Shares of Sweetgreen (SG 3.33%) remain suppressed and near 52-week lows as the fast-casual salad restaurant attempts to recover with a renewed focus on protein. As it competes for your lunchtime dollars with competitors like Chipotle Mexican Grill, both chains are introducing new protein-rich meals, inspired by the latest trends in diet and wellness.
The protein fad sweeps the nation
Is America's obsession with getting enough protein enough to make the Sweetgreen stock a buy? The evidence isn't so convincing.
Image source: Getty Images.
Sweetgreen's most recent third-quarter earnings didn't exactly satiate investors. Same-store sales declined 9.5%, and total revenue decreased by 0.6%.
The health-oriented restaurant chain was once the darling of the metropolitan office worker. The company went public in 2021, but has faced significant challenges as workers increasingly demand hybrid and remote work arrangements over traditional full-time office jobs. Foot traffic is down nearly 12%, as reported in its most recent quarterly report.
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The end of the "slop" era?
The fast-casual bowl has also lost its trendy edge. The nickname "slop bowls" has become a derogatory term for the food served by Chipotle, Cava Group, and Sweetgreen at premium prices. Sweetgreen was progressive in its attempt to fully automate the customer experience, but it has yet to find a way to make its business model profitable.
Also of note, it was announced on Dec. 17 that Chief Brand Officer Nathaniel Ru is retiring after 20 years of building Sweetgreen. There's simply not enough evidence that the nation's love for protein is enough to power Sweetgreen back into the good graces of shareholders. More than product innovation, it's going to take Americans re-embracing fast-casual lunches and working in the office to save Sweetgreen.