Why Sweetgreen Stock Tumbled Today

The company cut guidance due to the cyclospora outbreak that started in July.

Shares of Sweetgreen (NYSE: SG) were taking another post-earnings dive after the fast-casual salad chain missed second-quarter estimates and cut its guidance for the year due to the impact of the cyclospora outbreak, though the company has not been directly affected by it.

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The fast-casual chain said same-store sales fell 6.2%, an improvement from the first quarter when they were down 12.8%, but that's still a substantial decline.

Revenue, boosted by new store openings, increased 3.8% to $192.7 million, which missed the consensus at $194.5 million.

Other key metrics were moving in the wrong direction as well. Restaurant-level profit margin fell from 18.9% to 13.1%, and adjusted earnings before interest, taxes, depreciation, and amortization ( EBITDA ) fell from $6.4 million to a loss of $0.2 million.

On the bottom line, its generally accepted accounting ( GAAP ) loss per share expanded from $0.20 to $0.22, worse than the consensus at a loss of $0.12.

Despite the disappointing results, the trend in the quarter was positive. Same-store traffic was down just 2%, with the remaining decline due to price and sales mix, as the company rolled out wraps nationally in the quarter, which are cheaper than its bowls. Average transaction was also down due to discounting. It exited the quarter with flat same-store traffic in June.