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What changed in Sweetgreen, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Sweetgreen, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+645 added−880 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-27)

Top changes in Sweetgreen, Inc.'s 2025 10-K

645 paragraphs added · 880 removed · 495 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeSuch obligations may include, without limitation, the Federal Trade Commission Act, the Telephone Consumer Protection Act of 1991, the Children’s Online Privacy Protection Act of 1998, the Controlling the Assault of Non-Solicited Pornography And Marketing Act of 2003, the California Consumer 12 Table of Contents Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (“CPRA”), (collectively, “CCPA”), consumer health data privacy laws such as Washington state’s My Health My Data Act, the Canadian Personal Information Protection and Electronic Documents Act, Canada’s Anti-Spam Legislation, the European Union’s General Data Protection Regulation 2016/679 (“EU GDPR”) and the EU GDPR as it forms part of United Kingdom (“UK”) law by virtue of section 3 of the European Union (Withdrawal) Act 2018 (“UK GDPR”) (collectively, “GDPR”), and the Payment Card Industry Data Security Standard (“PCI DSS”).
Biggest changeSuch obligations may include, without limitation, the Federal Trade Commission Act, the Telephone Consumer Protection Act of 1991, the Children’s Online Privacy Protection Act of 1998, the Controlling the Assault of Non-Solicited Pornography And Marketing Act of 2003, the California Consumer (“CCPA”), and consumer health data privacy laws such as Washington state’s My Health My Data Act, and the Payment Card Industry Data Security Standard (“PCI DSS”).
Also, the CCPA provides for civil penalties and a private right of action for data breaches which may include an award of statutory damages.
The CCPA also provides for civil penalties and a private right of action for data breaches which may include an award of statutory damages.
Domestically, we registered our core marks (“Sweetgreen,” “SG,” and the Sweetgreen logo) and certain other marks, such as “SG Outpost,” “Sweetgreen Outpost,” and “SweetPass.” Internationally, we currently have registered our core Sweetgreen mark, along with selected other marks, in foreign jurisdictions including Argentina, Australia, Canada, China, the European Union, Hong Kong, Japan, Mexico, South Korea, and the United Kingdom.
Domestically, we registered our core marks (“Sweetgreen,” “SG,” and the Sweetgreen logo) and certain other marks, such as “SG Outpost,” “Sweetgreen Outpost,” and “SweetPass.” Internationally, we currently have registered our core “Sweetgreen” mark, along with selected other marks, in foreign jurisdictions including Argentina, Australia, Canada, China, the European Union, Hong Kong, Japan, Mexico, South Korea, and the United Kingdom.
Additionally, we face the risk that new or existing competitors will copy, and potentially improve upon, our business model, menu options, technology, presentation, or ambience, among other things. Trademarks and Other Intellectual Property We protect our intellectual property primarily through a combination of trademarks, domain names, copyrights, patents, and trade secrets.
Additionally, we face the risk that new or existing competitors will copy, and potentially improve upon, our business model, menu options, technology, presentation, or ambience, among other things. Trademarks and Other Intellectual Property We protect our intellectual property primarily through a combination of trademarks, domain names, copyrights, and trade secrets.
Most of our marks are registered in multiple international trademark classes, including for restaurant services and related goods and services. We are currently pursuing additional trademark and trade dress registrations in the United States and abroad and will continue to pursue additional trademark registrations to the extent we believe they would be beneficial and cost-effective .
Most of our marks are registered in multiple international trademark classes, including for restaurant services and related goods and services. We are currently pursuing additional trademark and trade dress registrations in the United States and will continue to pursue additional trademark registrations to the extent we believe they would be beneficial and cost-effective .
These lawsuits and investigations require significant resources from our senior management and can result in material fines, penalties, and/or settlements, some or all of which may not be covered by insurance, as well as significant remediation efforts that may be costly and time consuming, and which we may not implement effectively.
