Sweetgreen falls 10% as latest victim of cyclospora fears, removes jalapeños over second outbreak. By News Room 7 August 2026 4 Mins Read Between hellacious jalapeños and lamentable lettuce, salad-centric chains are getting slammed. The latest victim is Sweetgreen, shares of which fell 10% Friday after the "slop bowl" chain said diners are avoiding its salads over fears of a cyclospora outbreak and removed jalapeño peppers from its restaurants due to a separate string of illnesses. In its earnings report Thursday evening, Sweetgreen slashed its full-year forecast to an adjusted loss before interest, taxes, depreciation and amortization of $27 million to $23 million - much deeper than its previous estimate of $1 million to $6 million. The company also said it expects its annual same-store sales could shrink 7% to 8% this year, worse than a previous forecast of a 2% to 4% decline. "The company's updated outlook reflects reduced consumer demand for fresh prepared foods due to the multistate outbreak of cyclosporiasis since mid-July," Sweetgreen said in a statement. "The pace and timing of recovery remain uncertain." For the second quarter ending June 28, Sweetgreen's same-store sales fell 6.2% - its sixth straight decline. The stock has plunged roughly 30% since mid-July as fearful diners avoid salads and fresh produce over fears of cyclospora, an explosive diarrhea-causing parasite - even though Sweetgreen and its products have not been linked to the outbreak. But it seems Sweetgreen's outbreak troubles are not yet behind the salad chain, as it revealed on Thursday that it removed jalapeños from its supply chain earlier this week amid a new salmonella outbreak. "In a separate and unrelated matter, a voluntary recall involving jalapeños was issued yesterday. As an added precaution, we proactively removed and discarded all jalapeño from the supplier in the affected areas," CEO Jonathan Neman said during an earnings call Thursday. "Jalapeños are used in only two of our 15 dressings and nowhere else on our menu, representing a very small portion of our sales mix. Because the communication was issued only yesterday, it is too early to reasonably estimate any potential impact," Neman added. The salmonella outbreak - which has sickened at least 345 people and led to 36 hospitalizations across the country - has been linked to fresh jalapenos from Mexico supplied by Coast Citrus Distributors. Thanks for signing up! Chipotle and QDOBA, a Mexican fast-casual restaurant chain, both received shipments from Coast Citrus and have since removed the impacted peppers from their stores, according to the FDA. Meanwhile, shoppers are still avoiding restaurant menu items with lettuce and fresh produce at the grocery stores as they fear an outbreak of cyclosporiasis that has sickened at least 10,000, caused around another 10,000 suspected cases, hospitalized hundreds and led to two deaths, according to the CDC. Sweetgreen has not been linked to the outbreak. The FDA has tied the pestilential plague to iceberg lettuce from a Taylor Farms facility in Mexico. Taco Bell is the only major national restaurant chain to be linked to the outbreak, though it has already recalled the contaminated products and started to see sales bounce back. Many other restaurants have been hit by the dampened demand for lettuce. Chipotle said its sales weakened about 2% around the time of the outbreak in the second half of July. Earlier this week, Salad and Go filed for bankruptcy and announced plans to close all of its locations, saying the cyclospora outbreak "compounded" challenges it was already facing. Cyclospora is a microscopic parasite that is typically transmitted when food or water is contaminated with infected feces. It can cause an intestinal illness called cyclosporiasis, characterized by symptoms like watery diarrhea, loss of appetite, weight loss, stomach cramps or pain, bloating, gas, nausea and fatigue, according to food safety regulators. Some people show no symptoms after becoming infected.

Sweetgreen turnaround plan: 5 strategies to drive restaurant traffic and profitability. Following its Q2 2026 earnings report, Sweetgreen executives outlined how the fast casual chain plans to improve operations, increase transactions, leverage AI personalization and refine its growth strategy. Photo: Sweetgreen August 7, 2026 by Cherryh Cansler - Publisher, FastCasual.com Sweetgreen reported a challenging second quarter for 2026, marked by a 6.2% decline in comparable restaurant sales, a restaurant-level profit margin of 13.1%, and an adjusted EBITDA loss of $0.2 million on $192.7 million in revenue. Beneath the headline financial drag and external headwinds - including a recent regional Cyclospora outbreak tied to iceberg lettuce, an ingredient Sweetgreen does not use - executives said during Thursday's earnings call that they are doubling down on core store execution to get the business back on track. Here is what Sweetgreen executives told investors about how they plan to turn the operator around. The strategy: driving transaction-led growth. Throughout the earnings call, Co-Founder and CEO Jonathan Neman said the brand's recovery hinges directly on driving "transaction-led growth" rather than masking underlying traffic trends with price increases. Instead of relying on technology to fix traffic, Neman framed the company's turnaround around five core operational priorities: operational excellence, food quality and menu innovation, brand relevance, personalized experiences and disciplined, profitable investment. "Outside of the recent events, our results are not where they need to be," Neman said during the call. "However, we know exactly where our opportunities are, ensuring every restaurant is consistently Rush Ready Before Peak during peak periods, increasing top-of-funnel awareness to bring more guests into the brand, and moving with greater speed to capture the margin opportunities we see across the business." Operational discipline takes center stage. While automated kitchen technology remains part of Sweetgreen's long-term mix, executives devoted far more attention to frontline restaurant execution and throughput discipline. Neman emphasized that operational execution takes precedence over tech headlines. "Throughput is our top priority, and we think about it as a flywheel," Neman said. "It starts with strong, stable leadership, which drives staffing, deployment and training decisions that put the right people