals, permitspermits, and licenses (including construction,construction permits and certificates of occupancy,occupancy) on a timely basis and responding to changes in applicable zoning, land use, environmental, health and safety, and other permits) in a timely mannerrules and respondingregulations effectively(including tointerpretations any changes in local, state, or federal laws or regulations;thereof).
If we do not open new restaurants in the future according to our current plans, the delay could have an adverse effect on our business, financial condition, and results of operations.
•avoiding the impact of inclement weather, natural disasters and other calamities; and
•identifying, hiring, and training qualified employees in each local market.
Given the numerous factors involved, we may not be able to successfully identify and secure a sufficient number of attractive restaurant sites in existing, adjacent, or new markets, which could have an adverse effect on our business, financial condition, and results of operations. For those locations where we are able to secure an attractive restaurant site, our progress in opening new restaurants may occur at an uneven rate. If we do not open new restaurants in the future according to our current plans, the delay could have an adverse effect on our business, financial condition, and results of operations.
Our expansion into new markets may present increased risks.risks and adversely affect our growth and operating results.
We have opened and plan to continue opening restaurants in markets where we have little or no operating experience. Historically, our restaurants have been concentrated in large urban areas, such as New York City, Los Angeles, Boston, and the Washington, D.C./Maryland/Virginia metropolitan area, and we do not currently operate outside of the United States. Restaurants opened in new markets may take longer to achieve expected sales and targeted profit levels and may incur higher construction, occupancy, product, hiring and training, or operating costs than restaurants in existing markets.
New markets may have competitive conditions, customer tastes, and discretionary spending patterns that are more difficult to predict or satisfy, particularly as we expand into suburban or residential areas or more diverse geographic regions. We may also need to invest more than anticipated in advertising and promotional activities to build brand awareness and attract customers in markets where our brand is less established.
Because we seek to locally source ingredients where practicable, expansion into new markets may result in higher costs or limited availability of suppliers that meet our quality standards, distribution model, and food ethos. Costs of goods may increase and supply availability may be constrained by climate conditions or local grower networks. In addition, recruiting, training, and retaining qualified employees who align with our culture may be more challenging in new markets, which could affect consistency and guest experience. We may also incur higher costs in new markets if, for example, regional managers oversee fewer restaurants, local supply chains serve a smaller number of locations, or we are required to comply with new or different labor and employment regulations. As a result, new restaurants may be less successful or may not achieve desired growth rates or sales targets as quickly as restaurants in more established markets. If we are unable to successfully identify attractive locations, build brand recognition, recruit effective talent, attract sufficient customer demand, or otherwise fail to successfully execute our strategic plans with respect to entering into new markets, our business, financial condition, and results of operations could be adversely affected.
If we expand operations outside of the United States, any such expansion may require partnering with, and becoming reliant upon, third parties through partnerships, joint ventures, licensing arrangements, franchising or other contractual relationships.
We have opened and plan to continue opening restaurants in markets where we have little or no operating experience. In particular, our restaurants have historically been heavily concentrated in large urban areas (such as New York City, Los Angeles, Boston, and the Washington, D.C./Maryland/Virginia metropolitan areas), and we do not currently have any restaurants in any markets outside of the United States. Restaurants we open in new markets may take longer to reach expected sales and profit levels on a consistent basis and may have higher construction, product, hiring and training, occupancy, or operating costs than restaurants we open in existing markets, thereby affecting our overall profitability. New markets may have competitive conditions or customer tastes and discretionary spending patterns that are more difficult to predict or satisfy than our existing markets, particularly as we expand outside of large metropolitan areas and into more suburban and residential areas, as well as more diverse geographic markets. We may also need to make greater investments than we originally planned in advertising and promotional activity in new markets to build brand awareness and attract new customers, particularly if we don’t have high brand awareness in such markets. In addition, because we try to locally source as many of our food ingredients as practicable, we may have difficulty sourcing our ingredients from local suppliers and distributors that are in close proximity to our new markets and that meet our quality standards and are appropriate for our distribution model and Food Ethos. Because of the local nature of our supply chain, our costs of goods may increase significantly in a new market and supply chain availability may be limited by the climate and the grower network in a specific market. We may find it more difficult in new markets to hire, motivate, and keep qualified employees who share our vision, passion, and culture. We may also incur higher costs from entering new markets if, for example, we assign regional managers to manage comparatively fewer restaurants than in more developed markets, if our local supply chain only supplies ingredients for comparatively fewer restaurants, or if we need to comply with new labor and employment regulations in such market. As a result, these new restaurants may be less successful or may not achieve desired growth rates or sales targets as quickly as our existing restaurants across our multiple channels. We may not be able to successfully develop critical market presence for our brand in new geographical markets as we may be unable to find and secure attractive locations, build name recognition, or attract enough new customers. Inability to fully implement, or failure to successfully execute, our plans to enter new markets could have an adverse effect on our business, financial condition, and results of operations. In the event we expand our operations outside of the United States, any such expansion may require partnering with and becoming reliant upon a third party, via a partnership, licensing agreement, joint venture, or other contractual relationship.
Severe weather conditions or natural disasters may adversely affect our restaurant sales and results of operations, and climate change may further increase these adverse effects.
Food service businesses such as ours can be materially and adversely affected by severe weather conditions or natural disasters, such as severe rain and snow storms, earthquakes, fires, tornadoes, hurricanes, flooding, prolonged drought, protracted heat or cold waves or other natural disasters. Such occurrences have in the past caused and can cause temporary closures of our restaurants, which impacts our sales at those restaurants. Such conditions may also delay construction of our new restaurants, cause damage to our restaurants that require costly repairs, or result in lost products and interruptions in supply. Global climate change has caused, and may continue to cause, more volatile and severe weather and natural disasters, including more severe storms, droughts, hurricanes, tornadoes, fires, and other natural disasters, may cause a rise in temporary or permanent closures of our restaurants, increased damage to those restaurants, and growing construction delays with respect to our new restaurant openings. As an example, in January 2025, fires throughout the Los Angeles region resulted in temporary closures and reduced operating hours for certain of our restaurants in that region. Natural disasters may also have an impact on our stores in both the impacted and surrounding areas beyond the duration of such event due to factors such as ongoing weather conditions, changes in commuting patterns, or workers not returning to offices. Accordingly, volatile weather is likely to adversely affect our business, financial condition, and results of operations. These events are beyond our control and, in many instances, unpredictable.
In addition, adverse weather conditions, particularly in the winter months in some of our largest markets such as New York City, Boston, the Washington, D.C./Virginia/Maryland metropolitan region, and Chicago, or unexpected adverse weather conditions in markets such as Los Angeles, Georgia, Texas, or Florida, may also impact customer traffic at our restaurants, and, in more severe cases, cause temporary restaurant closures, sometimes for prolonged periods, which could have an adverse impact on our revenues. Many of our restaurants have outdoor seating, and the effects of adverse weather may impact the use of these areas and may negatively impact our revenue. As a result of adverse weather conditions, temporary or prolonged restaurant closures may occur and customer traffic may decline due to the actual or perceived effects of future weather-related events.
New restaurants may not perform as planned or achieve our expected Average Unit Volumes, Same-Store Sales Change, or Restaurant-Level Profit Margin, which could adversely affect our business, financial condition, and results of operations. Our restaurant concept may have limited appeal in new markets, and the popularity of our restaurant concept may decline in existing markets. Newly opened restaurants, whether in existing or new markets, may take longer to reach expected sales and profit levels and may not be successful. Any such underperformance could slow our overall growth and have an adverse effect on our business, financial condition, and results of operations.
If our new restaurants do not perform as planned, our business and future prospects could be harmed. In addition, an inability of our new restaurants to achieve our expected Average Unit Volumes, Same-Store Sales Change, or Restaurant-Level Profit Margin would have an adverse effect on our business, financial condition, and results of operations. We may find that our restaurant concept has limited appeal in new markets, or we may experience a decline in the popularity of our restaurant concept in the markets in which we already operate. Newly opened restaurants in our current markets or our future markets may not be successful, which could have an adverse effect on our business, financial condition, and results of operations.
