Sweetgreen Q2 Revenue Falls Short, Same-Store Sales Decline 7.6% Despite Menu Price Increases

Sweetgreen reported Q2 sales of $185.6 million, missing estimates by $6.13 million and showing minimal growth YoY. Same-store sales declined 7.6%, reversing last year's positive growth, due to lower traffic and mix despite menu price increases. Restaurant-level profit margin was 18.9%, down from 22.5% in Q2 FY2024, as costs rose and core profitability declined. The company opened 9 net new restaurants but faced operational challenges and disappointing demand trends.

Title: Sweetgreen Reports Mixed Q2 Financials, Slashes Full-Year Guidance

Sweetgreen Inc. (NYSE: SG) reported its second-quarter (Q2) financial results on August 7, 2025, revealing a challenging period marked by declining same-store sales and a significant drop in revenue. The fast-casual restaurant chain, known for its plant-forward salads and bowls, saw its GAAP revenue fall short of expectations at $185.6 million, missing the analyst estimate by $6.13 million and showing minimal year-over-year (YoY) growth.

Key Points
- Revenue (GAAP): $185.6 million
- Same-Store Sales Change: -7.6%
- Restaurant-Level Profit Margin (non-GAAP): 18.9%
- Adjusted EBITDA: $6.4 million

Same-store sales declined by 7.6%, reversing the positive growth of 9.3% seen in Q2 FY2024. This decline was primarily driven by a 10.1% fall in customer traffic and changes in the product mix, despite menu price increases that provided a partial offset. The company opened 9 net new restaurants, but the revenue from these new locations was nearly canceled out by a $13.9 million decline in revenue from existing stores.

The company's restaurant-level profit margin dropped to 18.9%, down from 22.5% in Q2 FY2024, due to increased costs and lower same-store sales. Adjusted EBITDA, a non-GAAP measure of core operating cash flow, halved from the previous year, reflecting the operational challenges faced by the company.

Management cited several factors contributing to the disappointing results, including macroeconomic pressures, a challenging comparison to last year’s strong Q2, and the transition of the loyalty program. Despite these challenges, the company maintained its expansion plans, targeting at least 40 net new restaurant openings in 2025, with 20 featuring the company’s automated "Infinite Kitchen" technology.

Sweetgreen also lowered its full-year revenue guidance to between $700 million and $715 million, down from the previous range of $740–$760 million. The company now projects same-store sales to decline between 4% and 6% for the year, with restaurant-level profit margin forecast at approximately 17.5%.

References
1. [Sweetgreen Reports Mixed Q2 Financials](https://www.nasdaq.com/articles/sweetgreen-sg-q2-sales-drop-76)
2. [Sweetgreen Shares Tumble as Sales Stall and Guidance Disappoints](https://www.investing.com/news/earnings/sweetgreen-shares-tumble-21-as-sales-stall-and-guidance-disappoints-93CH-4178492)