Sweetgreen’s first quarter was marked by mixed signals, as the company delivered revenue and profitability above Wall Street expectations, yet faced a sharp market selloff following the announcement. Management attributed the quarter’s performance to operational progress in new restaurant formats, including Infinite Kitchen and sweetlane, as well as strong menu innovation such as the national launch of Ripple Fries. CEO Jonathan Neman highlighted that external headwinds—including adverse weather, holiday timing, and ongoing challenges in key urban markets—contributed to a same-store sales decline. The company also cited a cautious consumer environment as a drag on traffic.
Is now the time to buy SG? Find out in our full research report (it’s free).
Sweetgreen (SG) Q1 CY2025 Highlights:
- Revenue: $166.3 million vs analyst estimates of $164.8 million (5.4% year-on-year growth, 0.9% beat)
- Adjusted EPS: -$0.13 vs analyst estimates of -$0.17 (26.8% beat)
- Adjusted EBITDA: $285,000 vs analyst estimates of -$1.52 million (0.2% margin, significant beat)
- The company dropped its revenue guidance for the full year to $750 million at the midpoint from $770 million, a 2.6% decrease
- EBITDA guidance for the full year is $30 million at the midpoint, below analyst estimates of $33.62 million
- Operating Margin: -17.2%, in line with the same quarter last year
- Locations: 251 at quarter end, up from 227 in the same quarter last year
- Same-Store Sales fell 3.1% year on year (5% in the same quarter last year)
- Market Capitalization: $1.60 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Sweetgreen’s Q1 Earnings Call
- Jon Tower (Citigroup): Asked about the scale of tariff impact on build-out costs. CFO Mitch Reback clarified tariffs would add about 10% to new unit and Infinite Kitchen costs, with pre-purchased materials helping to limit immediate effects, and ongoing efforts to diversify supply chains.
- Jon Tower (Citigroup): Inquired about strategies for introducing lower-priced menu options. CEO Jonathan Neman explained that flexible seasonal menus and the loyalty program allow Sweetgreen to test new price points without adopting a traditional value menu approach.
- Sara Senatore (Bank of America): Probed geographic performance differences, specifically the impact in D.C. and L.A. Reback noted L.A. continues to struggle post-wildfire, while D.C. saw a downturn in April, partly due to older, smaller store formats.
- Zach Ogden (TD Cowen): Asked about sales cadence required to achieve flat same-store sales for the year. Reback said Q2 will be challenging, but expects easier comparisons, seasonal menu launches, and loyalty program ramp-up to improve trends in the second half.
- Christine Cho (Goldman Sachs): Sought updates on capital allocation and unit growth. Neman affirmed the company’s 15% to 20% annual unit growth target, citing robust returns on new stores and Infinite Kitchen formats as supporting continued expansion.
Catalysts in Upcoming Quarters
Looking ahead, our analysts will be watching (1) the ramp-up and sustained engagement of the SG Rewards loyalty program, (2) the performance and customer adoption of new menu collaborations and seasonal launches, and (3) operational improvements in legacy urban markets—especially regarding digital order accuracy and frequency. The ongoing effects of tariffs and the pace of Infinite Kitchen deployments will also be important markers of Sweetgreen’s execution.
Sweetgreen currently trades at $13.65, down from $18.17 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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