Further, theThe customer target area offor oureach restaurantsrestaurant varies by location, depending on afactors numbersuch of factors, includingas population density, other localnearby retail and business attractions, areaactivity, demographics, and geography. The opening of aOpening new restaurantrestaurants in or near markets in whichwhere we already have restaurantsoperate could adversely impactreduce sales at existing restaurants, particularly in markets where we have a highly concentrated number of restaurants,markets, such as New York City, Los Angeles, Boston, Chicago, and the Washington,Washington D.C./Maryland/Virginia metropolitan area. Existing restaurants could also make it more difficult to build our customer base for a new restaurant in the same market. We may selectivelyperiodically open newlocations restaurants in and around areas ofnear existing restaurants that are operating at or near capacity to more effectively serve our customers. SalesWe believe these openings cause some sales cannibalization. Such sales cannibalization among our restaurants may become significant in the futureincrease as we continue to expand our operationsrestaurant andfootprint, couldespecially affectwhere our sales growth, in particular if thefood delivery radiusradii of an existing restaurant overlaps with that of a new restaurant, which could, in turn, adversely affect our business, financial condition, and results of operations.overlap.
Additionally, our restaurants must be able to support growth across our In-Store and Pick-Up Channels and, depending on location, through our Native Delivery, Outpost and Catering, and Marketplace Channels. Although we seek to select sites that align with our geographic sales channel strategy, we may not be successful with identifying and securing such sites. Moreover, our geographic sales channel strategy might be incorrect. Historically, shifts in customer behavior (for example, the slower than expected pace of employees’ return to offices following the COVID-19 pandemic) have resulted in some restaurants operating under capacity and others operating over capacity.
We are developing and implementing new restaurant formats, including drive-up and Infinite Kitchen-enabled formats. We have limited experience operating these new formats and we may not be able to operate them as efficiently as we operate our traditional restaurant formats. Accordingly, such formats may not achieve expected efficiencies or returns. We have closed restaurants for performance reasons in the past and may do so again, which could adversely affect our business, financial condition, and results of operations.
Additionally, our restaurants and locations must be able to support growth of not only our In-Store and Pick-Up Channels, but also, depending on location, orders through our Native Delivery, Outpost and Catering, and Marketplace Channels. While we attempt to select our locations to match our geographic sales channel strategy, we may not be effective in doing so (particularly as a result of the difficulty in forecasting potential changes in customer behavior, such as may be the case with respect to companies’ return-to-office plans following the COVID-19 pandemic), which could lead certain restaurants to be under capacity and other restaurants to be at, or over, capacity. We are developing and implementing store concepts that incorporate our Infinite Kitchen automation technology, and may also prioritize the development, or future development, of new restaurant formats, such as walk-up or drive-thru formats. We do not have significant experience in operating such new restaurant formats (including any store formats incorporating the Infinite Kitchen), and we may not be able to operate them as efficiently as we operate our traditional restaurant formats. We have in the past determined to close certain restaurants due to performance and may do so again in the future, which may adversely affect our business, financial condition, and results of operations.
We believe we have built an excellent reputation for the quality of our products, our focus on connecting people with real food, our delivery of a positive customer experience, and our social impact programs. To be successful in the future, we believe we must preserve, grow, and leverage the value of our brand value across all channels.
Brand value is basedinfluenced inby part onsubjective customer perceptions onand amay varietybe ofharmed subjectiveby qualities. Business incidents--incidents, whether isolated or recurringrecurring. andThese whetherincidents originatingmay fromoriginate with us or our businessemployees, delivery partners, fromor anyother ofbusiness our employeespartners or third-party spokespersons that represent the brand,vendors, or even from unrelated food servicesservice businesses,businesses ifthat customers associate those businesses with our ownoperations. operations--thatSuch erode customer trustincidents can significantly reduce brand value, potentially trigger boycottscustomer of our restaurants,boycotts, or resultexpose inus to civil or criminal liabilityliability, and cancould haveadversely a negative impact onaffect our financial results. SuchExamples incidentsinclude, includeamong actualother orthings, perceiveddata-privacy breaches of data privacy; claims by current or former employees, particularly claims of discriminationdiscrimination, harassment, or harassmentunsafe working conditions; controversial social media postsactivity by current or former employees or by other individuals that we work with to market our products; contaminated or unsafe food,food (including allergens); productcommunicable recallsdiseases among food handlers; customer complaints; workforce reductions; storeand employees or other food handlers infected with communicable diseases; failurefailures to follow proper safety protocols;protocols. customerNegative complaints;publicity ormay otherspread potentialrapidly incidentsthrough discussedsocial inand thisdigital riskmedia, factorssometimes section.before we can investigate and respond.
Customer demand and our reputation could also diminish if we, our employees, or business partners or vendors fail to ensure the quality of our products, do not provide customer orders in a timely fashion, or act, or are perceived to act, in an unethical, illegal, racially biased, unequal, or socially irresponsible manner, including with respect to food sourcing practices, employment practices, customer data usage and protection practices, or customer interactions.
We have invested in technology, including the Infinite Kitchen automation technology, to improve store operations. If customers react negatively to these operational changes, in particular, the use of Infinite Kitchen automation technology in certain of our restaurants, our brand value may be diminished. Although we have received national and regional recognition for our food and operations, there is no assurance that such recognition will continue, and any decline could adversely affect our business, financial condition, and results of operations.
Management's Discussion & Analysis (MD&A)
New heading “A discussion regarding our financial condition and results of operations for the year ended December 28, 2025, compared to the year ended December 29, 2024, is presented below. A discussion regarding our financial condition and results of operations for the year ended December 29, 2024, compared to the year ended December 31, 2023, can be found in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 29, 2024, filed with the SEC on February 27, 2025.”
New heading “Recent Developments”
New heading “Comparable Restaurant Base.”
New heading “Comparison of Fiscal Year 2025 and Fiscal Year 2024”
New heading “Impairment and Closure Costs”
New heading “Seasonality and Quarterly Financial Data”
New heading “Impairment and Closure Costs”
Removed heading “Fiscal year 2024, 2023, and 2022 results for AUV and Same-Store Sales Change have been adjusted. See the subsections titled “—Key Performance Metrics” and “—Quarterly Results of Operations” for more information, including a description of the adjustments made to, and the unadjusted values for, AUV and Same-Store Sales Change for the periods presented.”