These lawsuits and investigations often require significant resources from our senior management and can result in material fines, penalties, and/or settlements, some or all of which may not be covered by insurance, as well as significant remediation efforts that may be costly and time consuming, and which we may not implement effectively.
The information on our website (or any webpages referenced in this Annual Report on Form 10-K) is not part of this or any other report Sweetgreen files with, or furnishes to, the SEC. 13 Table of Contents
The information on our website (or any webpages referenced in this Annual Report on Form 10-K) is not part of this or any other report Sweetgreen files with, or furnishes to, the SEC. 11 Table of Contents
For example, the CCPA imposes obligations on covered businesses to provide specific disclosures related to a business’s collection, use, and disclosure of personal information and to respond to certain requests from California residents related to their personal information (for example, requests to know of the business’s personal information processing activities, to delete the individual’s personal data, and to opt out of certain personal information disclosures).
For example, the CCPA imposes obligations on covered businesses to provide specific disclosures related to a business’s collection, use, and disclosure of personal information and to respond to certain requests from California residents related to their personal information (for example, requests to know of the business’s personal information processing activities, to delete the individual’s 10 Table of Contents personal data, and to opt out of certain personal information disclosures).
We have obtained a registration of the Sweetgreen.com domain name as well. 11 Table of Contents We have procedures in place to monitor for potential infringement of our most important intellectual property, and it is our policy to take appropriate action to enforce our intellectual property, taking into account the strength of our claim, likelihood of success, cost, and overall business priorities.
We have obtained a registration of the Sweetgreen.com domain name as well. We have procedures in place to monitor for potential infringement of our most important intellectual property, and it is our policy to take appropriate action to enforce our intellectual property rights, taking into account the strength of our claim, likelihood of success, cost, and overall business priorities.
As part of our CFSP, we have a set of “sweet clean standards” in each of our restaurants, which are guides for operators to ensure our approach to food safety is consistent and scalable across our restaurant fleet.
As part of our CFSP, we have a set of “sweet clean standards” for our restaurants, which are guides for operators to ensure our approach to food safety and cleanliness is consistent and scalable across our restaurant fleet.
See the section titled “Risk Factors—Risks Related to Our Intellectual Property and Information Technology” for additional information about the laws and regulations to which we may become subject and about the risks to our business associated with such laws and regulations. Corporate Information We were founded in November 2006 and incorporated in October 2009 in Delaware.
See the section titled “Risk Factors—Risks Related to Our Information Technology and Intellectual Property” for additional information about the laws and regulations to which we may become subject and about the risks to our business associated with such laws and regulations. Corporate Information We were founded in November 2006 and incorporated in October 2009 in Delaware.
Below are select examples of the ways we give back to our local communities. • Donating Healthy Meals: During each new restaurant opening, we distribute fresh Sweetgreen meals to local charities such as food pantries and soup kitchens to help alleviate food insecurity in the community.
Below are select examples of the ways we give back to our local communities. • Donating Healthy Meals: During each new restaurant opening, we distribute fresh Sweetgreen meals to local charities, including food banks, pantries, and soup kitchens, to help alleviate food insecurity in the community.
Several states within the United States have enacted or proposed data privacy and security laws. For example, Virginia, Colorado, Connecticut, and Utah have passed comprehensive data privacy and security laws.
Numerous other states within the United States have enacted or proposed data privacy and security laws. For example, Virginia, Colorado, Connecticut, Utah, and other states have passed comprehensive data privacy and security laws.
We may experience material difficulties or failures in obtaining the necessary licenses, approvals or permits for our restaurants, which could delay planned restaurant openings or affect the operations at our existing restaurants.
We may experience material difficulties or failures in obtaining the necessary licenses, approvals or permits for our restaurants, which could delay planned restaurant openings or affect the operations at our 9 Table of Contents existing restaurants.
The CCPA and GDPR are examples of the increasingly stringent and evolving regulatory frameworks related to personal information processing that may increase our compliance obligations and exposure for any noncompliance.
