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The quarter showed clear operational and product positives (successful Wraps rollout, improving throughput and digital/loyalty momentum) and cost discipline in the support center, but these were outweighed by material top-line weakness, sharp margin compression and an adjusted EBITDA loss. Management highlighted improving trends into April and provided guidance that anticipates sequential recovery, but near-term financial results remain challenged and the GAAP net income improvement was driven by a one-time asset sale rather than core operations.
Sweetgreen reiterated fiscal 2026 guidance and near‑term expectations: same‑store sales are expected to decline in the range of -4% to -2% for the year (Q2 expected to land around -4%), full‑year restaurant‑level margin is guided to 14.2%–14.7% and adjusted EBITDA to $1 million–$6 million; unit growth is now expected to be ≈13 net new restaurants (about 18 openings with a few lease‑related closures, nearly half featuring Infinite Kitchen). Near‑term cost assumptions include food, beverage & packaging roughly in line with Q1 (Q1 was 29% of revenue, +250 bps YoY) with transitory produce and fuel pressure, Q2 labor expected in the low‑29% range (Q1 labor was 31.4%, +250 bps YoY), and management is targeting ~40% flow‑through on incremental sales; they also plan loyalty changes (700 pts → $3, 1,200 → $5, 2,000 → free wrap) to drive frequency.
Wraps launched nationwide after a multi-month test across ~70 restaurants; test results showed incremental traffic, strong repeat behavior, lower-than-average guest complaints and ~85% positive social sentiment. Entry price points range from $10.45 to $14.95 and early marketing is one of the company's largest social campaigns to date.
Company reports improved restaurant execution as the quarter progressed — better peak throughput, improved ingredient availability and fewer quality complaints — driven by Project One Best Way and regional Impact Days/Area Leader Summits.
Chicken Sesame Crunch Bowl (launched in March) became the second-highest mixing salad and is now permanent; continued pipeline of core and seasonal innovations planned, including summer/fall updates and chef collaborations.
SG Rewards and Craving of the Month are driving higher frequency and higher net average revenue per user among redeemers; scan-to-pay reached ~20% of in-store transactions and owned/digital channels showed sequential improvement.
G&A expense declined to $29.3 million, down $9.1 million year-over-year; underlying support center costs (ex-stock comp and one-time items) were $23.2 million, down $4.5 million year-over-year following 2025 headcount reductions.
Ended quarter with $156.8 million in cash and 285 restaurants (33 powered by Infinite Kitchen); opened 4 net new restaurants in the quarter and now expect ~13 net new restaurants for fiscal year 2026.
FY26 guidance reiterated for comps of -4% to -2%, with restaurant level margin expected 14.2%–14.7% and adjusted EBITDA of $1 million–$6 million, indicating management expects improvement and positive adjusted EBITDA for the year.
Net income for the quarter was $125.8 million compared to a net loss of $25.0 million prior year, driven primarily by a one-time gain from the sale of Spyce (non-operational benefit to GAAP).
Ladies and gentlemen, thank you for joining us and welcome to the Sweetgreen, Inc. First Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Rebecca Nounou, Vice President, Head of Investor Relations. Please go ahead.
Thank you, everyone, and good afternoon. Speaking on today's call will be Jonathan Neman, Co-Founder and Chief Executive Officer; and Jamie McConnell, Chief Financial Officer. Both will be available for questions during the Q&A session following the prepared remarks. Today's call is being webcast live and recorded for replay. The earnings release is available on the Investor Relations section of Sweetgreen's website at investor.sweetgreen.com. I'd like to remind everyone that the information under the heading Forward-Looking Statements included in our earnings release also applies to our comments made during the call. These forward-looking statements are based on information as of today, and we assume no obligation to publicly update or revise our forward-looking statements. We also direct you to our earnings release for additional information regarding our use of non-GAAP financial measures, including reconciliations of non-GAAP financial measures mentioned on the call with their corresponding GAAP measures.
Our earnings release can be found on our investor website. And now I'll turn the call over to Jonathan to kick things off.
Thank you, Rebecca, and thank you, everyone, for joining us today. We entered 2026 focused on executing our Sweet Growth Transformation Plan, with a clear priority on strengthening our fundamental...