Sweetgreen’s stock has lost the bulk of its value this year. | Photo: Shutterstock.
This is from the weekly restaurant finance newsletter The Bottom Line. To get this in your inbox every Monday morning, click here.
It’s a good bet that folks at Sweetgreen headquarters are eager to get to 2026 because 2025 has been terrible.
Last week, as my colleague Lisa Jennings reported, the fast-casual salad chain reported a 9.6% decline in same-store sales, including an 11.7% decrease in traffic. It is now rethinking its pricing structure amid frustration about “$20 salads.”
The company’s shareholders hardly needed such news. The company’s stock entered Friday trading down 81% on the year. It fell another 13% on that news. It has now lost nearly 90% of its value since the company’s 2021 IPO.
Sweetgreen blamed weakness among younger consumers that are more pressured in the current economy. But when you lose 12% of your customers in one year, that speaks to fundamental challenges inside the restaurants, not with the economy. A bad economy reveals problems as much as it creates them.
Higher-income consumers that should be Sweetgreen’s core are still spending. They’re spending on delivery right now—just ask my other colleague Joe Guszkowski—and they’re visiting Chili’s en masse.
Sweetgreen is performing worse than fast-casual contemporaries Chipotle or Cava, and much worse than the burger chain Shake Shack, which generated sales growth last quarter even though it doesn’t exactly sell cheap burgers.
The question with Sweetgreen has always been whether America outside its urban core markets would order enough salads to justify the valuations it was getting before its IPO. We have the answer to that question now.
This week’s financial news
The pizza business is having issues. Yum Brands is putting Pizza Hut on the market after its eighth straight same-store sales decline in the U.S. And now Papa Johns is cutting costs after its own sales decline.
Speaking of Yum Brands: KFC, the focus is now all on you.
If you invested $1,000 in Denny’s when it went public in 1998 and sell with its recently announced sale you’d have $625.
Wendy’s is taking a hard look at its restaurants and could close about 300 underperforming locations to build sales. But its focus on unit volumes is the right step.
Beef costs are a problem. Just ask Texas Roadhouse.
Biglari is officially behind two proxy fights involving restaurants.
McDonald’s largely held serve last quarter. The current period should be better, thanks to easier comparisons, but it’s still making a big bet on its Extra Value Meals promotion.
Outback Steakhouse is putting money into its steakhouses and closing more locations.
Here comes a bigger Dutch Bros food menu. Also, here’s what Starbucks thinks of the growing competition from drive-thru beverage brands.
I doubt there will be much uprising over Smashburger’s new logo. It hasn’t kept a logo long enough for people to get close to one.
Number of the week
This graphic tells you everything about why Pizza Hut is now on the market. The chain has stagnated domestically for 20 years at least. And there are now fundamental questions about the future of that business.
Quote of the week
“Most encouraging is the momentum we were building in same-store sales performance. We’ve narrowed our decline to just 3.5%, down from 4.2% in the second quarter, representing our strongest quarterly performance this year.” -Fat Brands CEO Andy Wiederhorn, who officially shifted the restaurant recession into the “less bad is encouraging” phase.
On the blog
I wrote about McDonald’s, Fat Brands and Yum Brands/Pizza Hut. Check out all my blog posts on The Bottom Line.
On the podcasts
On A Deeper Dive I chatted with El Pollo Loco CEO Liz Williams. On The Week in Restaurants we tackled a busy earnings and M&A week.
For questions, comments or story ideas, send me an email at jonathan.maze@informa.com. And follow me on Twitter at @jonathanmaze. And also LinkedIn. And TikTok.