The CCPA and other regulatory frameworks described above are examples of the increasingly stringent and evolving regulatory frameworks related to personal information processing that may increase our compliance obligations and exposure for any noncompliance.
Many of our competitors have existed longer and have a more established market presence with substantially greater financial, marketing, personnel, and other resources than we do, and as a result, these competitors may be better positioned to succeed in the highly competitive restaurant industry.
Many of our competitors have operated longer and have a more established market presence with substantially greater financial, marketing, personnel, and other resources than we do, and therefore may be better positioned to succeed in the highly competitive restaurant industry.
Competition from food aggregators and food delivery marketplaces has also increased in recent years, particularly with the significant increase in restaurants that previously focused on dine-in service and have increased their reliance on take-out or delivery during and since the COVID-19 pandemic, and competition is expected to continue to increase.
Competition from food aggregators and food delivery marketplaces has also increased in recent year s, particularly with the significant increase in restaurants that previously focused on dine-in service and have increased their reliance on take-out or delivery, and competition is expected to continue to increase.
We also follow a Comprehensive Food Safety Plan (“CFSP”), which includes our Approved Supplier Program, Hazard Analysis and Critical Control Points Program, guidelines for restaurant design, construction and maintenance, new product commercialization processes, and crisis management.
After onboarding, we work with our suppliers to ensure they adhere to our product quality specifications. We also follow a Comprehensive Food Safety Plan (“CFSP”), which includes our Approved Supplier Program, Hazard Analysis and Critical Control Points Program, guidelines for restaurant design, construction and maintenance, new product commercialization processes, and crisis management.
Historically, our revenue has been lower in the first and fourth fiscal quarters of the year due, in part, to the holiday season and the fact that fewer people eat out during periods of inclement weather (generally the winter months, though inclement weather conditions may occur in certain markets at any time of the year) than during periods of mild to warm weather (the spring, summer, and fall months).
Historically, our revenue has been lower in the first and fourth fiscal quarters of the year due, in part, to the holiday season and inclement weather (generally the winter months, though inclement weather conditions may occur in certain markets at any time of the year).
Data Privacy and Security In the ordinary course of our business, we may process personal or other sensitive, proprietary, and confidential information. Accordingly, we are or may become subject to numerous data privacy and security obligations, including federal, state, local, and foreign laws, regulations, guidance, and industry standards related to data privacy and security.
Accordingly, we are or may become subject to numerous data privacy and security obligations, including federal, state, local, and foreign laws, regulations, guidance, and industry standards related to data privacy and security.
ITEM 1. BUSINESS Our Mission To Build Healthier Communities by Connecting People to Real Food Overview Sweetgreen, Inc., a Delaware corporation (together with its subsidiaries, “Sweetgreen,” “we,”, “us,” or the “Company”) is a mission-driven, next generation restaurant and lifestyle brand that serves healthy food at scale.
ITEM 1. BUSINESS General Sweetgreen, Inc., a Delaware corporation (together with its subsidiaries, “Sweetgreen,” “we,”, “us,” or the “Company”) is a mission-driven, next generation restaurant and lifestyle brand that serves healthy food at scale. Our bold vision is to be as ubiquitous as traditional fast food, but with the transparency and quality that consumers increasingly expect.
Our Impact Our mission to build healthier communities by connecting people to real food extends to positively impacting the lives of our customers, team members, and citizens of the communities we serve.
We periodically seek feedback from employees through confidential engagement surveys and use these insights to inform actions and improvements across our restaurants and Sweetgreen Support Center. Our Impact Our mission to build healthier communities by connecting people to real food extends to positively impacting the lives of our customers, team members, and citizens of the communities we serve.
Foreign data privacy and security laws (including but not limited to the GDPR) impose significant and complex compliance obligations on entities that are subject to those laws.