in the right place at the right time, all in service of being Rush Ready Before Peak." The focus on frontline scorecards and throughput routines yielded immediate operational gains prior to July's industry-wide public health headlines. In high-volume test restaurants with weekly throughput accountability, peak entrees prepared per hour rose from the low 50s in May to the low 60s in June, with top-performing units surpassing 250 entrees an hour on busy days. This operational focus helped sequentially improve comparable transaction trends each month of the quarter, culminating in flat transaction comps in June. Menu innovation, accessible pricing. Menu developments played a crucial supporting role in driving guest frequency and attracting younger diners. The national launch of wraps maintained roughly 20% menu incidence, driving a 500-basis-point improvement in transaction trends and generating a 30-day return rate that outperformed even the brand's signature Harvest Bowl. Addressing initial concerns regarding operational friction at the prep line, Neman pointed out that "customers, most importantly, are loving them," adding that teams managed to iron out early speed-of-service issues and accelerate throughput within four weeks of launch. To build on this momentum, Sweetgreen is also testing a redesigned "Create Your Own" pricing model that incorporates protein into the base price, aiming to eliminate price shock at checkout and clarify value for guests. Real estate strategy: Slow down to speed up. Sweetgreen ended the second quarter with 287 locations, having opened two net new units, including two Infinite Kitchen locations. Under new Chief Development Officer Ryan Slemons, the company is refining its prototype costs, site selection and unit economics before pursuing aggressive unit expansion. When asked by analysts how the company plans to approach new store openings in the coming year, Neman said that development will remain measured while core store performance is rebuilt. He described the current phase as "a slow down to speed up phase," explaining that the chain will continue opening stores at a conservative pace focused strictly on home-run sites while perfecting store economics for eventual reacceleration. Technology as an operational support tool. Technology initiatives served as supporting news to the central operational narrative rather than standalone solutions: AI & loyalty personalization: Sweetgreen is leveraging its digital ecosystem to re-engage lapsed diners. "We recently launched an AI-enabled personalization engine into test in our CRM channel to understand the lift that we can expect from personalization," Neman said. Smart Ordering & Inventory Tools: CFO Jamie McConnell highlighted backend operational enhancements aimed at unlocking 150 basis points of margin efficiency over time, saying that the brand was "testing the enhanced recommended ordering tool in select restaurants" to better align sales forecasts with store inventory needs, reducing waste while protecting portion consistency. About Cherryh Cansler. Cherryh Cansler is Publisher of FastCasual.com and Vice President of Connect Food. She has been covering the restaurant industry since 2012. Her byline has appeared in Forbes, The Kansas City Star and American Fitness magazine, among many others. Connect with Cherryh:

Jalapeños linked to a US salmonella outbreak are tracked to a Mexican farm and a distributor. by: Associated Press Posted: Aug 6, 2026 / 07:49 PM CDT Updated: Aug 6, 2026 / 07:49 PM CDT NEW YORK (AP) - Jalapeño peppers linked to a multistate salmonella outbreak have been traced back to a grower in Sinaloa, Mexico, federal officials say. At least 345 people in 27 states have been reported getting sick from the salmonella strain linked to the jalapeños. Most have been in Minnesota and Colorado. No deaths have been reported, but officials say 36 people have been hospitalized. The Centers for Disease Control and Prevention said Wednesday that the chili peppers were moved into the U.S. by Coast Citrus Distributors. The company has recalled the peppers and is notifying its customers, which include some prominent Mexican food restaurant chains, officials said. Coast Citrus Distributors didn't immediately respond to a Thursday voicemail seeking comment. The Food and Drug Administration said that of the 191 people interviewed in the outbreak investigation, 177 - or 93% - reported eating at a Mexican-style restaurant, including Chipotle Mexican Grill and Qdoba, from June 14 to July 14. Chipotle Mexican Grill said Tuesday that it had removed jalapeños from some of its restaurants. Qdoba on Wednesday said the company had proactively removed jalapenos from all of its restaurants. "Given their actions to remove product from their stores, neither of these establishments are considered a current ongoing risk to consumers in this outbreak," CDC officials said in a statement. Salad chain Sweetgreen said Thursday it also removed jalapeños from its menu, where they are an ingredient in two of its 15 dressings. It was more bad news for Sweetgreen, which also saw sales plummet in July because of customer concerns over the cyclospora outbreak linked to iceberg lettuce. Sweetgreen doesn't serve iceberg lettuce but said Thursday that customers are generally concerned about fresh produce. The FDA is investigating whether any of the jalapeños went to grocery stores. The agency may announce additional actions on its recalls webpage, health officials said. Health officials in Mexico said they opened an investigation and made a field visit Thursday to a packing plant in the northern state of Nuevo Leon. Salmonella bacteria cause about 1.35 million infections in the United States every year, and outbreaks have been tied to sources such as cucumbers, eggs, unpasteurized milk, fresh basil, geckos and pet bearded dragons. Within hours or days of being exposed to the bacteria, infected people can suffer from diarrhea, fever and stomach cramps. The illness usually lasts four to seven days, and most people recover without treatment. Young children, retirement-age adults and people with weakened immune systems are at higher risk for more severe illness, according to the CDC. Shares of Chipotle, based in Newport Beach, California, tumbled nearly 10% on Tuesday and have not recovered. Sweetgreen shares dropped 14% in after-hours trading Thursday. Associated Press reporter Fabiola Sanchez in Mexico City contributed to this story.