Removed heading “Factors Affecting Our Business”
Removed heading “Expanding Restaurant Footprint”
Removed heading “Real Estate Selection”
Removed heading “Macroeconomic Conditions, Inflation, and Supply Chain Constraints”
Removed heading “Non-GAAP Financial Measures”
Removed heading “Restaurant-Level Profit and Restaurant-Level Profit Margin”
Removed heading “Adjusted EBITDA and Adjusted EBITDA Margin”
Removed heading “Income Tax (Benefit) Expense”
Removed heading “Results of Operations”
Removed heading “Comparison of Fiscal Year 2024 and Fiscal Year 2023”
Removed heading “Restaurant Operating Costs”
Removed heading “Food, Beverage, and Packaging”
Removed heading “Labor and Related Expenses”
Removed heading “Occupancy and Related Expenses”
Removed heading “Other Restaurant Operating Costs”
Removed heading “Operating Expenses”
Removed heading “General and Administrative”
Removed heading “Depreciation and Amortization”
Removed heading “Pre-Opening Costs”
Removed heading “Loss on Disposal of Property and Equipment”
Removed heading “Interest Income and Interest Expense”
Removed heading “Income Tax (Benefit) Expense”
Removed heading “Comparison of Fiscal Year 2023 and Fiscal Year 2022”
Removed heading “Restaurant Operating Costs”
Removed heading “Food, Beverage, and Packaging”
Removed heading “Labor and Related Expenses”
Removed heading “Occupancy and Related Expenses”
Removed heading “Other Restaurant Operating Costs”
Removed heading “Operating Expenses”
Removed heading “General and Administrative”
Removed heading “Depreciation and Amortization”
Removed heading “Pre-Opening Costs”
Removed heading “Loss on Disposal of Property and Equipment”
Removed heading “Interest Income and Interest Expense”
Removed heading “Contingent Consideration”
Largest changes
“During fiscal year 2022, we implemented the Plan to manage operating expenses at our Sweetgreen Support Center, and incurred total pre-tax restructuring and related charges of approximately $14.4 million. …”see in full comparison
“We define Adjusted EBITDA as net loss adjusted to exclude income tax (benefit) expense, interest income, interest expense, depreciation and amortization, stock-based compensation expense, loss on disposal of property and equipment, other (income) expense, Spyce acquisition costs, our enterprise resource planning system (“ERP”) implementation and related costs, legal settlements, and certain other expenses during the period that management determines are not indicative of ongoing operating performance and, in certain periods, impairment and closure costs, restructuring charges, and employer …”see in full comparison
“Restructuring charges are expenses that are paid in connection with the reorganization of our operations. …”see in full comparison
“(3)Restructuring charges are expenses that are paid in connection with reorganization of our operations. These costs primarily include lease and related costs associated with our vacated former Sweetgreen Support Center, including the impairment and amortization of the operating lease asset, expenses from workforce reductions affecting approximately 5% of employees at our Sweetgreen Support Center, and contract termination costs, related to streamlining our future new restaurant openings.”see in full comparison
“We define Restaurant-Level Profit as loss from operations adjusted to exclude general and administrative expense, depreciation and amortization, pre-opening costs, loss on disposal of property and equipment, and, in certain periods, impairment and closure costs and restructuring charges. Restaurant-Level Profit Margin is Restaurant-Level Profit as a percentage of revenue.”see in full comparison
“Macroeconomic Conditions, Inflation, and Supply Chain Constraints”see in full comparison
Full comparison: every changed paragraph (215)
A discussion regarding our financial condition and results of operations for the year ended December 28, 2025, compared to the year ended December 29, 2024, is presented below. A discussion regarding our financial condition and results of operations for the year ended December 29, 2024, compared to the year ended December 31, 2023, can be found in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 29, 2024, filed with the SEC on February 27, 2025.
Fiscal year 2024, 2023, and 2022 results for AUV and Same-Store Sales Change have been adjusted. See the subsections titled “—Key Performance Metrics” and “—Quarterly Results of Operations” for more information, including a description of the adjustments made to, and the unadjusted values for, AUV and Same-Store Sales Change for the periods presented.
Factors Affecting Our Business
Expanding Restaurant Footprint
Opening new restaurants, including those with Infinite Kitchen technology, is an important driver of our revenue growth. In fiscal years 2025, 2024, 2023, and 2022,2023, we had 35, 25, 35, and 3635 Net New Restaurant Openings,Openings. respectively,One bringingof our totalstrategies count as of December 29, 2024is to 246grow restaurantsour footprint in 22both statesexisting and Washington,new D.C.U.S. markets and, over time, internationally.
As of the end of fiscal year 2025, we utilized the Infinite Kitchen, a kitchen automation technology in 30 of our 281 restaurants. We incorporate the Infinite Kitchen technology into new and existing restaurants based, in large part, upon our evaluation of the potential economic and other benefits for those restaurants. We deployed units of the Infinite Kitchen in 18 of our new restaurants during fiscal year 2025 and 10 of our restaurants during fiscal year 2024. We continue to learn from these deployments and are incorporating our findings into future deployments.
As a premium offering in the fast-casual industry, we are exposed both to consumers trading the convenience of food away from home for the cost benefit of cooking, and to consumers selecting less expensive fast-casual alternatives during weaker economic periods. We have been impacted by a decrease in consumer spending during fiscal year 2025, which we expect to continue at least in the near term. As we focus on discipline with respect to costs and allocation of capital in connection with the Sweet Growth Transformation Plan, we will be opening fewer restaurants in the near term. In fiscal year 2026, we expect approximately 15 Net New Restaurant Openings, with about half featuring Infinite Kitchen units.
We have historically been able to partially offset rising costs - including inflation, tariffs, wage increases and increases in cost of goods sold - through gradual menu price increases, customer service and delivery fees, and operational efficiencies. There can be no assurance that we will be able to continue this practice in the current or future macroeconomic or regulatory environment. We also continue to see variability in our customer traffic patterns, including as a result of many workplaces adopting remote or hybrid models, which has shifted sales away from our In-Store Channel. Our Native Delivery, Outpost and Catering, and Marketplace Channels carry higher costs due to third-party fees, elevated refund rates, and promotional activity, and a continued shift in sales mix toward these channels could pressure margins. However, we expect margins on these channels to improve over time as we achieve greater scale.
For fiscal year 2025, tariffs had minimal net impact on our average new unit development cost due to mitigation efforts including advance purchasing, strategic sourcing, and favorable trade policy changes. We expect to continue to be able to mitigate most of these costs in future periods.
For Infinite Kitchen units, the impact of tariffs in fiscal year 2025 was mitigated, in part, by our prepurchase of certain key materials. Tariffs increased the cost of Infinite Kitchen units by approximately 5% in fiscal year 2025. Going forward, we expect the cost of Infinite Kitchen units to modestly increase when taking into account the expected continuing impact of tariffs and additional amounts due to Wonder pursuant to our supply agreement with Wonder described below.
Management remains committed to mitigating the impact of tariff costs across our supply chain, restaurant build-outs and equipment through ongoing sourcing and cost-optimization strategies that we and our suppliers have implemented. Any future changes to the U.S. government’s trade policies may impact these estimates.
Recent Developments
On December 29, 2025, subsequent to fiscal year 2025 year end, we sold Spyce and certain assets relating to the Infinite Kitchen and other related kitchen automation technology and agreed to provide certain transition services to Wonder (such transaction, the “Spyce Sale”). At the time of the sale, we entered into a supply agreement and a license agreement in which Wonder has agreed to sell Infinite Kitchen units to us on a long-term basis and provide certain services related to the Infinite Kitchen units, including commissioning, support and maintenance.
We are still in the very nascent stages of our journey, and one of our greatest immediate opportunities is to grow our footprint in both existing and new U.S. markets and, over time, internationally.
Real Estate Selection
We utilize a rigorous, data-driven real estate selection process to identify the location and timing of opening new restaurants, both in new and existing U.S. markets and in urban and suburban areas, with high anticipated foot or vehicle traffic and proximity to workplaces, residences and other restaurant and retail businesses that support our multi-channel approach, including our Native Delivery, Marketplace Delivery, and Outpost and Catering Channels.
Macroeconomic Conditions, Inflation, and Supply Chain Constraints
Consumer spending on food outside the home fluctuates with macroeconomic conditions. Consumers tend to allocate higher spending to food outside the home when macroeconomic conditions are stronger, and reduce spending on food outside the home during weaker economies. Our customers have in the past demonstrated a willingness to pay a premium for a craveable, convenient, and healthier alternative to traditional fast-food and fast-casual offerings. However, as a premium offering in the fast-casual industry, we are exposed both to consumers trading the convenience of food away from home for the cost benefit of cooking, and to consumers selecting less expensive fast-casual alternatives during weaker economic periods.
While we have historically been able to partially offset inflation and other increases in the costs of core operating resources, such as wage increases and increases in cost of goods sold, by gradually increasing menu prices or other customer fees, such as service fees and delivery fees, coupled with more efficient purchasing practices, productivity improvements, and greater economies of scale, there can be no assurance that we will be able to continue to do so in the current macroeconomic environment or regulatory environment or in the future. In particular, current and future macroeconomic conditions could cause additional menu price increases to negatively impact our Same Store Sales Growth. There can be no assurance that any future cost increases, including as a result of inflation, can be offset by increased menu prices or that our current or future menu prices will be fully absorbed by our customers without any resulting change to their demand for our products.