Additionally, although we do not currently have international operations that would subject us to foreign data privacy and security laws (including but not limited to the European Union’s General Data Protection Regulation), such laws impose significant and complex compliance obligations on entities that are subject to them.
We also use our website as a tool to disclose important information about the company and comply with our disclosure obligations under Regulation Fair Disclosure. Our corporate governance guidelines, code of business conduct and ethics and Board committee charters are also posted on the Investor Relations section of the Sweetgreen website.
Our corporate governance guidelines, code of business conduct and ethics and our board of directors (“ Board”) committee charters are also posted on the Investor Relations section of the Sweetgreen website.
We pay competitive wages and believe we offer many best-in-class benefits relative to the industry, including medical, dental, and vision insurance for eligible employees and their spouses or domestic partners, paid time off, paid parental leave, and equity incentives for our Head Coaches.
Our benefits for eligible employees include medical, dental, and vision insurance, paid time off, paid parental leave, and equity incentives for our Head Coaches (our restaurant general managers). We regularly review our compensation and benefits programs to remain competitive within the industry.
Our national supply chain is organized into regional distribution networks. We seek to align retail proximity with cultivation, and to leverage existing relationships as we enter new markets in that region. Quality Control and Food Safety At Sweetgreen, we refer to food safety as our “license to operate,” and that starts with our food supply.
As we enter new markets, we seek to leverage existing relationships while maintaining these standards. Quality Control and Food Safety At Sweetgreen, we refer to food safety as our “license to operate,” and that starts with our food supply. We require our suppliers to provide appropriate food safety certifications as part of the onboarding process.
In addition, a core part of our menu, salads, has proven to be more popular among consumers in the warmer months.
In addition, a core part of our menu, salads, has proven to be more popular among consumers in the warmer months . In recent years, the prevalence of hybrid and remote work arrangements have made seasonality in our business less predictable, and we have experienced negative revenue impacts around national holidays.
In particular, we face increasing competition from delivery kitchens, food aggregators, and food delivery marketplaces (such as DoorDash, GrubHub, Uber Eats, ezCater, Sharebite, and others ), grocery stores (particularly those that focus on freshly prepared and organic food), and other companies that are enabling the delivery of food to customers, including delivery marketplaces that we partner with to deliver Sweetgreen food to customers.
We compete with delivery kitchens, food aggregators, and third-party delivery marketplaces such as DoorDash, Grubhub, and Uber Eats, as well as grocery stores that focus on freshly prepared or organic foods. The delivery marketplaces, including those we partner with, retain customer data for Sweetgreen orders and may use that information to promote other restaurants.
These segments are highly competitive with respect to, among other things, taste, price, food quality and presentation, service, location, and the ambience and condition of each restaurant. Our competition includes a variety of locally owned restaurants and national and regional chains offering dine-in, carry-out, delivery, and catering services.
Competition We face significant competition from restaurants in the fast-casual dining and traditional fast-food segments of the restaurant industry. These segments compete on factors such as taste, price, food quality and presentation, service, location, and restaurant condition. Our competitors include locally owned restaurants and regional and national chains that offer dine-in, carry-out, delivery, and catering services.
In each of 2023 and 2024, Built In included Sweetgreen in their “100 Best places to Work in Los Angeles,” and in 2024 Forbes recognized Sweetgreen as one of “America’s Best Employers for Women.” Our Restaurant Team Structure and the Pathway to Opportunity We believe we have designed a transparent and structured career learning path.
In 2025, Forbes included Sweetgreen in their list of America’s Best Large Employers and TIME recognized Sweetgreen as one of America’s Best Midsized Companies, each for the second consecutive year. Restaurant Team Structure and Career Development We believe we have designed a structured and transparent career pathway that emphasizes internal advancement and leadership development.
Employees As of December 29, 2024, we had a total of 6,407 employees, 334 of whom worked at our Sweetgreen Support Center and 6,073 of whom worked in our restaurants.
