Shares of Sweetgreen (NYSE:SG) saw a rebound on Friday following the identification of the source of a concerning illness spreading quickly in the United States.
Sweetgreen’s stock had previously dropped about 25% due to worries over the Cyclospora parasite, which has affected thousands. Concerns arose that customers might shy away from dining at Sweetgreen because they could associate their salads with potential contamination.
However, fears began to subside when the CDC advised individuals in five states to avoid shredded iceberg lettuce from Taco Bell restaurants. This warning came after the FDA traced the outbreak back to a supplier linked to Taco Bell.
A Welcome Relief
While shareholders might be feeling relieved now, it’s worth noting that Sweetgreen was already struggling prior to this outbreak. For instance, the fast-casual chain’s first quarter sales were down 12.8%, attributed largely to an 11.2% reduction in customer visits. Rising utility prices are also pressuring family budgets, making it challenging for many to eat out.
Investors will likely be looking for insights on how the company plans to boost sales, especially in this tough economic climate, during Sweetgreen’s upcoming second quarter earnings release on August 6.
Should You Buy Sweetgreen Stock Now?
If you’re considering investing in Sweetgreen stock, there are a few things to keep in mind:
Some analysts have pointed out other stocks that may be better positioned for growth in the near future. Sweetgreen did not make the list of the top 10 stocks recommended for solid long-term growth potential.
Investors might want to think carefully before making any decisions regarding Sweetgreen, especially given its current challenges and market conditions.