We continue to see variability in our customer traffic patterns, including as a result of fluctuations in return to office as a result of many workplaces adopting remote or hybrid models and we expect this variability to continue for the foreseeable future.
In fiscal year 2023, we experienced supply chain disruptions for our bowls and plates, which resulted in the use of alternative packaging solutions. Also, our bowls and plates are produced outside the United States, and may be subject to new or increased taxes, tariffs, or duties in connection with the importation of those items into the United States. Any such new or increased taxes, tariffs, or duties may significantly increase the price that we must pay for such items.
During fiscal year 2024, we began offering steak as a new protein to our menu, which adds a new ingredient for our customer base. With the introduction of beef on our menu, we have experienced and could continue to experience an increase in commodity costs.
Seasonality
Our revenue fluctuates as a result of seasonal factors and weather conditions. Historically, our revenue has been lower in the first and fourth fiscal quarters of the year due, in part, to the holiday season and the fact that fewer people eat out during periods of inclement weather (generally the winter months, though inclement weather conditions may occur in certain markets at any time of the year) than during periods of mild to warm weather (the spring, summer, and fall months). In addition, a core part of our menu, salads, has proven to be more popular among consumers in the warmer months. In recent years, as consumer behavior trends have changed, due in part to the emergence of hybrid or remote work environments, the seasonality in our business has been less predictable than in prior years. We have seen an increase and prolonged negative impact on our revenue around national holidays. Additionally, we have seen extreme weather conditions and natural disasters, such as the wild fires in Los Angeles, cause disruptions to our operations and impact to our first quarter 2025 results.
Our revenue is derived from sales of food and beverage to customers through our five sales channels. We own and operate all of these channels other than our Marketplace Channel, which is operated by various third-party delivery marketplaces.
1.In-Store Channel. Sales to customers who make in-store purchases in our restaurants. Purchases made via cash or credit card are referred to as 'Non-Digital' transactions. Purchases made via digital scan-to-pay or via digital scan-to-earn and scan-to-redeem associated with our SG Rewards loyalty program are included as part of our Owned Digital Channels (defined below).
2.Marketplace Channel. Sales to customers for delivery or pick-up made through third-party delivery marketplaces.
3.Native Delivery Channel. Sales to customers for delivery made through the Sweetgreen website or mobile app.
4.Outpost and Catering Channel. Sales to customers for delivery made through the Sweetgreen website or mobile app to our Outposts, which are our designated offsite drop-off points at offices, residential buildings, and hospitals. In addition, our Outpost and Catering Channel includes our catering offerings, which refer to sales to customers made through our catering website for pickup at one of our restaurants or delivery to a customer-specified address.
5.Pick-Up Channel. Sales to customers made for pick-up at one of our restaurants through the Sweetgreen website or mobile app.
Our revenue is derived from sales of food and beverage to customers through our five sales channels: In-Store Channel, Pick-Up Channel, Native Delivery Channel, Marketplace Channel, and Outpost and Catering Channel. There have been historical fluctuations in the mix of sales between our various channels. Due to the fact that our Native Delivery, Outpost and Catering, and Marketplace Channels require the payment of third-party fees in order to fulfill deliveries, sales through these channels have historically negatively impacted our margins. Additionally, historically, orders on our Native Delivery, Outpost and Catering and Marketplace Channels have resulted in a higher rate of refunds and credits than our In-Store and Pick-Up Channels, which has a negative impact on revenue from these channels. We have also historically prioritized promotions and discounts on our Owned Digital Channels, which also reduces revenue from these channels. If we see a shift in sales through the Native Delivery, Outpost and Catering, and Marketplace channels, our margins may decrease. However, over time, we expect that our margins will improve on our Native Delivery, Outpost and Catering, and Marketplace Channels as we scale each of these channels.
Key Performance Metrics and Non-GAAP Financial Measures
We track the following key performance metrics and non-GAAP financial measures to evaluate our performance, identify trends, formulate financial projections, and make strategic decisions. We believe that these key performance metrics, which include certain non-GAAP financial measures,metrics provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management team. These key performance metrics and non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP,accounting principles generally accepted in the United States of America (“GAAP”), and may be different from similarly titled metrics or measures presented by other companies.
(2)As a result of material, temporary closures of certain stores during the applicable periods, we excluded onethree restaurantrestaurants from the Comparable Restaurant Base as of the end of fiscal year 2024,2025 noand restaurantsone restaurant as of the end of fiscal year 2023, and two restaurants as of the end of fiscal year 2022.2024. Such adjustments did not result in a material change to AUV. No restaurants were excluded as of the end of fiscal year 2023.
(3)For fiscal year 2023, Average Unit Volume and Same-Store Sales Change were adjusted to exclude the 53rd week of operations.operations for comparative purposes. See below under “Average Unit Volume” and “Same-Store Sales Change” additional details.
(4)Our results for the fiscal year ended December 31,28, 2025 have been adjusted to reflect the temporary closures of 15 restaurants and permanent closures of three restaurants, which were excluded from the calculation of Same-Store Sales change. Our results for the fiscal year ended December 29, 2024 have been adjusted to reflect the temporary closures of 8 restaurants, which were excluded from the calculation of Same-Store Sales change. Our results for the fiscal year ended December 31, 2023 have been adjusted to reflect the temporary closures of two restaurants, which were excluded from the calculation of Same-Store Sales change. Our results for the fiscal year ended December 25, 2022, have been adjusted to reflect the temporary closures of 6 restaurants. Such adjustments did not have a material impact on our Same-Store Sales Change for 2025, 2024, 2023, or 2022.2023.
Net New Restaurant Openings reflect the number of new Sweetgreen restaurant openings during a given reporting period, net of any permanent Sweetgreen restaurant closures during the same given period. Before we open new restaurants, we incur pre-opening costs, as further described below. During fiscal year 2025, we plan to integrate our Infinite Kitchen into approximately half of our new restaurants.costs.
AUV is defined as the average trailing revenue for the prior four fiscal quarters for all restaurants in the Comparable Restaurant Base. The measure of AUV allows us to assess changes in guest traffic and per transaction patterns at our restaurants. Fiscal year 2023 was a 53-week year, and in order to provide a measurement period that is consistent with comparable periods that span a 52-week year, rather than simply excluding the extra week, we applied an averaging methodology to the last period of fiscal 2023 to adjust for the extra week. Comparable Restaurant Base for any measurement period is defined as all restaurants that have operated for at least twelve full months as of the end of such measurement period, other than any restaurants that had a material, temporary closure during the relevant measurement period. We excluded one restaurant from the Comparable Restaurant Base as of the end of fiscal year 2024, no restaurants as of the end of fiscal year 2023, and two restaurants as of the end of fiscal year 2022. Such exclusions did not result in a material change to AUV.
Comparable Restaurant Base.
Comparable Restaurant Base for any measurement period is defined as all restaurants that have operated for at least twelve full months as of the end of such measurement period, other than any restaurants that had a material, temporary closure during the relevant measurement period. A restaurant is considered to have had a material, temporary closure if it had no operations for a consecutive period of at least 30 days. We excluded three restaurants from the Comparable Restaurant Base as of the end of fiscal year 2025, and one restaurant as of the end of fiscal year 2024. Such exclusions did not result in a material change to AUV. No restaurants were excluded from the Comparable Restaurant Base as of the end of fiscal year 2023.