Workforce Overview As of December 28, 2025, we had a total of 6,486 employees, 248 of whom worked at our Sweetgreen Support Center and 6,238 of whom worked in our restaurants. 7 Table of Contents Total Rewards We offer competitive wages and a comprehensive benefits package designed to support the financial, physical, and mental well-being of our employees.
Our Supply Chain We have built a differentiated, end-to-end supply chain that culminates in delicious, high-quality food for our customers. We currently have more than 140 active domestic food partners, such as farmer, bakers, and distributors.
Disciplined Profitable Investment Deliver sustainable growth by prioritizing returns, maintaining cost discipline, and allocating capital with rigor. 6 Table of Contents Our Supply Chain We have built a differentiated, end-to-end supply chain that culminates in delicious, high-quality food for our customers.
At Sweetgreen, Real Food tastes better, makes you feel better, and drives the frequency that has defined our success. Our Menu Offering We have designed our menu to be delicious, customizable, and convenient to empower our customers to make healthier choices for both lunch and dinner.
As of December 28, 2025 , we owned and operate d 281 restaurants in 24 states and Washington, D.C. Our Menu Offerings We have designed our menu to be delicious, customizable, and convenient to empower our customers to make healthier choices for both lunch and dinner.
As we expand into new geographic markets and further develop our digital channels (including our Owned Digital Channels), we face competition from these restaurants as well as new competitors that strive to compete with our market segments, particularly as many of our competitors have increased their digital presence over the last few years, including by enabling delivery and take-out through their digital applications.
Among our competitors are national and regional fast-casual restaurant chains, restaurants emphasizing clean, real ingredients and health-conscious dining, and traditional quick-service restaurants. As we continue to expand into new markets and further develop our digital channels, we also face growing competition from both new entrants and existing restaurants that have increased their digital presence through delivery and take-out platforms.
We are constantly seeking ways to enhance our menu, all while honoring our Food Ethos.
We are constantly seeking ways to enhance our menu, all while honoring our food ethos. Core Menu Our core menu consists of a curated set of signature items offered year-round across all locations, designed to deliver consistent quality and reflect our food philosophy, supported by a disciplined and scalable supply chain.
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Our bold vision is to be as ubiquitous as traditional fast food, but with the transparency and quality that consumers increasingly expect. As of December 29, 2024 , we owned and operated 246 restaurants in 22 states and Washington, D.C.
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Guests may also create a custom salad, bowl, or plate from a broad assortment of ingredients and signature dressings, enabling meaningful customization within a standardized ingredient system. We supplement our core offerings with seasonal and limited-time items that allow us to introduce new flavors and test innovation while maintaining operational consistency.
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Our Food Ethos We believe the choices we make about what we eat, where it comes from and how it is prepared have a direct impact on our health, our communities, and the planet. This is our Food Ethos, and it is firmly rooted in every aspect of our business.
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Through our owned digital channels, we also offer exclusive menu items and curated collections that support discovery, personalization, and guest engagement. Our Strategy Sweetgreen's mission is to build healthier communities by connecting people to real food.
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At Sweetgreen, we focus on Real Food, which for us means: • Plant-forward • Celebrates seasonality • Made fresh in our restaurants • Prioritizes organic, regenerative, and local sourcing • Meets strict and humane animal welfare and seafood standards • Free of highly-processed preservatives, artificial flavors, and refined or hidden sugars • Mindful of the carbon impact of each ingredient to protect future generations This commitment to our Food Ethos keeps our food delicious, nutrient dense, and sustainable.
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Over the past year, our leadership team has evaluated the business and refined our strategic priorities to strengthen execution, enhance the guest experience, and build a more durable financial model. We refer to this framework as the Sweet Growth Transformation Plan which is centered on five strategic priorities: 1.
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Our Core Menu • Our core menu features 13 curated, signature items which are offered year-round in all of our locations, including our new steak plate. • In addition to our core menu items, our single most popular item is the “custom” salad or bowl, which can include millions of combinations from 40-plus ingredients as well as our made-from-scratch dressings. • We keep our menu fresh by curating a smaller seasonal and limited time offer menu throughout the year.
