Sweetgreen Forecasts Continued Struggles, Stock Faces Further Pressure

Sweetgreen Inc. (SGNL) has issued a cautious outlook for fiscal 2026, anticipating continued pressure on same-store sales and margins. The company cited persistent consumer caution, especially in higher-income segments, as a key drag on performance, with same-store sales expected to decline by 3% to 5% compared to the prior year. This follows a 4.2% drop in same-store sales during fiscal 2025, signaling a sustained downturn in demand. The company's adjusted EBITDA margin is projected to narrow to 12.8%, down from 14.3% in 2025, reflecting increased operating costs and slower menu pricing pass-through. Despite a modest increase in new store openings—planned at 47 locations in 2026 compared to 42 in 2025—management acknowledged that store-level economics remain under strain, with average unit volumes below pre-pandemic levels. The stock, trading at approximately $38.60 as of early March 2026, has declined 22% year-to-date, outpacing the broader consumer discretionary sector (XLY), which is down 7.1%, and the S&P 500 (SPY), which is down 4.8%. Analysts have expressed skepticism, with two of the five major firms covering SGNL lowering their price targets to $42 from $48, citing weak customer return trends and delayed turnaround plans. Investors are closely watching whether Sweetgreen can execute its rebranding efforts and digital engagement initiatives, which are expected to be pivotal in reversing the current trajectory. However, the lack of clear momentum in the most recent earnings call has dampened confidence, with short interest rising to 11.3% of float—up from 8.7% at the end of 2025.