Casual salad chain Sweetgreen (NYSE: SG) missed Wall Street’s revenue expectations in Q4 CY2025, with sales falling 3.5% year on year to $155.2 million. Its GAAP loss of $0.42 per share was 28.2% below analysts’ consensus estimates.
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Sweetgreen (SG) Q4 CY2025 Highlights:
- Revenue: $155.2 million vs analyst estimates of $158.9 million (3.5% year-on-year decline, 2.3% miss)
- EPS (GAAP): -$0.42 vs analyst expectations of -$0.33 (28.2% miss)
- Adjusted EBITDA: -$13.34 million (-8.6% margin, 2,227% year-on-year decline)
- EBITDA guidance for the upcoming financial year 2026 is $3.5 million at the midpoint, below analyst estimates of $4.98 million
- Adjusted EBITDA Margin: -8.6%, down from -0.4% in the same quarter last year
- Same-Store Sales fell 11.5% year on year (4% in the same quarter last year)
- Market Capitalization: $693.7 million
Company Overview
Founded in 2007 by three Georgetown University alum, Sweetgreen (NYSE: SG) is a casual quick service chain known for its healthy salads and bowls.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years.
With $679.5 million in revenue over the past 12 months, Sweetgreen is a small restaurant chain, which sometimes brings disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale. On the bright side, it can grow faster because it has more white space to build new restaurants.
As you can see below, Sweetgreen’s 16.3% annualized revenue growth over the last six years was excellent as it opened new restaurants and expanded its reach.
This quarter, Sweetgreen missed Wall Street’s estimates and reported a rather uninspiring 3.5% year-on-year revenue decline, generating $155.2 million of revenue.
Looking ahead, sell-side analysts expect revenue to grow 11% over the next 12 months, a deceleration versus the last six years. Still, this projection is healthy and implies the market is baking in success for its menu offerings.
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Restaurant Performance
Number of Restaurants
The number of dining locations a restaurant chain operates is a critical driver of how quickly company-level sales can grow.
Over the last two years, Sweetgreen opened new restaurants at a rapid clip by averaging 11.9% annual growth, among the fastest in the restaurant sector. This gives it a chance to scale into a mid-sized business over time.
When a chain opens new restaurants, it usually means it’s investing for growth because there’s healthy demand for its meals and there are markets where its concepts have few or no locations.
Note that Sweetgreen reports its restaurant count intermittently, so some data points are missing in the chart below.
Same-Store Sales
The change in a company's restaurant base only tells one side of the story. The other is the performance of its existing locations, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales gives us insight into this topic because it measures organic growth at restaurants open for at least a year.
Sweetgreen’s demand within its existing dining locations has barely increased over the last two years as its same-store sales were flat. Sweetgreen should consider improving its foot traffic and efficiency before expanding its restaurant base.
In the latest quarter, Sweetgreen’s same-store sales fell by 11.5% year on year. This decrease represents a further deceleration from its historical levels. We hope the business can get back on track.
Key Takeaways from Sweetgreen’s Q4 Results
We were impressed by how significantly Sweetgreen blew past analysts’ EBITDA expectations this quarter. We were also happy its same-store sales was in line with Wall Street’s estimates. On the other hand, its full-year EBITDA guidance missed and its EPS fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $6.11 immediately after reporting.
The latest quarter from Sweetgreen’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
