Sweetgreen Reports Q4 Losses, Plans Menu Changes and Restaurant Closures

Sweetgreen Faces Financial Setback, Unveils Strategic Overhaul

Sweetgreen has announced its financial results for the fourth quarter and full year 2025, revealing performance that fell short of market expectations. In response, the company is preparing to implement a series of strategic adjustments across its menu, pricing, and restaurant portfolio to reignite growth and improve profitability.

Financial Performance Highlights

The fourth quarter of 2025 saw same-store sales decline by 11.5%, largely due to a 13.3% drop in traffic and mix, which was only partially offset by a modest 1.8% increase in menu prices. This trend contributed to a challenging year overall for the fast-casual chain.

For the full year 2025, same-store sales decreased by 7.9%. The company's net loss significantly widened to $134.1 million, a considerable increase from the $90.4 million loss reported in the previous year. Despite these financial pressures, Sweetgreen continued its expansion, opening 35 new restaurants in 2025 and bringing its total footprint to 281 locations.

Sweetgreen's financial results for Q4 and full year 2025 did not meet expectations, with a substantial decline in same-store sales and an expanded net loss, prompting a strategic pivot.

Strategic Adjustments Unveiled

Sweetgreen is launching a "Sweet Growth Transformation Plan" aimed at enhancing value perception and accessibility. This strategy includes evaluating and potentially closing underperforming restaurants, particularly those not generating positive cash flow, as leases conclude this year.

A key part of the transformation involves re-evaluating the menu and pricing strategy:

• Wraps Test: Sweetgreen is currently testing a new line of wrap sandwiches, priced under $15, with some options starting at $10.95 in New York City. Initial customer feedback has been positive, suggesting a strong potential to attract new customer segments. A wider rollout is being considered for the second quarter of the year.
• Loyalty Program Offers: To re-engage its loyalty members, Sweetgreen has introduced lower-priced seasonal items. These include a $10 "Tis the Season" bowl and a $10 "Chicken Avocado Ranch" offer. The company plans to continue this approach with a "Craving of the Month" exclusive to encourage more frequent visits.
• Pricing Simplification: To improve the customer experience and maintain margins, Sweetgreen intends to simplify the pricing structure for its popular build-your-own bowl option, which accounts for roughly 25% of its total sales.

Sweetgreen has also been actively working on improving food quality and operational execution. The company revised cooking methods for salmon and chicken, enhanced rice quality, and introduced a new golden quinoa variety.

Previously, an increase in protein portions led to a nearly 700 basis point drop in restaurant-level margins, bringing them down to 10.4%. To address this and improve overall efficiency, Sweetgreen implemented "Project One Best Way" alongside a new performance scorecard. These operational improvements have been effective, with two-thirds of restaurants now meeting operational standards, contributing to better comparable sales and customer retention.

Sweetgreen's Vision for 2026

Looking ahead, Sweetgreen projects a same-store sales decline of 4% to 2% for 2026. The company plans to open a net of 15 new restaurants during the year, with approximately half of these new locations featuring its automated "Infinite Kitchen" formats.

For 2026, Sweetgreen anticipates a continued decline in same-store sales but plans strategic growth with 15 new restaurant openings, half of which will incorporate automated "Infinite Kitchen" technology.