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Sweetgreen Faces Traffic Headwinds Amid Cyclospora Outbreak, RBC Says

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Sweetgreen (SG) quantified notable Q3 same-store sales impact through July from the Cyclospora outbreak, even though the company is not directly affected, as consumers show broader aversion to fresh produce, RBC Capital Markets said in a note Friday.

The firm said the impact from a jalapeno recall issued the day before the earnings call is not reflected in guidance.

RBC said wraps have been less incremental than expected, with the national rollout underperforming test markets as stronger results in higher brand awareness markets like New York failed to translate systemwide.

The firm also noted 2027 unit growth coming down, with the company's guidance at or below 2026's 13 net adds, below Street estimates of 16.

RBC lowered its Q3 same-store sales estimates by 600 basis points citing less traffic from the Cyclospora outbreak and Q4 estimates by 450 basis points on continued traffic headwinds.

RBC maintained its outperform rating on the stock but lowered its price target to $6.50 from $7.00.

Price: $5.39, Change: $-0.48, Percent Change: -8.18%

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