Sweetgreen profit margin in Q2
Short Answer
Both the model and the market expect Sweetgreen's Q2 2026 profit margin to be above 8%, with no compelling evidence of mispricing. This aligns with the need for improved performance from Q1's 10.0% to meet full-year guidance, supported by anticipated sales growth and favorable cost impacts.
1. Executive Verdict
- Sweetgreen's Q1 2026 restaurant-level profit margin was 10.0%.
- Full-year 2026 profit margin guidance stands at 14.2% to 14.7%.
- Q2-Q4 performance must improve to meet full-year 2026 targets.
- New menu items, particularly wraps, are expected to boost sales.
- Wrap rollout may also lead to favorable cost of goods sold impacts.
- Management did not issue specific Q2 2026 profit margin guidance.
Who Wins and Why
| Outcome | Market | Model | Why |
|---|---|---|---|
| Above 16% | 27.0% | 20.8% | This level significantly exceeds the full-year guidance range of 14.2% to 14.7%. |
| Above 10% | 98.0% | 97.6% | Sweetgreen's Q1 restaurant-level profit margin was 10.0%, providing a strong baseline. |
| Above 14% | 79.0% | 80.5% | This aligns with full-year guidance, supported by favorable cost of goods sold from new menu items. |
| Above 8% | 97.0% | 97.6% | Sweetgreen's Q1 restaurant-level profit margin was 10.0%, providing a higher baseline for performance. |
| Above 12% | 90.0% | 90.7% | This represents a plausible recovery from Q1's 10.0%, supported by anticipated sales improvements and favorable COGS. |
Current Context
Q1 2026 performance was weaker, with Q2 improvement expected. Sweetgreen reported a Restaurant-Level Profit Margin of 10.0% in Q1 2026, a decrease from 17.9% in the prior year period [^][^]. This followed a 12.8% same-store sales decline in Q1 2026 [^]. Management anticipated an improvement in Q2 2026 same-store sales to approximately -4%, attributing this to the launch of new menu items such as wraps [^].
2. Market Behavior & Price Dynamics
Historical Price (Probability)
Outcome probability
Date
This market has been stable, trading in a narrow 200-basis-point range between 95.0% and 97.0%. The contract opened at 95.0% and moved to its current price of 97.0% early in the trading period. Since then, the price has remained flat. The context provides no specific corporate news or financial data release to explain this minor price adjustment. The Q2 2026 reporting period has not yet concluded.
Trading volume is exceptionally low, with only one contract traded in total. This indicates minimal market participation and liquidity. The price movement from 95.0% to 97.0% likely occurred on this very thin volume, which reduces its significance as a strong market signal. The 95.0% price level has served as a floor, while 97.0% has acted as a ceiling.
The consistently high probability suggests that market participants, though few, hold a strong and unchanging expectation for the contract's resolution. The lack of price volatility or meaningful volume implies a static consensus with no new information being priced in.
3. Market Data
Contract Snapshot
This contract resolves YES if Sweetgreen Inc. reports a restaurant-level profit margin above 15% for Q2 2026, verified by Fiscal.ai; it resolves NO if the reported margin is 15% or less. The market opened on May 28, 2026, and will close upon the outcome's occurrence or by September 5, 2026, at 4:00 pm EDT, with projected payout 30 minutes after closing. Insider trading is prohibited for those with material non-public information or employed by source agencies.
Available Contracts
Market options and current pricing
| Outcome bucket | Yes (price) | No (price) | Last trade probability |
|---|---|---|---|
| Above 10% | $0.99 | $0.08 | 98% |
| Above 8% | $0.99 | $0.04 | 97% |
| Above 12% | $0.94 | $0.13 | 90% |
| Above 14% | $0.77 | $0.28 | 79% |
| Above 15% | $0.50 | $0.57 | 50% |
| Above 16% | $0.31 | $0.76 | 27% |
| Above 18% | $0.08 | $0.97 | 7% |
| Above 20% | $0.06 | $1.00 | 3% |
Market Discussion
As of June 25, 2026, Sweetgreen has not yet announced its Q2 2026 financial results, with the earnings release estimated for August 6, 2026 [^][^][^]. In Q1 2026, the company reported a Restaurant-Level Profit Margin of 10.0%, a decrease from 17.9% in the prior year period [^][^][^]. Despite the Q1 results, Sweetgreen's stock has surged due to optimism regarding its turnaround, and prediction markets currently estimate a 78% probability that the Q2 2026 restaurant-level profit margin will exceed 14% [^][^].
