(Bloomberg) – Sweetgreen Inc. cuts annual guidance – another suggests that U.S. restaurant spending is softening.
The company now expects sales at established locations to be flat this year, lower than previous forecasts for growth of 1% to 3%. It also lowered revenue expectations and adjusted earnings exclude interest and taxes, according to a statement Thursday.
Stocks fell 7.3% at 4:30 p.m. late trading in New York.
Same-store sales fell 3.1% in the first quarter, less than the 3.5% decline reported by Bloomberg.
The chain warned in February that mature restaurant sales would drop as much as 5%, partly due to extreme weather and fires in Los Angeles, which would generate 15% of the company’s revenue. Its warning is that President Donald Trump’s trade war is causing a downturn in consumer confidence. The performance of restaurants such as McDonald’s Corp., Wendy’s Co. and Chipotle Mexican Grill Inc. is related to financial discomfort.
Sweetgreen’s plan to attract consumers in the first quarter included a ranch avant-garde lineup with higher protein and no seed oil, and despite limited evidence, U.S. Secretary of Health Robert F. Kennedy Jr. condemned the unhealthy. It also introduced aircraft fries that could help boost traffic in early March, according to an analysis of Placer.AI liquidity data by Morgan Stanley analyst Brian Harbour.
Since then, it has launched an improved loyalty program and a new Korean-style menu that fits the strategy of providing more novelty to regular customers. Still, the port is cautious about the price of the chain in a tough economic environment because it is higher than its peers, and because of its popularity as an office lunch concept, he wrote before the income.
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