Sweetgreen: A Salad’s Improbable Journey

Right. Sweetgreen (SG +0.07%). A company dedicated to the, shall we say, optimized consumption of leafy greens. One might think, in a universe brimming with entropy and the eventual heat death of everything, that a purveyor of pre-mixed salads would be immune to the usual economic anxieties. One would, of course, be quite wrong. The recent headlines suggest a situation best described as…suboptimal.

Why is salad titan Sweetgreen wilting? (A question that, philosophically, applies to all titans, eventually.)
How Sweetgreen Became Millennial Cringe (A surprisingly complex sociological phenomenon. Is it the salads themselves, or the idea of a salad? The line is blurry.)
Sweetgreen vs. Beyond Meat: Which Struggling Stock Is the Better Buy Today? (A contest of attrition, really. Like watching two slightly bruised apples compete for shelf space.)
Sweetgreen development chief to depart amid slower expansion plans (A natural consequence of slowing down. People tend to follow the momentum, or lack thereof.)
Why Sweetgreen (SG) stock is nosediving (A perfectly reasonable response to gravity, one might argue.)

The stock, as of January 22nd, had embarked on a rather dramatic descent, losing a startling 76% of its value over the past year. Three years of losses averaging 8.6% annually suggest a pattern. A pattern, one suspects, that doesn’t necessarily involve dividends. (Which, as a dividend hunter, is a point of some concern. We’re looking for income streams, not performance art.)

What’s going wrong? Well, several things, all conspiring in a manner reminiscent of a particularly chaotic game of cosmic dominoes. Growth is slowing – they’re planning fewer new stores in 2026 than in 2025. (This is, logically, how all things eventually end. Fewer of them.) Revenue growth in the third quarter was…roughly flat. And same-store sales, a metric that always seems unnecessarily complicated, were down nearly 10% year-over-year. A net loss, rather than a profit, was posted. (A perfectly understandable outcome, given the inherent fragility of lettuce.)

Operational problems have surfaced – some locations apparently weren’t meeting standards. (Standards, of course, being entirely subjective constructs. What is a “standard” salad, anyway?) Inflation is making it difficult to keep costs down. (A universal problem, affecting everything from the price of arugula to the existential dread of late-stage capitalism.) And, crucially, consumers are finding it difficult to justify the cost of fairly expensive salads. (A perfectly rational response. One can, after all, survive on considerably less.) Executive departures have also occurred, including that of the co-founder and chief brand officer. (People move on. Even salad people.)

This all adds up to a stock that currently appears undervalued. There’s no current or forward-looking price-to-earnings ratio (unsurprisingly, given the lack of earnings), but the recent price-to-sales ratio of 1.21 is well below the five-year average of 1.9. (Which, in the grand scheme of things, is a statistically insignificant blip. But numbers are comforting, aren’t they?) This low valuation might tempt some, but one should proceed with caution. Is it a bargain, or a value trap? (A question for the ages, really.)

Sweetgreen is attempting to turn things around. Co-Founder and CEO Jonathan Neman notes their priorities: operational excellence, menu innovation, and disciplined growth. (A perfectly reasonable plan. Assuming, of course, that the universe cooperates.) They’re also investing in automation to assemble salads. (A fascinating development. Will robots finally achieve salad supremacy?)

Sweetgreen might successfully navigate these turbulent waters. But for now, I’d recommend a period of observation. It’s not necessarily yesterday’s news, but it’s not exactly shouting “dividend opportunity” either. There are, after all, plenty of other stocks out there. Stocks that, perhaps, don’t rely so heavily on the delicate ecosystem of the romaine lettuce supply chain. (A thought to ponder while you’re, you know, avoiding the heat death of the universe.)

2026-01-27 19:22

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