4. How will Sweetgreen's new menu initiatives, particularly the wrap rollout, impact same-store sales and cost of goods in Q2 2026?
| Full-year same-store sales decline guidance | -4% to -2% [^][^][^] |
|---|---|
| FY26 Restaurant-level profit margin guidance | 14.2% to 14.7% [^][^][^] |
| Q1 2026 Same-store sales decline | -12.8% [^][^] |
Sweetgreen's wrap rollout aims to boost sales and improve costs. The introduction of new wraps is anticipated to drive incremental transactions, potentially mitigating the projected full-year same-store sales declines of -4% to -2% [^][^][^]. These wraps are also reportedly contributing to favorable cost of goods sold (COGS) impacts, primarily due to reduced preparation requirements and lower waste compared to traditional bowl and salad menu items [^][^][^].
Sweetgreen's Q1 sales declined, but April showed some recovery. The company reported a -12.8% same-store sales decline in Q1 2026, though comparable sales declines moderated to approximately -8% in April [^][^]. Sweetgreen's restaurant-level profit margin guidance for fiscal year 2026 is set between 14.2% and 14.7% [^][^][^]. This guidance falls below the 15% threshold commonly observed in Q2 prediction markets [^][^][^].
5. What did Sweetgreen management signal about Q2 2026 expectations during their Q1 2026 earnings call?
| Full-Year 2026 Restaurant Profit Margin Outlook | 14.2% to 14.7% [^][^][^][^] |
|---|---|
| Q2 2026 Labor Costs | Low 29% range [^] |
| Q2 2026 Same-Store Sales | Negative 4% [^][^][^] |
Sweetgreen did not provide specific Q2 2026 profit margin guidance. During its Q1 2026 earnings call, management reiterated its full-year 2026 outlook for restaurant-level profit margin, which remains in the range of 14.2% to 14.7% [^][^][^][^]. For Q2, cost component insights included expectations for food, beverage, and packaging costs to stay in line with Q1 levels, and labor costs were anticipated to be in the low 29% range [^].
Management outlined expected Q2 2026 same-store sales and planned initiatives. While specific profit margin guidance for Q2 was not given, Sweetgreen management discussed other Q2 trends. They projected same-store sales to land around negative 4% [^][^][^]. Additionally, the company plans to introduce loyalty program enhancements and a rearchitected pricing ladder later in the second quarter [^][^][^].
6. How did Sweetgreen's Q1 2026 profit margin and same-store sales compare to key fast-casual competitors like Chipotle (CMG) and CAVA Group (CAVA)?
| Sweetgreen Q1 2026 Restaurant-Level Profit Margin | 10.0% [^][^] |
|---|---|
| Sweetgreen Q1 2026 Same-Store Sales Change | -12.8% [^][^] |
| Sweetgreen FY26 Restaurant-Level Profit Margin Guidance | 14.2% to 14.7% [^][^] |
Sweetgreen faced a challenging first quarter of 2026 with declining sales and low margins. The company reported a restaurant-level profit margin of 10.0% and experienced a negative same-store sales change of 12.8% during this period [^][^]. This performance suggests a difficult quarter for Sweetgreen, particularly when compared to its fast-casual counterparts.
Sweetgreen's Q1 2026 performance trailed key fast-casual competitors significantly. In comparison, Chipotle Mexican Grill reported a 0.5% increase in comparable restaurant sales and an adjusted restaurant-level operating margin of 23.7% [^][^][^]. Similarly, CAVA Group achieved a 9.7% increase in same-restaurant sales and a restaurant-level profit margin of 25.1% in the same quarter [^][^][^]. Sweetgreen's profit margin was substantially below both Chipotle's and CAVA Group's, while its sales declined as competitors experienced growth [^][^][^][^][^][^][^][^].
Sweetgreen anticipates profit margin improvements, yet still lags competitors. For the full fiscal year 2026, Sweetgreen has provided guidance anticipating a restaurant-level profit margin in the range of 14.2% to 14.7% [^][^]. While this guidance suggests an expected improvement in profitability compared to its first-quarter performance, the projected margins indicate Sweetgreen will still operate with a lower profit margin relative to its top competitors in the fast-casual segment.