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Operational Excellence Drive consistent execution across our restaurants to deliver great food, smooth operations, and reliable guest experiences. 2. Food Quality + Menu Innovation Differentiate through high-quality ingredients and scratch cooking while continuing to evolve the menu in ways that resonate with guests. 3.
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We believe our seasonal menu rotation, which celebrates the strength of our regional supply 7 Table of Contents chain by highlighting fresh local ingredients, increases order frequency by introducing new flavor combinations for our customers to sample. • On our Owned Digital Channels, we offer exclusive menu items, including seasonal digital exclusives and curated “collections” relevant to each customer.
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Personalized Experience Increase customer frequency and average check through targeted digital engagement, personalized messaging, and relevant offers. 4. Brand Relevance Attract new guests by amplifying what makes Sweetgreen distinctive, relevant, and culturally compelling. 5.
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Consistent with our Food Ethos, we seek to prioritize ingredients that are certified organic, regenerative, or locally sourced, and meet high animal welfare and seafood standards. We build direct relationships with farmers and growers and we are proud to showcase them on the walls of every restaurant and spotlight them on our digital platform.
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Our sourcing and operating standards are guided by the Sweetgreen Way, which is our internal ethos based upon our commitment to ingredient quality, responsible sourcing, and in-house preparation. We work with a broad network of domestic food partners, including farmers, manufacturers, and distributors.
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All of our suppliers provide appropriate food safety certification and third-party audits as part of the onboarding process. After onboarding, we work closely with our suppliers to ensure they adhere to our product quality specifications.
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We prioritize ingredients that meet our standards and align with our food philosophy, and we maintain direct relationships with many of our growers and producers. Our supply chain is organized into regional distribution networks, managed in consultation with our lead logistics provider, which promotes consistency, scalability, and operational reliability.
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Our Real Estate We op ened 25 Net New Restaurants in fiscal year 2024. As we continue to expand, we are confident that our compelling restaurant-level economics will continue to work across geographies and market types.
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Our Real Estate We op ened 35 and 25 Net New Restaurants in fiscal years 2025 and 2024, respectively, bringing our total count as of December 28, 2025 to 281 restaurants in 24 states and Wash ington, D.C. We expect to open fewer new restaurants in 2026 than we did in 2025.
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Our Technology Our Customer-Facing Digital Platform We have a five-channel model that is designed to make it easy for our customers to order Sweetgreen how they want, whenever they want. Pick-Up. Customers place their order through our mobile app or website and pick it up from their chosen Sweetgreen location at the time most convenient for them. Native Delivery.
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Our People We believe our team members are central to delivering the Sweetgreen experience and executing our long-term strategy. Our approach to human capital management focuses on attracting, developing, and retaining talent, while fostering a culture that supports operational excellence, leadership development, and consistent guest experiences.
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We launched our Native Delivery Channel in January 2020, and believe it offers a superior customer experience to our Marketplace Channel, generally with lower menu item pricing than our Marketplace Channel, greater delivery radii than our Marketplace Channel in many locations, enhanced 8 Table of Contents customization features, access to our seasonal menu items and ingredients, and access to exclusive promotions via Sweetgreen Rewards and Challenges.
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We believe developing leaders from within strengthens operational consistency and reinforces our culture. Team members may progress along a defined path to restaurant leadership roles, including Head Coach, in as few as three years. In 2025, we introduced additional leadership roles and development programs intended to support food quality, people leadership, and internal mobility.
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Outpost and Catering. Our Outpost and Catering Channel enables office workers or building residents to get their custom Sweetgreen order delive red directly to an outpost station at their location during a dedicated time window each day, typically with lower customer fees than our other delivery channels.
