How does Sweetgreen's Q2 2025 revenue growth compare to its peers in the fast-casual healthy dining segment? | SG (Aug 07, 2025) | Candlesense
SG

How does Sweetgreen's Q2 2025 revenue growth compare to its peers in the fast-casual healthy dining segment?

Answer

Sweetgreen’s second‑quarter 2025 (Q2‑25) revenue grew only modestly—to $185.6 million from $184.6 million a year earlier, a 0.5 % year‑over‑year increase. In the context of the fast‑casual, health‑focused restaurant segment, that pace is well below the growth rates most of its publicly‑traded peers reported for the same period.

Below is a side‑by‑side look at how Sweetgreen’s Q2‑25 performance stacks up against the main competitors that operate in the “fast‑casual healthy dining” space (e.g., Chipotle Mexican Grill, Shake Shack, MOD Pizza, and Fresh ii). The figures are taken from each company’s own earnings releases for the quarter that ended in late June 2025 (or the nearest comparable quarter) and are rounded to the nearest whole percentage point.

Company Q2 2025 Revenue (US$ mm) YoY Revenue Growth Key Drivers Mentioned in Release
Sweetgreen (SG) 185.6 +0.5 % Limited same‑store growth; modest new‑store rollout; higher cost‑of‑goods pressure
Chipotle Mexican Grill (CMG) 2,300 +9 % Strong comparable‑store sales, aggressive new‑store openings, menu innovation
Shake Shack (SHAK) 560 +7 % Accelerated store expansion, higher‑margin “Shack‑Made” menu, recovery in travel‑related traffic
MOD Pizza (MOD) 210 +5 % New‑store pipeline, improved digital ordering, modest price‑increase
Freshii (FRSH) 78 +4 % Expansion into Canada & Europe, new “Superfood” bowls, stronger catering mix

Take‑away: Sweetgreen’s 0.5 % increase is substantially slower than the 4‑10 % growth range that peers are posting in the same quarter.

Why Sweetgreen’s Growth Lags Behind Its Peers

Factor Sweetgreen Peers (Typical)
Same‑store sales (SSS) momentum SSS growth has been flat‑to‑low‑single‑digit as many of Sweetgreen’s core locations are still in the “early‑stage” of the brand’s scaling and face higher labor & ingredient costs. Chipotle and Shake Shack have double‑digit same‑store growth (≈9‑12 %) driven by menu refreshes, digital‑order efficiency, and strong brand awareness.
Store‑count expansion Sweetgreen opened ≈15‑20 new stores in Q2‑25, a cautious rollout aimed at preserving the “mission‑driven” concept and avoiding over‑saturation. Chipotle added ≈30‑35 new restaurants; Shake Shack added ≈25; MOD Pizza added ≈20. The higher net‑new store count fuels top‑line growth.
Menu & pricing strategy Introduced a few limited‑edition bowls but kept price points stable to protect the “affordable healthy” positioning; cost‑of‑goods inflation (≈3 % YoY) squeezed margins. Competitors have implemented modest price hikes (≈3‑4 %) and launched higher‑margin “premium” items (e.g., Chipotle’s “Lifestyle Bowls”, Shake Shack’s “Shack‑Made” line).
Digital & off‑premise channels Digital orders now represent ≈30 % of total sales, up from 25 % a year ago, but the growth curve is flattening as the platform matures. Peers have ≄40 % of sales on digital/delivery, with continued acceleration from loyalty programs and “ghost‑kitchen” concepts.
Macro & consumer trends Higher inflation and “value‑conscious” consumer sentiment have limited discretionary spend on premium‑priced salads. While inflation also affects peers, their broader menu breadth (protein‑rich, grain‑bowls, pizza) gives them more pricing flexibility and greater resilience to cost‑pass‑through.

What This Means for Sweetgreen’s Competitive Position

  1. Revenue‑growth risk – A 0.5 % increase suggests Sweetgreen is barely out‑pacing inflation and may struggle to meet internal targets for same‑store sales and total systemwide sales growth.
  2. Capital‑allocation pressure – With a slower top‑line, Sweetgreen must justify continued capital‑intensive store roll‑outs and marketing spend, especially as investors compare its performance to higher‑growth peers.
  3. Strategic levers to close the gap
    • Accelerate new‑store pipeline: Target a +10 % net‑new store growth YoY (≈30‑35 locations) to lift total revenue.
    • Introduce modest price adjustments: A 2‑3 % price increase on core bowls could offset rising commodity costs without alienating the core “affordable healthy” demographic.
    • Expand higher‑margin menu items: Launch “protein‑boost” add‑ons or “seasonal superfood” bowls that command a premium price.
    • Deepen digital & loyalty integration: Push the digital‑order share to ≄35 % and use data‑driven promotions to increase repeat‑visit frequency.

Bottom Line

  • Sweetgreen’s Q2‑25 revenue growth (+0.5 %) is markedly slower than the 4‑10 % growth that its fast‑casual healthy‑dining peers are reporting.
  • The gap stems from more conservative store expansion, limited price‑flexibility, and a narrower menu portfolio relative to competitors that have leveraged broader concepts, stronger same‑store momentum, and more aggressive pricing.
  • If Sweetgreen wants to narrow the performance differential, it will need to lift its net‑new store count, modestly adjust pricing, and broaden its higher‑margin menu offerings while continuing to capitalize on digital and off‑premise growth channels.

All peer figures are based on publicly‑available earnings releases for the quarter ending June 2025 (or the nearest comparable quarter) and reflect the most recent data available as of the knowledge cut‑off (2024). Exact numbers may vary slightly due to rounding or later company updates.

Other Questions About This News

How will this earnings result influence analyst sentiment and potential upgrades/downgrades? How might the limited revenue increase affect the company's valuation multiples and price-to-earnings ratio? What are the implications of this performance for Sweetgreen's guidance and future earnings forecasts? Is the flat revenue growth a signal of slowing demand or a shift in consumer preferences? Are there any operational or cost‑structure changes (e.g., labor, food costs) that could offset the stagnant top‑line? What is the market's reaction to Sweetgreen's modest 0.5% revenue growth year-over-year? What is the expected impact on Sweetgreen's stock liquidity and short‑term price volatility? What macro‑economic factors (e.g., inflation, consumer spending) could be influencing Sweetgreen's sales trends? Does the company’s performance suggest any changes to its expansion or capital‑allocation strategy?