Same-Store Sales Change reflects the percentage change in year-over-year revenue for the relevant fiscal period for all restaurants that have operated for at least 13 full fiscal months as of the end of such fiscal period excluding the 53rd week in any 53-week fiscal year; provided, that for any restaurant that has had a temporary closure (which historically has been defined as a closure of at least five days during which the restaurant would have otherwise been open) during any prior or current fiscal month, such fiscal month, as well as the corresponding fiscal month for the prior or current fiscal year, as applicable, will be excluded when calculating Same-Store Sales Change for that restaurant. Fiscal year 2023 was a 53-week year, which resulted in a misalignment in our comparable weeks in fiscal year 2024. To adjust for this misalignment, in calculating Same-StoreSame- Store Sales Change for each fiscal quarter and the full fiscal year 2024, we shifted each week within fiscal year 2023 forward by one week to better align with the 2024 calendar year, specifically to match the timing of holidays and achieve a more accurate comparable Same-Store Sales Change to the prior period. During fiscal year 2025, we excluded 18 restaurants from our Same-Store-Sales Change, including 15 temporary closures and three permanent closures. During fiscal year 2024, we excluded eight restaurants from our Same-Store Sales Change, during fiscal year 2023, we excluded two restaurants from our Same-Store Sales Change, and during fiscal year 2022,2023, we excluded sixtwo restaurants from our Same-Store Sales Change. These adjustments did not result in a material change to Same-Store Sales Change for 2025, 2024, 2023, or 2022.2023.
Our Total Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through all channels except Non-Digital transactions made through our TotalIn-Store Digital Channels.Channel. Our Owned Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through our Owned Digital Channels.Channels, Inwhich recentinclude years,our Pick-Up Channel, Native Delivery Channel, Outpost and Catering Channel (excluding catering orders placed through third-party platforms), and purchases made in our In-Store Channel via digital scan-to-pay, or digital scan-to-earn and scan-to-redeem associated with our SG Rewards loyalty program. With the introduction of our new loyalty program in the second quarter of fiscal year 2025, we have experienced aand reductionanticipate continuing to see an increase in Owned Digital sales, which is realized in our Owned Digital Revenue Percentage and our Total Digital Revenue percentage, which we believe is due to the continuing recovery of our In-Store Channel and growth in third party marketplace.Percentage.
Non-GAAP Financial Measures
In addition to our consolidated financial statements, which are presented in accordance with GAAP, we present certain non-GAAP financial measures, including Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA, and Adjusted EBITDA Margin. We believe these measures are useful to investors and others in evaluating our performance because these measures:
•facilitate operating performance comparisons from period to period by isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. These potential differences may be caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or NOL), and the age and book depreciation of facilities and equipment (affecting relative depreciation expense);
•are widely used by analysts, investors, and competitors to measure a company’s operating performance; are used by our management and board of directors for various purposes, including as measures of performance and as a basis for strategic planning and forecasting; and
•are used internally for a number of benchmarks, including to compare our performance to that of our competitors.
Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA, and Adjusted EBITDA Margin have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. In particular, Restaurant-Level Profit and Adjusted EBITDA should not be viewed as substitutes for, or superior to, loss from operations or net loss prepared in accordance with GAAP as a measure of profitability. Some of these limitations are:
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Restaurant-Level Profit and Adjusted EBITDA do not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
•Restaurant-Level Profit and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
•Restaurant-Level Profit and Adjusted EBITDA do not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to us;
•Restaurant-Level Profit and Adjusted EBITDA do not consider the potentially dilutive impact of stock-based compensation;
•Restaurant-Level Profit is not indicative of overall results of the Company and does not accrue directly to the benefit of stockholders, as corporate-level expenses are excluded;
•Adjusted EBITDA does not take into account any income or costs that management determines are not indicative of ongoing operating performance, such as stock-based compensation; loss on disposal of property and equipment; other (income) expense; Spyce acquisition costs; enterprise resource planning system (“ERP”) implementation and related costs; legal settlements; and, certain other expenses as described in more detail below; and
•other companies, including those in our industry, may calculate Restaurant-Level Profit and Adjusted EBITDA differently, which reduces their usefulness as comparative measures.
Because of these limitations, you should consider Restaurant-Level Profit, Restaurant-Level Profit Margin, Adjusted EBITDA, and Adjusted EBITDA Margin alongside other financial performance measures, loss from operations, net loss, and our other GAAP results.
Restaurant-Level Profit and Restaurant-Level Profit Margin
We define Restaurant-Level Profit as loss from operations adjusted to exclude general and administrative expense, depreciation and amortization, pre-opening costs, loss on disposal of property and equipment, and, in certain periods, impairment and closure costs and restructuring charges. Restaurant-Level Profit Margin is Restaurant-Level Profit as a percentage of revenue.
As it excludes general and administrative expense, which is primarily attributable to our corporate headquarters, which we refer to as our Sweetgreen Support Center, we evaluate Restaurant-Level Profit and Restaurant-Level Profit Margin as a measure of profitability of our restaurants.
The following table sets forth a reconciliation of our loss from operations to Restaurant-Level Profit, as well as the calculation of loss from operations margin and Restaurant-Level Profit Margin for each of the periods indicated:
What changed in the latest 10-Q
Risk Factors
New heading “Food safety and foodborne illness concerns could have an adverse effect on our business.”
Largest changes
“Highly publicized incidents, whether or not accurately attributed to us, and incidents that occur at our suppliers or at other restaurant brands can be rapidly amplified by social and digital media and may negatively affect guest perceptions of our brand and the industry more broadly, and could adversely affect our restaurant revenue on a nationwide basis. For example, in July 2026, U.S. authorities identified a multistate outbreak of cyclosporiasis. …”see in full comparison
“Food safety and foodborne illness concerns could have an adverse effect on our business.”see in full comparison
“Although we maintain rigorous food safety procedures, which includes employee training, we cannot guarantee that our procedures and training will prevent all food safety issues, including illnesses attributable to, among other things, Salmonella, Cyclospora, E. coli, or hepatitis A, and our employees may fail to identify or report unsafe or unsanitary conditions in accordance with our procedures. The ingredients we handle (such as leafy greens and raw chicken) are among the highest risk foods when it comes to food safety and foodborne illness. …”see in full comparison
“We rely on third-party distributors and suppliers, which may make it difficult to monitor food safety compliance and which increases the risk that foodborne illness would affect multiple locations rather than a single restaurant. Our distributors and suppliers may provide us with substitute products, which may not be of equal quality and may complicate traceability in the event of a food contamination incident. …”see in full comparison
Full comparison: every changed paragraph (5)
For a description of risks and uncertainties that could impact our business, including risks and uncertainties related to macroeconomic conditions and changes in consumer discretionary spending and related to U.S. international trade policies, including the imposition of tariffs, and increases in the cost of ingredients and equipment, see Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 28, 2025 (“Annual Report”). ThereOther than as set forth below, there have been no material changes from the risk factors described in our Annual Report.
Food safety and foodborne illness concerns could have an adverse effect on our business.
Although we maintain rigorous food safety procedures, which includes employee training, we cannot guarantee that our procedures and training will prevent all food safety issues, including illnesses attributable to, among other things, Salmonella, Cyclospora, E. coli, or hepatitis A, and our employees may fail to identify or report unsafe or unsanitary conditions in accordance with our procedures. The ingredients we handle (such as leafy greens and raw chicken) are among the highest risk foods when it comes to food safety and foodborne illness. We freshly prepare many items in-restaurant, which may put us at even greater risk for foodborne illness and food contamination outbreaks than some competitors that use more processed foods or commissaries. Such risks also increase when our food is handled outside our control, including orders through Pick-Up, Native Delivery, Outpost and Catering, and Marketplace Channels, particularly if food is not delivered or consumed within the recommended time periods. Our protocols and procedures, and any public statements we make, to respond to any such incident may not be sufficient to protect customers from physical harm and to protect our business and reputation. We may need to temporarily close restaurants, remove items from the menu, or take other corrective actions as a result of any such incident, which could harm our business and reputation.
We rely on third-party distributors and suppliers, which may make it difficult to monitor food safety compliance and which increases the risk that foodborne illness would affect multiple locations rather than a single restaurant. Our distributors and suppliers may provide us with substitute products, which may not be of equal quality and may complicate traceability in the event of a food contamination incident. We may not have sufficient contractual recourse against such third parties, and the insurance carried by us or by our distributors and suppliers may be insufficient to cover related costs.
