0001628280-26-032481
SEC filingSweetgreen posted $125.8M net income in Q1 2026 from $160.6M Spyce gain while operating loss widened to $34.3M on 2.9% revenue drop and 12.8% same-store sales decline.
Revenue declined 2.9% YoY to $161.5M for the thirteen weeks ended March 29, 2026, primarily from a $20.7M drop in Comparable Restaurant Base revenue that produced -12.8% same-store sales change. Traffic fell 11.2% and mix declined 2.3%, only partially offset by 0.7% menu price increases. Incremental revenue from 39 net new openings added $19.2M. Loss from operations widened to $34.3M from $28.5M as restaurant operating costs rose 6.4% to $145.3M and deleveraged across labor, occupancy, and other costs.
Net income reached $125.8M versus a $25.0M loss, driven by the $160.6M pre-tax gain on the Spyce disposal. General and administrative expenses fell 23.7% to $29.3M, aided by lower stock-based compensation.
Sales shifted toward digital channels, lifting Total Digital Revenue Percentage to 67.2% and Owned Digital to 38.9%. In-Store Non-Digital sales declined as a share of total revenue. No discrete segment operating income figures are disclosed.
Management expects approximately 13 net new restaurant openings in fiscal 2026, roughly half incorporating Infinite Kitchen units. Capital expenditures are projected to decline. The company believes existing cash of $156.8M will fund operations, leases, and development for at least the next twelve months.
As of March 29, 2026, Sweetgreen's cash and cash equivalents stood at $156.8 million, a significant increase from $89.2 million at December 28, 2025. This $67.6 million increase was primarily fueled by $100.0 million in cash proceeds from the disposal of the Spyce business. Total assets grew to $912.7 million from $788.1 million, largely due to the addition of an $86.4 million equity investment in Wonder Group, Inc. preferred stock received as partial consideration for the sale. Total stockholders' equity improved markedly to $488.9 million from $356.1 million, driven by net income of $125.8 million for the quarter, which included a $160.6 million pre-tax gain on the Spyce disposal. The accumulated deficit decreased to $883.6 million from $1.0 billion.
The Company has purchase obligations consisting of enforceable agreements to purchase goods or services, with the majority related to restaurant supplies due within the next twelve months. The Notes do not quantify the total value of these commitments. The final milestone related to the Spyce acquisition contingent consideration was achieved and paid during the quarter, extinguishing the $7.0 million liability. Cumulative payments for this contingent consideration reached $30.4 million, with $8.4 million in stock and $22.0 million in cash. The Company also has operating lease commitments, with total operating lease liabilities of $356.1 million ($42.2 million current, $313.9 million non-current).
Capital expenditures for the thirteen weeks ended March 29, 2026, were $12.4 million, down from $16.7 million in the prior-year period, representing 7.7% of revenue. The Company had six facilities under construction expected to open during fiscal year 2026. No share repurchase program or dividends were disclosed. Financing activities used $0.4 million, primarily for shares repurchased for employee tax withholding. The Company did not issue or repay any debt.
The Company operates as one operating and reportable segment, generating revenue from retail sales of food and beverages by company-owned restaurants within the United States. Revenue is disaggregated by channel: Owned Digital Channels ($62.8M), In-Store Non-Digital ($53.0M), and Marketplace Channel ($45.7M). No geographic mix is disclosed at the note level.
Net income was $125.8M, but operating cash flow was negative $17.2M, a significant divergence due to a $161.2M non-cash gain on disposal of business. Excluding that gain, operating cash flow would have been positive. Capex of $12.4M was lower than prior year's $16.7M, indicating reduced investment intensity. Free cash flow (CFO minus capex) was negative $29.6M. The company generated $100M from disposal of business, boosting investing cash flow. Financing activities used $0.4M for share repurchases for tax withholding. Working capital changes consumed cash, notably operating lease liabilities and accounts receivable. Overall, cash generation from operations remains weak, but the disposal provided a significant cash inflow.