Sweetgreen Lowers Annual Forecast as Parasite Fears Stifle Sales

While Sweetgreen has not been linked to the parasite, which has sickened 10,000 people and caused two deaths, the industry-wide backlash is severe. Federal investigators traced the source to iceberg lettuce from a Taylor Farms facility in Mexico, yet the stigma surrounding raw vegetables has hit the entire sector. The company now expects same-store sales to decline by 7% to 8% for the year, a sharp revision from the previous 2% to 4% forecast.

The financial damage extends beyond a single chain. Chipotle Mexican Grill reported a 2% sales impact in late July, while Salad and Go filed for bankruptcy, citing the outbreak as a catalyst for its collapse. For Sweetgreen, the second-quarter results compounded the gloom, with revenue missing analyst expectations and adjusted losses projected to reach as high as $27 million. Management stated that the pace of recovery remains unpredictable as customers continue to avoid prepared salads.