Highly publicized incidents, whether or not accurately attributed to us, and incidents that occur at our suppliers or at other restaurant brands can be rapidly amplified by social and digital media and may negatively affect guest perceptions of our brand and the industry more broadly, and could adversely affect our restaurant revenue on a nationwide basis. For example, in July 2026, U.S. authorities identified a multistate outbreak of cyclosporiasis. No ingredients in the Company’s supply chain have been identified as part of the cyclosporiasis outbreak investigation, but reduced consumer demand associated with the ongoing incident has and may continue to negatively impact our customer traffic and sales. Additionally, in August 2026, we were notified of a supplier initiated recall of jalapeños associated with a multistate outbreak of Salmonella, which were received by certain of our restaurants. We removed all jalapeños from that supplier and related products from affected areas. We are currently unable to predict the effect this situation may have on consumer demand. Any food safety incident or product recall, whether actual or perceived, could result in negative publicity, reduced traffic, supply disruption, increased costs, litigation, and, among other things, an adverse effect on our business, financial condition, and results of operations.
Management's Discussion & Analysis (MD&A)
Largest changes
“Separately, in August 2026, we were notified of a supplier-initiated recall involving jalapeños. We proactively removed and discarded all jalapeños from that supplier and related products from affected areas. We are currently unable to predict the effect this situation may have on consumer demand. We continue to maintain rigorous food safety protocols across our supply chain and restaurant operations, including supplier qualification requirements, cold chain management, team member training, and third-party food safety audits, and will continue to monitor the situation.”see in full comparison
“In July 2026, U.S. authorities identified a multistate outbreak of cyclosporiasis, a gastrointestinal illness. No ingredients in our supply chain have been identified as part of the cyclosporiasis outbreak investigation, but the ongoing incident has contributed to reduced consumer demand for fresh prepared foods, including salads, which has negatively impacted our customer traffic and sales to date in the third quarter of fiscal year 2026.”see in full comparison
Impairment and closure costs on a dollar basissee in full comparisonincreaseddecreased for both the thirteen and twenty-six weeks endedMarchJune29,28, 2026 compared to the thirteen and twenty-six weeks endedMarchJune30,29,2025,2025 primarily due toannon-cashincreaseimpairmentinchargesclosurerelatedcosts,toincludingpropertylease-relatedandexpenses,equipmentamortizationandofthe related operating leaseassets,assetsandofothertwocostsofassociated withour restaurantsclosedinduringtheandcurrent year period compared to five of our restaurants in the priorto the first fiscal quarter of 2026.year.
For the firstsee in full comparisonquarterhalf of fiscal year 2026, tariffs had minimal net impact on our average new unit development cost due to mitigation efforts including advance purchasing, strategic sourcing, and favorable trade policy changes. Management remains committed to mitigating the impact of tariff costs across our supply chain, restaurant build-outs and equipment through ongoing sourcing and cost-optimization strategies that we and our suppliers have implemented and continue to implement. Any future changes to the U.S. government’s tradepolicies, including developments related to the Supreme Court's February 2026 ruling on tariffs imposed under the International Emergency Economic Powers Act,policies may impacttheseourestimates.estimates regarding tariff costs and the success of our mitigation strategies.
Revenuesee in full comparisondecreasedincreased for thethirteentwenty-six weeks endedMarchJune29,28, 2026 compared to thethirteentwenty-six weeks endedMarchJune30,29, 2025, primarily due to an increase of $34.8 million of incremental revenue associated with 41 Net New Restaurant Openings during or subsequent to the twenty-six weeks ended June 29, 2025. This increase in revenue was partially offset by a decrease in Comparable Restaurant Base revenue of$20.7$31.9 million, resulting in a negative Same-Store Sales Change of12.8%,9.3%,primarily driven by an 11.2% decrease in traffic andreflecting a2.3%3.4% decrease in productmix,mix and a 6.3% decrease in traffic, partially offset by a0.7%0.4% benefit from menu price increases that were implementedsubsequent toduring thethirteenfiscalweeksyear endedMarchDecember30, 2025. Traffic softness reflected the adverse impacts of weather in the current year period and the prior year benefit from the launch of Ripple Fries in the first quarter of28, 2025. The decrease in mix was primarily driven by increased promotionalactivityactivity, a shift inthemenucurrentmixyeartowardsperiodwraps, and thetransition from our former Sweetpass+ program to SG Rewards. This decrease in revenue was partially offset by an increaseremoval of$19.2ripplemillion of incremental revenue associated with 39 Net New Restaurant Openings during or subsequent to the thirteen weeks ended March 30, 2025.fries.
“Revenue increased for the thirteen weeks ended June 28, 2026 compared to the thirteen weeks ended June 29, 2025, primarily due to an increase of $18.4 million of incremental revenue associated with 36 Net New Restaurant Openings during or subsequent to the thirteen weeks ended June 29, 2025. This increase in revenue was partially offset by a decrease in Comparable Restaurant Base revenue of $11.2 million, resulting in a negative Same-Store Sales Change of 6.2%, reflecting a 2.0% decrease in traffic and a 4.2% decrease in product mix. …”see in full comparison
Full comparison: every changed paragraph (42)
We are a mission-driven, next generation restaurant and lifestyle brand that serves healthy food at scale. Our bold vision is to be as ubiquitous as traditional fast food, but with the transparency and quality that consumers increasingly expect. As of MarchJune 29,28, 2026, we owned and operated 285287 restaurants in 24 states and Washington, D.C.
Opening new restaurants, including those with Infinite Kitchen technology, is an important driver of our revenue growth. One of our strategies is to grow our footprint in both existing and new U.S. markets and, over time, internationally. During the thirteen weeks ended MarchJune 29,28, 2026 and MarchJune 30,29, 2025, we had 42 and 59 Net New Restaurant Openings, respectively. During the twenty-six weeks ended June 28, 2026 and June 29, 2025, we had 6 and 14 Net New Restaurant Openings, respectively, bringing our total count as of June 28, 2026 to 287 restaurants in 24 states and Washington, D.C.
As of MarchJune 29,28, 2026, we utilized the Infinite Kitchen, a kitchen automation technologytechnology, in 3335 of our 285287 restaurants. We incorporate the Infinite Kitchen technology into new and existing restaurants based, in large part, upon our evaluation of the potential economic and certain other benefits for those restaurants.
For the first quarterhalf of fiscal year 2026, tariffs had minimal net impact on our average new unit development cost due to mitigation efforts including advance purchasing, strategic sourcing, and favorable trade policy changes. Management remains committed to mitigating the impact of tariff costs across our supply chain, restaurant build-outs and equipment through ongoing sourcing and cost-optimization strategies that we and our suppliers have implemented and continue to implement. Any future changes to the U.S. government’s trade policies, including developments related to the Supreme Court's February 2026 ruling on tariffs imposed under the International Emergency Economic Powers Act,policies may impact theseour estimates.estimates regarding tariff costs and the success of our mitigation strategies.
In July 2026, U.S. authorities identified a multistate outbreak of cyclosporiasis, a gastrointestinal illness. No ingredients in our supply chain have been identified as part of the cyclosporiasis outbreak investigation, but the ongoing incident has contributed to reduced consumer demand for fresh prepared foods, including salads, which has negatively impacted our customer traffic and sales to date in the third quarter of fiscal year 2026.
Separately, in August 2026, we were notified of a supplier-initiated recall involving jalapeños. We proactively removed and discarded all jalapeños from that supplier and related products from affected areas. We are currently unable to predict the effect this situation may have on consumer demand. We continue to maintain rigorous food safety protocols across our supply chain and restaurant operations, including supplier qualification requirements, cold chain management, team member training, and third-party food safety audits, and will continue to monitor the situation.
We also continue to monitor ongoing military conflicts, including the Iran conflict, and their potential impact on our supply chain, construction costs, and the broader macroeconomic environment. We are working with our suppliers to reduce the impacts on buildout costs through strategic contracting and design standardization.
(1) SevenEight restaurants were excluded from the Comparable Restaurant Base for the thirteen and twenty-six weeks ended MarchJune 29,28, 2026. One restaurant was excluded from the Comparable Restaurant Base for the thirteen and twenty-six weeks ended MarchJune 30,29, 2025. Such adjustments did not result in a material change to AUV.
