Sweetgreen Expects Another Challenging Year Ahead. Is the Stock Destined for More of a Decline?

It has been more than four years since fast-casual restaurant chain Sweetgreen (NYSE: SG) went public in November 2021. While the company looked to be a promising investment at the time, by focusing on green and healthy meals, it didn't take long for it to fall out of favor with investors. Since going public, Sweetgreen's stock has lost close to 90% of its value.

While the stock did experience a resurgence in 2024, it has found its way back into the abyss, with investors feeling more bearish than ever about the business. Sweetgreen is coming off a tough year, and unfortunately, it expects more challenges ahead. Is there so much bearishness priced into its valuation that it can arguably make for a good contrarian buy, or is this simply a risky growth stock you should avoid?

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Sweetgreen is struggling to grow sales

Last month, Sweetgreen reported its latest quarterly earnings numbers, which were troubling. And its guidance wasn't encouraging, either. For the three-month period ending Dec. 28, 2025, the company's revenue declined by roughly 4%, to $155.2 million. Its same-store sales, which include only stores that were open a year ago, were down by nearly 12% as traffic was down significantly.

To make matters worse, Sweetgreen anticipates a further decline in same-store sales this year, projecting a 2% to 4% decline in 2026. The company is, however, working on ways to try to reenergize its growth by testing out the success of wrap sandwiches, and it plans to improve checkout times.

Is the stock too risky to buy?

Sweetgreen has positioned itself as a healthy food option for consumers, but the problem is that the company's salads are proving to be far too expensive. There's no shortage of social media posts complaining about the company's high-priced salads, which can exceed $20. At a time when consumers are looking to save money on eating out, Sweetgreen's business is finding it difficult to prove to customers that it offers value.

This year, the restaurant stock is down 11%, and that's after an already brutal 2025, when it declined by an incredible 79%. Things are going from bad to worse for Sweetgreen stock, with the only saving grace being potentially that, at this point, a ton of bearishness is already factored into its share price.

I wouldn't, however, suggest buying the stock even though it may seem cheap. Sweetgreen has an uphill battle ahead to prove to consumers that it does provide good value, because right now, the results appear to suggest otherwise. I'd take a wait-and-see approach with the stock, as it does look far too risky to own, even at its reduced valuation.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool recommends Sweetgreen. The Motley Fool has a disclosure policy.