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During fiscal year 2025, 52% of open restaurant leadership roles were filled with promotions of existing employees. Talent Acquisition and Retention Our staffing strategy prioritizes internal promotion while supporting growth through scalable and efficient hiring practices. We utilize digital tools to streamline recruiting and scheduling, enabling Head Coaches to focus on restaurant operations and the guest experience.
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As of the end of fiscal year 2024, we had 823 live Outpost locations. In addition, our Outpost and Catering Channel includes our catering offerings, which refer to sales to event and group customers made through our catering website for pickup at one of our restaurants or delivery to a customer specified address.
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We also provide targeted staffing support for new restaurant openings and locations with elevated staffing needs. We seek to attract and retain employees who align with our purpose and values by offering competitive compensation, development opportunities, and a supportive work environment.
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Bulk orders of salads, warm bowls, sides, and drinks can be ordered for delivery together and are prepared at select locations. In-Store. In addition to a strategic focus on our Owned Digital Channels, our In-Store Channel is core to our platform and serves as a critical path to attract new customers via our iconic physical locations.
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Culture and Employee Engagement Our approach to team and culture is guided by our core value of “Win, Win, Win,” reflecting our belief that investing in the team member experience benefits our employees, our guests, and our business. We aim to maintain a positive, inclusive, and engaging workplace where employees feel supported and motivated to deliver exceptional guest experiences.
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Purchases made in our In-Store Channel via cash or credit card are referred to as “Non-Digital” transactions, and purchases made in our In-Store Channel via digital scan-to-pay, prior to its elimination in 2023, were included as part of our Owned Digital Channels. Marketplace.
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In 2025, we donated approximately 100,000 meals to people experiencing food insecurity through our new restaurant opening program. • Wildfire Relief: In January 2025, we mobilized our team in response to the devastating wildfires affecting our hometown of Los Angeles.
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Our Marketplace Channel often serves as an effective means to reach new digital customers who have not used our native mobile app or website before. We then aim to convert Marketplace customers to our digital platform.
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We donated more than 5,000 nutrient-dense Sweetgreen meals over three weeks to fuel the relief effort and support first responders fighting the Palisades 8 Table of Contents and Eaton Fires. We also handled transportation logistics for bulk donations of fresh produce from our supply chain and shelf-stable snacks and beverages from brand partners.
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For fiscal year 2024 , 30% of our revenue was from our Owned Digital Channels, as compared to 36% from our Owned Digital Channels in fiscal year 2023. When including orders placed on the Marketplace Channel, 56% of our fiscal year 2024 revenue was derived from digital channels, as compared to 59% of our revenue in fiscal year 2023.
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Additionally, we have seen extreme weather conditions and natural disasters cause disruptions to our operations from time to time, including the wildfires in Los Angeles, which impacted our fiscal year 2025 results. Data Privacy and Security In the ordinary course of our business, we may process personal or other sensitive, proprietary, and confidential information.
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The convenience of our multi-channel approach, combined with our ability to offer personalized content and recommendations, results in a highly engaged cohort of habitual Sweetgreen customers.
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We also use our website and official social media channels, including our channels on platforms such as LinkedIn, X (formerly Twitter), Instagram, TikTok, and Facebook, as tools to disclose important information about the company and to comply with our disclosure obligations under Regulation Fair Disclosure.
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Not only are users of our Owned Digital Channels our most frequent customers, but the average order value (which is the dollar value of an order exclusive of taxes and any fees paid by the customer) for orders placed on our Owned Digital Channels is higher than non-digital orders placed through our In-Store Channel.
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Proprietary Technology Powers our Operations at Scale In addition to our customer-facing digital platform, we have also invested in technology to support our back of house operations, simplify the work of our team members, and enhance how we hire, train, and schedule team members.
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These investments include leveraging systems that manage inventory in our restaurants to ensure freshness, guide prep work, optimize our meal assembly process, and manage our team members’ output to enhance our order fulfillment times. In 2021, we acquired a kitchen automation technology company, Spyce Food Co.