(2) Our results for the thirteen weeks ended MarchJune 29,28, 2026 have been adjusted to reflect the closures of seven restaurants, including one temporary closure and six permanent closures, which were excluded from the calculation of Same-Store Sales Change. Our results for the twenty-six weeks ended June 28, 2026 have been adjusted to reflect the closures of 14 restaurants, including nineeight temporary closures and fivesix permanent closures, which were excluded from the calculation of Same-Store Sales Change. Our results for the thirteen and twenty-six weeks ended MarchJune 30,29, 2025 have been adjusted to reflect the temporary closures of sevenone and eight restaurants, respectively, which were excluded from the calculation of Same-Store Sales Change. Such adjustments did not result in a material change to Same-Store Sales Change for either period.
Comparison of the thirteen and twenty-six weeks ended MarchJune 29,28, 2026 and MarchJune 30,29, 2025
The following table summarizes our results of operations for the thirteen weeks ended MarchJune 29,28, 2026 and MarchJune 30,29, 2025:
The following table summarizes our results of operations for the twenty-six weeks ended June 28, 2026 and June 29, 2025:
During the firsttwenty-six quarterweeks ofended fiscalJune year28, 2026, the Company reported net income, primarily reflecting the impact of the $160.6 million gain on disposal of business from the Spyce sale. The Company reported a loss from operations for the period.
Revenue increased for the thirteen weeks ended June 28, 2026 compared to the thirteen weeks ended June 29, 2025, primarily due to an increase of $18.4 million of incremental revenue associated with 36 Net New Restaurant Openings during or subsequent to the thirteen weeks ended June 29, 2025. This increase in revenue was partially offset by a decrease in Comparable Restaurant Base revenue of $11.2 million, resulting in a negative Same-Store Sales Change of 6.2%, reflecting a 2.0% decrease in traffic and a 4.2% decrease in product mix. The decrease in mix was primarily driven by increased promotional activity, a shift in menu mix towards wraps, and the removal of ripple fries.
Revenue decreasedincreased for the thirteentwenty-six weeks ended MarchJune 29,28, 2026 compared to the thirteentwenty-six weeks ended MarchJune 30,29, 2025, primarily due to an increase of $34.8 million of incremental revenue associated with 41 Net New Restaurant Openings during or subsequent to the twenty-six weeks ended June 29, 2025. This increase in revenue was partially offset by a decrease in Comparable Restaurant Base revenue of $20.7$31.9 million, resulting in a negative Same-Store Sales Change of 12.8%,9.3%, primarily driven by an 11.2% decrease in traffic andreflecting a 2.3%3.4% decrease in product mix,mix and a 6.3% decrease in traffic, partially offset by a 0.7%0.4% benefit from menu price increases that were implemented subsequent toduring the thirteenfiscal weeksyear ended MarchDecember 30, 2025. Traffic softness reflected the adverse impacts of weather in the current year period and the prior year benefit from the launch of Ripple Fries in the first quarter of28, 2025. The decrease in mix was primarily driven by increased promotional activityactivity, a shift in themenu currentmix yeartowards periodwraps, and the transition from our former Sweetpass+ program to SG Rewards. This decrease in revenue was partially offset by an increaseremoval of $19.2ripple million of incremental revenue associated with 39 Net New Restaurant Openings during or subsequent to the thirteen weeks ended March 30, 2025.fries.
As a percentage of revenue, food, beverage, and packaging costs for the thirteen and twenty-six weeks ended MarchJune 29,28, 2026 increased compared to the thirteen and twenty-six weeks ended MarchJune 30,29, 2025, primarily driven by higher overall ingredient usage, investments in chicken and tofu portions, and increased promotional activity through our loyalty program.activity. These increases were partially offset by lower ingredient costs resulting from supply chain savings initiatives.
Tariff costs have been absorbed into our supplier pricing, and while the impact is no longer separately identifiable, we expect it to continue at a similar magnitude to the prior year. Actual impact may vary based on tariff policy changes. In the second quarter of fiscal year 2026, we expect food, beverage, and packaging costs to reflect elevated produce prices resulting from adverse weather conditions and expect to incur incremental fuel surcharges from our distribution network.
As a percentage of revenue, labor and related expenses for the thirteen and twenty-six weeks ended MarchJune 29,28, 2026 increased compared to the thirteen and twenty-six weeks ended MarchJune 30,29, 2025, primarily due to deleverage from lower sales volume as well asand wage inflation.
As a percentage of revenue, occupancy and related expenses for the thirteen and twenty-six weeks ended MarchJune 29,28, 2026 increased compared to the thirteen and twenty-six weeks ended MarchJune 30,29, 2025, primarily due to deleverage from lower sales volume.
As a percentage of revenue, other restaurant operating costs for the thirteen and twenty-six weeks ended MarchJune 29,28, 2026 increased compared to the thirteen and twenty-six weeks ended MarchJune 30,29, 2025, primarily due to deleverage from lower sales volume.volume and, to a lesser extent, higher utilities.
General and administrative expenses on a dollar basis decreased for the thirteen weeks ended MarchJune 29,28, 2026 compared to the thirteen weeks ended MarchJune 30,29, 2025, primarily due to a $4.4$2.8 million decrease in stock-based compensation expense, primarily related to the decrease in expenses associated with restricted stock units and performance-based restricted stock units issued prior to our IPO, and a $1.9$1.2 million decrease in management salary and benefits expense.
General and administrative expenses on a dollar basis decreased for the twenty-six weeks ended June 28, 2026 compared to the twenty-six weeks ended June 29, 2025, primarily due to a $7.2 million decrease in stock-based compensation expense, primarily related to the decrease in expenses associated with restricted stock units and performance-based restricted stock units issued prior to our IPO, and a $3.1 million decrease in management salary and benefits expense.
As a percentage of revenue, general and administrative expenses for the thirteen and twenty-six weeks ended MarchJune 29,28, 2026 decreased compared to the thirteen and twenty-six weeks ended MarchJune 30,29, 2025, primarily due to the net effect of the fluctuations noted above.
As a percentage of revenue, depreciation and amortization for the thirteen weeks ended MarchJune 29,28, 2026 increasedremained flat compared to the thirteen weeks ended MarchJune 30,29, 2025, primarily related to the increase in the total depreciable base, driven by our acceleration of new restaurant growth in the back half of fiscal year 2025 as well as the change in sales volume.2025.
As a percentage of revenue, depreciation and amortization for the twenty-six weeks ended June 28, 2026 increased compared to the twenty-six weeks ended June 29, 2025, primarily related to the increase in the total depreciable base, driven by our acceleration of new restaurant growth in the back half of fiscal year 2025 as well as the change in sales volume.
As a percentage of revenue, pre-opening costs for the thirteen and twenty-six weeks ended MarchJune 29,28, 2026 decreased compared to the thirteen and twenty-six weeks ended MarchJune 30,29, 2025 due to the timing and volume of new restaurant growth as well as the change in sales volume.growth.
Impairment and closure costs on a dollar basis increaseddecreased for both the thirteen and twenty-six weeks ended MarchJune 29,28, 2026 compared to the thirteen and twenty-six weeks ended MarchJune 30,29, 2025,2025 primarily due to annon-cash increaseimpairment incharges closurerelated costs,to includingproperty lease-relatedand expenses,equipment amortizationand ofthe related operating lease assets,assets andof othertwo costsof associated withour restaurants closedin duringthe andcurrent year period compared to five of our restaurants in the prior to the first fiscal quarter of 2026.year.
Loss on disposal of property and equipment on a dollar basis increased for both the thirteen and twenty-six weeks ended MarchJune 29,28, 2026 compared to the thirteen and twenty-six weeks ended MarchJune 30,29, 2025, primarily due to the disposal of equipment at closed or relocated stores.
