Sweetgreen's third quarter marks a turning point

A collaboration with influencer Molly Baz brought pickle-inflected wraps to the menu. | Photo courtesy of Sweetgreen

Saying turnaround momentum is finally gaining traction, Sweetgreen is not easing up on the gas.

The Sept. 27-ended third quarter was still tough, but it was largely marred by the foodborne illness outbreak earlier this year that didn’t have anything to do with Sweetgreen. Still, consumers avoided salad and fresh produce for several weeks, and that kept them away from the fast-casual chain.

As a result, Sweetgreen’s third-quarter same-store sales were down 6.4%, including a 4.9% decline in traffic and a 2.1% decrease in menu mix that was partially offset by a 0.6% benefit from price increases.

Those results, however, reflected a 500-basis-point decline in traffic attributed to the cyclospora outbreak. And the problem is now over and in the past, said CEO Jonathan Neman.

Now the chain expects to see results from ongoing turnaround efforts.

In October, Sweetgreen said, same-store sales were up 5%, including a 4% increase in traffic. Same-store sales for the fourth quarter are expected to be up 4% — which would be the brand's first positive same-store sales result since the fourth quarter of 2024.

“There’s a lot more to do,” said Neman during the earnings call. “But this quarter offers meaningful encouragement that our strategic priorities are starting to translate into better performance.”

Sweetgreen’s launch of wraps earlier this year has boosted frequency and drew in lapsed guests, particulary Gen Z. The Chicken Caesar wrap has become one of the best-performing menu items with the highest return rate, Neman said. More wraps innovation is planned for next year.

With prices starting at about $11 for the wraps, Sweetgreen’s value perception rating has also improved — though the lower price on wraps has also had a negative impact on menu mix.

Continuing its move away from positioning as a salad brand, Neman said Sweetgreen this week is relaunching its plates category on the menu, featuring a new rotisserie chicken.

Sweetgreen introduced new protein-heavy plates in 2023, and the move helped grow the chain’s dinner business and attracted more male diners. Those plates now represent sales in the “high teens” of the menu mix, including a Caramelized Garlic Steak, a Hot Honey Chicken, and a Miso Salmon, Neman said.

But only about one-third of Sweetgreen’s sales today come after 5 p.m.

“Our next major focus is making Sweetgreen a stronger choice for dinner,” said Neman. “We see significant room to grow, with plates leading the way.”

The hero of the new offering will be a “knife-and-fork” chicken at 150 grams, which he said is about 50% bigger than the current chicken on the menu. Neman did not reveal plans for pricing, though he hinted that the new plates would be a more-premium option in the chain’s barbell pricing strategy.

Also coming is a new Sourdough Chocolate Chip Cookie, made with coconut sugar and no seed oil, and fresh baked in restaurants.

Fundamentally, Neman believes Sweetgreen has an opportunity to expand to more occasions, flavors, and categories — to ultimately shake off its reputation as a salad brand.

“We estimate the addressable category across bowls, plates, sides, beverages, and desserts is approximately seven times the size of the salad category,” he said.

Sweetgreen’s turnaround plan has included Project One Best Way, which has focused on more consistent processes for food preparation, staffing, and peak readiness.

“We are seeing that show up in stronger culinary execution, better deployment and faster throughput,” he said. “We are not yet where we want to be across the fleet, but we have laid the foundation of repeatable, scalable processes.”

The chain, for example, is cooking smaller batches of food more often, which results in hotter and fresher product and less waste.

Sweetgreen is showing improved throughput, he said.

September and October are traditionally slower months for the brand. But the chain’s highest volume restaurants were serving more customers at peak than they were in May and June, said Neman. And 40 restaurants set new peak hour records over the last two months, he said.

Still to come is Sweetgreen’s reworking of pricing on build-your-bowl options, which the chain aims to make more transparent. That test will continue a bit longer before any decisions are made on rollout, he said.

Sweetgreen took 3% in pricing in September, which Neman said was doable because the brand has been slow to increase prices this year, only taking what was needed to offset inflation.

And, because Sweetgreen had lower pricing on some wraps and other entry items, like the Kale Chicken Caesar, impacting the mix, the average check had only about a 1% increase from pricing.

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Lisa Jennings is a veteran restaurant industry reporter and editor who covers the fast-casual sector, independent restaurants and emerging chain concepts.

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