Sweetgreen's traffic drops, loss widens and guidance lowered again, sells Spyce business

[Sweetgreen Restaurant]
Trevor Srednick/iStock Editorial via Getty Images

Shares of Sweetgreen (SG [https://seekingalpha.com/symbol/SG]) are expected to open on Friday at an all-time low as the company’s third quarter results [https://seekingalpha.com/news/4517899-sweetgreen-gaap-eps-of-0_31-misses-by-0_13-revenue-of-172_39m-misses-by-5_43m] and FY25 guidance reflected a slowdown in consumer spending and discontinuation of its Sweetpass+ loyalty program, both of which contributed to a double-digit drop in traffic.

“Amid a challenging macro backdrop, our priorities remain clear: delivering operational excellence, accelerating menu innovation, and driving disciplined growth,” said Sweetgreen co-founder and CEO Jonathan Neman.

To facilitate Sweetgreen’s ability to invest in new technologies and “sharpen its focus on growth and profitability,” the company sold its Spyce business – the entity responsible for Sweetgreen’s Infinite Kitchen technology -- to GrubHub parent Wonder for $186.4M.

Sweetgreen acquired Spyce and its Infinite Kitchen technology in 2021 for ~$70M, subsequently designing, developing, and commercializing the Infinite Kitchen automation system, currently in use in 20 Sweetgreen restaurants.

The system automates salad preparation and is capable of completing 500 meals per hour, improving the efficiency of the restaurant as well as addressing rising labor costs.

In connection with the sale, Sweetgreen has put in place a supply and license agreement with Wonder to allow Sweetgreen to continue to deploy Infinite Kitchens across its restaurants, while the $100M in cash Sweetgreen will receive from Wonder will allow it to further its automation efforts and focus on its core business.

In addition to cash, Sweetgreen will also receive preferred shares in Wonder with an implied value of $86.4M.

The Spyce sale and cash infusion comes as Sweetgreen sees a sharp deceleration in same-store sales (-9.5%) compared to an increase of 5.6% in the same quarter last year. This contributed to a 0.6% drop in sales to a below-consensus $172.4M and wider-than-expected loss of $0.31 per share.

For FY25, the company updated its outlook to incorporate a decline in traffic with same store sales now expected to contract by 7.7% to 8.5% from the previous outlook for a decline in 4% to 6%.

Revenue is now expected to be between $682M to $688M from an earlier range of $700M to $715M, with the new range below the $698.3M consensus. Additionally, restaurant-level profit margin is now seen between 14.5% and 15% from 17.5%, previously, and an adjusted EBITDA loss between $10M and $13M versus a profit of $10M to $15M.

Sweetgreen shares are down close to 20% into the open.

MORE ON SWEETGREEN

* Sweetgreen, Inc. (SG) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4839971-sweetgreen-inc-sg-q3-2025-earnings-call-transcript]
* Sweetgreen: Limited Visibility To A Turnaround [https://seekingalpha.com/article/4825530-sweetgreen-limited-visibility-to-a-turnaround]
* Sweetgreen: Headwinds Galore [https://seekingalpha.com/article/4817501-sweetgreen-headwinds-galore]
* Sweetgreen outlines 2026 slowdown to 15–20 net unit growth following $186.4M Spyce sale and new operational focus [https://seekingalpha.com/news/4518231-sweetgreen-outlines-2026-slowdown-to-15-20-net-unit-growth-following-186_4m-spyce-sale-and]
* Sweetgreen GAAP EPS of -$0.31 misses by $0.13, revenue of $172.39M misses by $5.43M [https://seekingalpha.com/news/4517899-sweetgreen-gaap-eps-of-0_31-misses-by-0_13-revenue-of-172_39m-misses-by-5_43m]