Restructuring charges for both the thirteen and twenty-six weeks ended MarchJune 29,28, 2026 and MarchJune 30,29, 2025 are primarily related to our former Sweetgreen Support Center, which we vacated in fiscal year 2022, including continued amortization of the operating lease asset and related real estate and common area maintenance charges. Additionally, during the thirteen and twenty-six weeks ended MarchJune 30,29, 2025 we experienced additional restructuring costs including severance and related benefits associated with a reduction in force at our Sweetgreen Support Center and costs associated with vacating our former New York office space.
Interest income, net, decreased for the thirteen and twenty-six weeks ended MarchJune 29,28, 2026 compared to the thirteen and twenty-six weeks ended MarchJune 30,29, 2025, primarily due to a lower cashinterest balancerate and lower interestcash ratebalance in our money market accounts.
During the thirteentwenty-six weeks ended MarchJune 29,28, 2026 we completed the sale of Spyce and certain assets relating to the kitchen automation technology known as the “Infinite Kitchen” and other related kitchen automation technology to certain subsidiaries of Wonder for total consideration of $186.4 million, made up of cash of $100 million and Series C preferred stock of Wonder with an implied value of $86.4 million. In connection therewith, we recorded a pre-tax gain of $160.6 million.
Other expense for the thirteen and twenty-six weeks ended MarchJune 29,28, 2026 increased compared to the thirteen and twenty-six weeks ended MarchJune 30,29, 2025, primarily due to a change in the fair value of our contingent consideration liability in the prior year period, which was issued as part of the Spyce acquisition in the third quarter of fiscal year 2021. The contingent consideration liability was fully extinguished upon payment of the final milestone during the thirteentwenty-six weeks ended MarchJune 29,28, 2026.
The effective income tax rates for the thirteen weeks ended MarchJune 29,28, 2026 and MarchJune 30,29, 2025 were 1.4%0% and —%,0.4%, respectively, primarily due to the full valuation allowance on our net deferred tax assets. Income tax expense for the period increased due to the gain recognized from the Spyce sale completed in early 2026.
The effective income tax rate increased 1.4% for the twenty-six weeks ended June 28, 2026 compared to the twenty-six weeks ended June 29, 2025 due to the gain recognized from the Spyce sale completed in early 2026.
Our results are also influenced by a variety of other factors, including the amount and timing of non-cash stock-based compensation expense, litigation, settlement and other legal costs, impairment charges and other non-operating items, and the timing of marketing or promotional activities.activities, as well as factors outside of our control, such as outbreaks of foodborne illnesses that impact consumer behavior. Quarterly performance may also be affected by the number and timing of Net New Restaurant Openings and any restaurant closures during the period.
To date, we have funded our operations through proceeds received from common stock and preferred stock issuances and debt incurrences, and through cash flow from operations. During the thirteentwenty-six weeks ended MarchJune 29,28, 2026, we completed the sale of Spyce to Wonder for total consideration of $186.4 million, consisting of $100 million in cash and shares of Series C Preferred Stock of Wonder with an implied value of $86.4 million. As of MarchJune 29,28, 2026 and December 28, 2025, we had $156.8$142.6 million and $89.2 million in cash and cash equivalents, respectively. Based on our current operating plan, we believe our existing cash and cash equivalents will be sufficient to fund our operating lease obligations, capital expenditures, and working capital needs for at least the next 12 months. We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities and available cash balances. If we are unable to generate positive operating cash flows, additional debt and equity financings may be necessary to sustain future operations, and there can be no assurance that such financing will be available to us on commercially reasonable terms, or at all.
Our primary liquidity and capital requirements are funding the current operations in our restaurants and Sweetgreen Support Center, new restaurant development, including the deployment of Infinite Kitchen technology, initiatives to improve the customer experience in our restaurants, and general corporate needs. Additionally, during the thirteentwenty-six weeks ended MarchJune 29,28, 2026, we made a cash payment of approximately $5.4 million related to the third Spyce milestone payment. See Note 3, Fair Value, in the accompanying condensed consolidated financial statements included in Part I, Item 1 for further details. We have not required significant working capital because customers generally pay using cash or credit and debit cards and, as a result, our operations do not require significant receivables. Additionally, our operations do not require significant inventories due, in part, to our use of numerous fresh ingredients. Further, we are able to sell most of our inventory items before payment is due to the supplier of such items.
During the thirteentwenty-six weeks ended MarchJune 29,28, 2026, we incurred approximately $12.4$22.5 million in capital expenditures. We expect capital expenditures to decrease in 2026, primarily related to the volume of expected new store openings and Infinite Kitchens.
Our prior revolving credit facility expired pursuant to its terms at the end of 2024. We did not renew such prior credit facility and currently have no outstanding debt. If we decide to incur debt in the future, we will need cash to service any interest and principal payments for such debt.
For the thirteentwenty-six weeks ended MarchJune 29,28, 2026, cash used in operating activities increased by $4.0$14.9 million compared to the thirteentwenty-six weeks ended MarchJune 30,29, 2025. This change was primarily due to a $9.8$16.1 million decrease in income after excluding non-cash items, including the net effect of the gain recognized on the sale of Spyce, as well as a $5.4 million Spyce milestone payment, partially offset by the $11.1$4.3 million impact of other favorable working capital fluctuations, driven by the timing of rent expense, payroll, and prepaid expenses.
For the thirteentwenty-six weeks ended MarchJune 29,28, 2026, cash provided by investing activities was $85.2$73.7 million, an increase of $104.3$118.2 million compared to the thirteentwenty-six weeks ended MarchJune 30,29, 2025. The change was primarily driven by the $100.0 million of cash consideration received from the Spyce sale.sale, as well as a $17.8 million decrease in purchases of property and equipment, primarily due to fewer new restaurant openings in the current year.
For the thirteentwenty-six weeks ended MarchJune 29,28, 2026, cash used in financing activities increased by $1.8$3.0 million compared to the thirteentwenty-six weeks ended MarchJune 30,29, 2025, primarily due to a decrease in proceeds from stock option exercises.
SG insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 6 filings (2 insiders, 2 trade dates, 52,720 shares, about $385.9K). Net open-market shares: -52,720 (purchases minus sales); net value about -$385.9K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-17 | Mcconnell Jamie |
Open-market sale | 15,033 | $6.21 | $93.4K |
| 2026-08-17 | Cochran Jason Miles |
Open-market sale | 4,809 | $6.21 | $29.9K |
| 2026-06-11 | Singer Bradley E |
Grant/award | 24,115 | — | — |
| 2026-06-11 | Moran Montgomery F |
Grant/award | 24,115 | — | — |
| 2026-06-11 | Bornstein Julie |
Grant/award | 24,115 | — | — |
| 2026-06-11 | Ostroff Dawn |
Grant/award | 24,115 | — | — |
| 2026-06-11 | Burrows Clifford |
Grant/award | 24,115 | — | — |
| 2026-06-11 | Blumenthal Neil Harris |
Grant/award | 24,115 | — | — |
| 2026-06-11 | Ru Nathaniel |
Grant/award | 24,115 | — | — |
| 2026-05-18 | Mcconnell Jamie |
Open-market sale | 1,401 | $8.00 | $11.2K |
| 2026-05-18 | Cochran Jason Miles |
Open-market sale | 15,038 | $7.99 | $120.2K |
| 2026-05-18 | Cochran Jason Miles |
Open-market sale | 15,038 | $7.99 | $120.2K |
| 2026-05-18 | Mcconnell Jamie |
Open-market sale | 1,401 | $8.00 | $11.2K |
Well-known investors holding SG (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Baillie Gifford | 2026-06-30 | 10,156,071 | $89.5M | 0.08% | Reduced 2% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 3,289,777 | $29.0M | 0.04% | Added 165% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 2,006,229 | $17.7M | 0.01% | Added 118% |
| Millennium Management (Israel Englander) | 2026-06-30 | 1,225,089 | $10.8M | 0.01% | Reduced 67% |
| Two Sigma Investments | 2026-06-30 | 959,781 | $8.5M | 0.01% | Added 15% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 883,604 | $7.8M | 0.0% | Added 93% |