Casual salad chain Sweetgreen (NYSE:SG) missed Wall Street's revenue expectations in Q3 CY2025, with sales flat year on year at $172.4 million. The company's full-year revenue guidance of $685 million at the midpoint came in 2.5% below analysts' estimates. Its GAAP loss of $0.31 per share was 76.2% below analysts' consensus estimates.
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Sweetgreen (SG) Q3 CY2025 Highlights:
* Revenue: $172.4 million vs analyst estimates of $177.9 million (flat year on year, 3.1% miss)
* EPS (GAAP): -$0.31 vs analyst expectations of -$0.18 (76.2% miss)
* Adjusted EBITDA: -$4.36 million vs analyst estimates of $3.99 million (-2.5% margin, significant miss)
* The company dropped its revenue guidance for the full year to $685 million at the midpoint from $707.5 million, a 3.2% decrease
* EBITDA guidance for the full year is -$11.5 million at the midpoint, below analyst estimates of $10.65 million
* Operating Margin: -21%, down from -12.2% in the same quarter last year
* Same-Store Sales fell 9.5% year on year (6% in the same quarter last year)
* Market Capitalization: $764.8 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
A company's long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.
With $685.2 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 sales grew at an excellent 17% compounded annual growth rate over the last six years (we compare to 2019 to normalize for COVID-19 impacts) as it opened new restaurants and increased sales at existing, established dining locations.
This quarter, Sweetgreen missed Wall Street's estimates and reported a rather uninspiring 0.6% year-on-year revenue decline, generating $172.4 million of revenue.
Looking ahead, sell-side analysts expect revenue to grow 16% over the next 12 months, similar to its six-year rate. Despite the slowdown, this projection is commendable and indicates the market sees success for its menu offerings.
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