Sweetgreen 2025 Q3 Earnings Misses Targets as Net Loss Widens 73.6%

Sweetgreen reported Q3 2025 results below expectations, with revenue declining 0.6% to $172.39 million and a widened net loss of $36.15 million. The company cut its full-year revenue outlook to $682–$688 million and adjusted EBITDA to a loss of $10–$13 million, reflecting ongoing operational challenges.

Revenue

Total revenue for 2025 Q3 fell to $172.39 million, a 0.6% decline from $173.43 million in the prior-year period. The drop was driven by a 9.5% year-over-year contraction in same-store sales, exacerbated by an 11.7% decrease in customer traffic despite modest menu price increases. Digital sales accounted for 61.8% of total revenue, with 35.3% transacted through owned digital channels. Restaurant-level profit margin compressed to 13.1% from 20.1% in 2024 Q3, underscoring pricing pressures and operational inefficiencies.

Earnings/Net Income

Sweetgreen’s losses deepened to $0.31 per share in 2025 Q3, a 72.2% wider loss compared to $0.18 per share in 2024 Q3. The company’s net loss widened to $36.15 million, a 73.6% increase from $20.82 million in the prior-year period. The EPS and net loss indicate a worsening financial situation, with losses expanding significantly year-over-year.

Post-Earnings Price Action Review

The stock price of Sweetgreen surged 10.10% during the latest trading day but plummeted 8.11% over the subsequent week, ending the month with a 25.61% decline. A strategy of buying shares on the date of earnings releases and holding for 30 days yielded a cumulative loss of -68.2% over three years, averaging -22.7% per quarter. This underperformed a passive holding strategy, which would have resulted in a -79.8% loss over the same period. The earnings-based approach failed to capitalize on short-term gains due to the stock’s rapid post-announcement declines, exposing investors to heightened volatility and risk.

Additional News

Sweetgreen announced the sale of its Spyce robotics unit, developer of the Infinite Kitchen technology, to Wonder for $186.4 million. The deal includes $100 million in cash and $86.4 million in preferred stock, with Sweetgreen retaining licensing rights to the technology. Separately, the company cut 10% of its support center workforce amid declining sales and traffic, citing the need for operational streamlining. Additionally, Sweetgreen removed its air-fried Ripple Fries from menus, attributing the decision to a strategic focus on core offerings and operational consistency.

Guidance

Sweetgreen revised its full-year 2025 guidance downward, projecting revenue of $682–$688 million and same-store sales declines of 7.7% to 8.5%. Adjusted EBITDA is now expected to range between -$13 million and -$10 million, a stark shift from prior profit projections. The company plans 37 net new restaurant openings in 2025, with 18 featuring Infinite Kitchen automation, while 2026 plans include 15–20 new units. Management emphasized cost discipline and operational improvements to stabilize margins amid persistent industry headwinds.

CEO Commentary

CEO Jonathan Neman acknowledged the need for operational excellence and menu innovation to regain customer trust. He highlighted the Sweet Growth Transformation Plan, focusing on brand relevance, food quality, and digital personalization. The transition to the SG Rewards loyalty program and scan-to-pay technology aims to enhance convenience and frequency. Neman reiterated confidence in the long-term value of the Infinite Kitchen licensing agreement, which provides $100 million in liquidity and allows continued automation deployment.

Conclusion

Sweetgreen’s Q3 performance underscores deepening financial and operational challenges, with revenue declines, margin compression, and a deteriorating stock price. The company’s strategic pivot—selling Spyce, cutting costs, and refining its menu—signals a focus on core operations and liquidity. However, the revised guidance and analyst downgrades highlight skepticism about its ability to reverse declining trends. Investors remain cautious as the company navigates a competitive fast-casual landscape and macroeconomic pressures.