7. Given its Q1 2026 performance, what margin run-rate does Sweetgreen need in Q2-Q4 to meet its full-year 2026 guidance of 14.2% to 14.7%?
| Q1 2026 Restaurant-Level Profit Margin | 10.0% [^][^][^] |
|---|---|
| Full-Year 2026 Restaurant-Level Profit Margin Guidance | 14.2% to 14.7% [^][^][^] |
| Q2-Q4 2026 Margin Run-Rate Calculation | Cannot be precisely determined without quarterly revenue guidance [^][^][^] |
Calculating the precise Q2-Q4 margin run-rate is currently impossible. To determine the specific margin run-rate Sweetgreen needs for Q2-Q4 2026 to achieve its annual targets, a weighted average formula must be applied [^][^][^]. This calculation requires considering the Q1 margin and its associated revenue, as well as the anticipated margins and revenues for the subsequent quarters [^][^][^]. However, Sweetgreen has not provided specific quarterly revenue guidance for 2026, which is necessary for accurate revenue weighting in the formula, making it impossible to precisely calculate the required margin run-rate for the remaining quarters without making revenue assumptions [^][^][^].
8. What is the Wall Street analyst consensus for Sweetgreen's Q2 2026 restaurant-level profit margin?
| Fiscal Year 2026 Restaurant-Level Profit Margin Guidance | 14.2% to 14.7% [^][^][^] |
|---|---|
| Q2 2026 Revenue Estimate | ~$194.4 million [^][^][^][^] |
| Q2 2026 EPS Estimate | ~-$0.13 [^][^][^][^] |
Sweetgreen has not issued specific Q2 2026 profit margin guidance. The company has not provided an explicit restaurant-level profit margin forecast for the second quarter of 2026. However, Sweetgreen did announce a broader fiscal year 2026 guidance, projecting a restaurant-level profit margin between 14.2% and 14.7% [^][^][^].
Analysts project a Q2 2026 recovery for Sweetgreen's performance. Wall Street analyst consensus for Sweetgreen's second quarter of 2026 primarily centers on a revenue estimate of approximately $194.4 million and an earnings per share (EPS) estimate of around -$0.13 [^][^][^][^]. Following a Q1 2026 restaurant-level margin of 10.0%, analysts anticipate an improvement in traffic trends for Q2 [^][^][^][^].
9. What Could Change the Odds
Key Catalysts
Sweetgreen's Q1 2026 restaurant-level profit margin was 10.0%, a decline from 17.9% in the same period of 2025. This decline was attributed to a 12.8% decrease in same-store sales and higher ingredient and promotional costs [^][^][^][^][^]. Sweetgreen's Q2 2026 financial results are expected around August 6, 2026 [^][^]. Prediction markets on Coinbase are tracking Sweetgreen's Q2 2026 restaurant-level profit margin, with specific contracts for thresholds above 14%, 15%, and 16% expiring on September 5, 2026 [^].
Guidance for fiscal year 2026 includes a target restaurant-level profit margin of 14.2% to 14.7% and a same-store sales change of -4.0% to -2.0% [^] [^] . Key turnaround catalysts for 2026 include the stabilization of same-store sales, the performance of the Infinite Kitchen automation, and the profitability of new restaurant openings [^][^].
Key Dates & Catalysts
- Expiration: September 05, 2026
- Closes: September 05, 2026
10. Decision-Flipping Events
- Trigger: Sweetgreen's Q1 2026 restaurant-level profit margin was 10.0%, a decline from 17.9% in the same period of 2025.
- Trigger: This decline was attributed to a 12.8% decrease in same-store sales and higher ingredient and promotional costs [^] [^] [^] [^] [^] .
- Trigger: Sweetgreen's Q2 2026 financial results are expected around August 6, 2026 [^] [^] .
- Trigger: Prediction markets on Coinbase are tracking Sweetgreen's Q2 2026 restaurant-level profit margin, with specific contracts for thresholds above 14%, 15%, and 16% expiring on September 5, 2026 [^] .
12. Historical Resolutions
No historical resolution data available for this series.
