Sweetgreen shares tumble as cyclospora fears and jalapeño recall hit sales

Sweetgreen saw its shares slide about 10% on Friday as diners avoided its offerings amid a nationwide cyclospora outbreak, even though the chain has not been implicated. In its Thursday earnings release, the company lowered its annual adjusted EBITDA loss outlook to a range of $27 million to $23 million and projected same-store sales could contract 7% to 8%, worse than earlier estimates. Quarterly comparable sales fell 6.2% for the period ending June 28, marking the sixth straight month of decline.

The firm also announced a voluntary removal of jalapeño peppers after a salmonella recall tied to Mexican-grown peppers supplied by Coast Citrus Distributors, noting the ingredient appears in only two of its fifteen dressings. CEO Jonathan Neman said the impact on overall sales is expected to be minimal, but the combined health scares have heightened uncertainty about the pace of recovery for fresh-food retailers.