Bad weather, the lingering impact of the Los Angeles fires and the broader consumer slowdown took a toll at Sweetgreen in the first quarter, the fast-casual salad chain said Thursday.
Same-store sales declined 3.1%, including a 6.5% decrease in traffic and product mix that was partially offset by a 3.4% benefit from menu price increases. The Southern California fires in January, in particular, continued to impact sales. About 15% of Sweetgreen’s system sales volume comes from the Los Angeles area.
Comparable sales turned positive in March as Sweetgreen debuted the new air-fried Ripple Fries. But then Trump Administration announcements about tariffs in April scared consumers off discretionary purchases—particularly in Washington, D.C., where the brand was born and still has a big presence. The greater D.C. area has been hit hard by federal government layoffs.
Usually, April is a great month for Sweetgreen, because good weather tends to put healthful brands top of mind. “This is the first time we haven’t seen that,” said Mitch Reback, Sweetgreen’s CFO.
“We believe this is noteworthy and reflective of the volatile external environment and the softening consumer sentiment marked by more deliberate purchasing behavior and lower frequency across discretionary categories,” he noted.
The Ripple Fries launch was late in the quarter, but CEO Jonathan Neman said they quickly became the most-attached side, lifting ticket averages. And more menu innovation is coming.
Sweetgreen’s marketing calendar the rest of the year will bring “a steady cadence of newness,” with promotions like the first Korean barbecue-inspired limited-time offers starting next week, in collaboration with the hot New York steakhouse COTE Korean Steakhouse.
Neman said the new-and-improved loyalty program is also expected to help drive traffic and increase frequency.
The chain’s reworked loyalty program is adding about 20,000 members each week. That weekly increase is more than the base under the previous iteration, in which guests paid up front for an annual or monthly subscription.
Sweetgreen opened five new restaurants during the quarter, and still plans to open 40 this year, about half of which will have the automated digital makeline format, known as Infinite Kitchens.
Neman also said the company is ready to move forward with drive-thru locations, which the chain calls Sweetlanes.
The first Sweetlane unit opened in Schaumberg, Illinois, in 2022 and has shown an average unit volume and margins above the fleet average, with comparable sales up 20% at that unit year over year.
This year Sweetgreen will open two more—one classic drive-thru and a second Sweetlane that will be fitted with the Infinite Kitchen automation. More are planned for 2026, Neman said.
Sweetgreen will move into three new markets this year: Sacramento; Phoenix and Cincinnati.
Tariffs, meanwhile, are not expected to shift Sweetgreen’s accelerated growth strategy.
At this point, Reback estimated tariffs will increase unit buildout costs by about 10%, but not until late in the year because Sweetgreen has pre-purchased much of the materials they will need to meet growth goals.
Infinite Kitchens, which cost roughly $450,000 to $500,000 to build, are somewhat exposed, with about 15% of unit costs tied to China, Reback said.
But, because the Infinite Kitchen units tend to perform better than the system average with less labor, the return on capital remains “wildly accretive,” Reback said, “and that’s at current labor rates. When you look out over the next 10 years, we see labor continuing to increase and those returns increasing.”
Given the uncertainty ahead, Sweetgreen has no plans to increase menu prices for the rest of the year, Neman said.
Revenues for the quarter increased 5.4% to $166.3 million, and the chain narrowed its net loss to $25 million, compared with a loss of $26.1 million in the first quarter last year.
Despite what he sees as short-term volatility, Neman said Sweetgreen has levers to pull to navigate the moment. But the chain downgraded same-store sales expectations for the year, projecting they will be flat.
Earlier, Sweetgreen had projected comparable sales growth of 1% to 3% for the year.
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