A lot is riding on the rollout of wraps at Sweetgreen.
The fast-casual chain on Thursday said same-store sales in the first quarter fell nearly 13%, which was the sharpest decline for the chain since it went public in 2021. Traffic was down 11.2%, and the product mix also dipped 2.3%, which was offset a bit by a 0.7% increase in menu prices last year.
It was all around a worsening of results after a very bad 2025, though CEO Jonathan Neman said he was expecting it.
Weather was partly to blame, and the quarter had a tougher comparison from a year ago, when Sweetgreen introduced Ripple fries, which drove initial traffic at the time. (The fries were later killed because they clogged operations.)
But restaurant level margins dropped 800 basis points, year over year. Development is slowing, with the opening of only 13 net new restaurants this year, after opening a net of 39 in 2025. And the company’s stock price has slid more than 60% over the past 12 months.
If ever a restaurant chain needed a white knight marketing play to swoop in and save the day, it is Sweetgreen.
So the big question is: Will wraps do the trick?
Just a few days before reporting earnings, Sweetgreen announced the rollout of its new menu category: Wraps, including three core offerings and a fourth limited-time offer.
Two are like protein-packed salads, wrapped in a giant tortilla, with ingredients already in-house. And two are warm wraps with a rice base, much like a burrito. The limited-time offer is a Korean barbecue variation, made with chicken and a unique apple kimchi sauce.
Sweetgreen tested the wraps across about 70 stores in New York, Los Angeles and the Midwest this spring. The wraps are value-positioned, with prices starting at $10.95 in some markets. All are under $15 (the average is about $12.50).
And Neman said during the company's earnings call on Thursday that the wraps are already showing signs of moving the needle.
Sweetgreen’s sales saw a step up in April as the test expanded to more restaurants, indicating that the wraps were driving incremental traffic from both new and lapsed customers. Guests were also showing strong repeat behavior, he said.
“We are pleased with the combination of incremental traffic and improved customer retention, reflecting strength as a new platform and expanding how guests engage with the brand,” said Neman.
Throughput has been maintained, and the chain is seeing “lower-than-average” guest complaints. The chain is expecting same-store sales for the second quarter to be down only about 4%, which will be a vast improvement.
Sweetgreen is attempting to follow turnaround efforts that have worked for brands like Chili’s and, more recently, Noodles & Company.
It’s about “strengthening operations first to build a more consistent foundation,” he said. “And then layering in menu innovation to drive more durable traffic.”
So far, execution of the new wrap category has been strong, and cost of goods low, said Neman. The build is not unlike a bowl, though there’s a quick wrap-roll-and-cut addition at the end.
Sweetgreen put a lot of thought into the tortilla used, which was created specifically for the wraps. It’s a seed-oil-free product, made with only four ingredients (olive oil, unbleached/unenriched wheat flour, sea salt and water) and no preservatives, in line with the brand's clean ingredient promise.
The wrap rollout has also been accompanied by one the brand’s largest social media marketing campaigns to date, with hundreds of “micro and scaled creators” driving awareness across a diverse range of communities.
@allisonnpascuaal VIRAL chicken caesar wrap!! *Update: 48 grams of protein! #sweetgreen_partner#sweetgreenwraps @sweetgreen 💚 - - - #metgala#justagirl♬ original sound - ally
Later this year, the chain is planning to continue expanding the wrap platform with collaborations with leading chefs, Neman said.
Perhaps most importantly, Neman believes Sweetgreen’s perception of value is improving.
Guests are responding to the price of the wraps, he said, and the Cravings of the Month offers through the loyalty program, with featured entrees around $10, is showing high adoption.
This year, Sweetgreen will start testing a new pricing architecture designed to create more lower entry points to the menu and more transparency about price as guests build their custom bowls.
And Sweetgreen will continue to pound the message that its menu is made with better-quality ingredients that are worth paying a bit more.
“What we offer is really worth the money, and we’re really proud of that,” said Neman.
Sweetgreen has also made its new Chicken Sesame Crunch a permanent menu item. Launched in March, that bowl has become the second highest mixing salad, and also helped drive traffic during the first quarter.
Same-store comparisons will get easier for Sweetgreen as the year progresses. But Neman remains confident that Sweetgreen will have a turnaround story to tell.
Though it may take time.
“We are still in the early innings of our transformation and we are beginning to see signs that the actions we are putting in place are gaining traction,” he said. “The progress through the quarter and into April, along with the energy in the field, reinforces that we are focused on the right operational priorities and building a stronger foundation for Sweetgreen.”
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