Sweetgreen Inc. (NYSE:SG) shares are trading sharply lower Friday morning after the fast-casual chain delivered weaker-than-expected second-quarter financial results and faced an analyst downgrade.

Financial Results Miss Wall Street Target

For the second quarter ended June 28, Sweetgreen reported a net loss of 22 cents per share, missing consensus estimates of a 14 cent loss per share. Total revenue rose 3.8% year-over-year to $192.66 million, coming in below expectations of $194.90 million.

Same-store sales fell 6.2%, impacted by a 2% decline in traffic alongside a 4.2% drop in product mix due to higher promotional activity. Additionally, restaurant-level profit margin narrowed to 13.1% from 18.9% in the prior-year period. Following the announcement, TD Cowen trimmed its price target on the stock from $8 to $5.

Management Commentary and Outlook

Despite the missed targets, executive leadership expressed confidence in their long-term operational strategy. “Our results are not where they need to be, but the progress we saw in the second quarter reinforces our confidence that the plan is working,” said Jonathan Neman, Co-Founder and Chief Executive Officer.

He added that guest response to new wrap offerings and restaurant execution are improving. Looking ahead, Sweetgreen revised its full-year 2026 outlook downward to reflect reduced demand for fresh prepared foods following a multistate outbreak of cyclosporiasis, projecting a same-store sales decline between 7% and 8%.

SG Shares Slide Friday Morning

SG Price Action: Sweetgreen shares were down 9.71% at $5.30 during premarket trading on Friday, according to Benzinga Pro data.

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