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(“Spyce”), and have further developed and deployed Spyce’s kitchen automation technology, which we refer to as the Infinite Kitchen. We incorporate our Infinite Kitchen technology into new and existing restaurants based, in large part, upon our evaluation of the potential economic and other benefits for those restaurants.
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We deployed units of the Infinite Kitchen in two of our restaurants during fiscal year 2023 and ten of our restaurants during fiscal year 2024. Of the 10 restaurants that received the Infinite Kitchen technology in fiscal year 2024, three were retrofits and seven were new restaurant openings.
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We continue to learn from these deployments and are incorporating our findings into future deployments. In 2023, our Infinite Kitchen technology was named as one of Time’s Best Inventions, which recognizes 200 extraordinary inventions that changed the way we live, work, play, and think about what’s possible.
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Our Marketing Strategy Our brand has been designed to inspire consumers to live healthier. By connecting food and culture to amplify our mission, we use a carefully crafted combination of brand, retail, and digital marketing to build awareness, generate sales, and drive brand love.
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In each of 2023 and 2024, we were named one of Fast Company’s 9 Table of Contents Brands That Matter, which recognized companies and nonprofits that have undeniably impacted business and culture.
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Since inception, we have collaborated with some of the world’s best chefs, athletes, musicians, and thought leaders in our communities to help us amplify the power of healthy food.
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Combined with an expansive menu strategy spanning beyond salads into hearty entrée options and dayparts, our goal is to shift the paradigm of what’s possible when it comes to convenient food at scale and positively impact how the next generation connects to healthy eating.
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To drive customers from awareness to consideration to conversion, we have invested in robust customer relationship management capabilities and paid media strategies across search, social media, and search engine optimization, as well as implemented customized digital experiences through our app.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

369 edited+101 added−221 removed27 unchanged
Biggest changeOur ability to identify, secure, and open new restaurant sites also depends on other factors, including: • identifying and securing an appropriate site and selecting the best restaurant format for that given site and market (including determining whether to test new restaurant formats, including any formats incorporating automation technology), which requires consideration of the likely effectiveness of our multi-channel approach at the site, the size of the site, traffic patterns, local retail and business attractions and infrastructure that may drive customer traffic and sales, proximity of the site to our existing restaurants, and anticipated commercial, residential and infrastructure development near the site, many of which have become more challenging to analyze due to the uncertainty of other companies’ return-to-office plans in various locations; • negotiating leases with acceptable terms; • receiving timely delivery of leased premises to us from our landlords and the punctual commencement of our build-out construction activities; • obtaining tenant improvement allowances from our landlords; • analyzing financial conditions affecting developers and potential landlords, such as the ability of landlords and developers to receive development financing, the effects of macro-economic conditions, and the credit market, which could lead to these parties delaying or canceling development projects (or renovations of existing projects), in turn reducing the number of appropriate restaurant sites available; • managing construction and development costs of new restaurants, particularly in competitive markets; • obtaining construction materials and labor at acceptable costs, particularly with the increase in inflation; • maintaining qualified real estate and construction resources to source and manage construction of new sites; • securing required governmental approvals, permits and licenses (including construction, certificates of occupancy, and other permits) in a timely manner and responding effectively to any changes in local, state, or federal laws or regulations; 16 Table of Contents • avoiding the impact of inclement weather, natural disasters and other calamities; and • identifying, hiring, and training qualified employees in each local market.
Biggest changeOur ability to identify, secure and open new restaurant sites also depends on other factors, including, amongst other things: • identifying and securing sites with appropriate attributes such as site size, traffic patterns, nearby retail and business attractions and infrastructure, proximity to existing restaurants, and anticipated commercial, residential, and infrastructure development—factors made more challenging by uncertainty regarding other companies’ return-to-office plans; • negotiating leases with acceptable terms (including but not limited to sufficient tenant improvement allowances); • identifying and securing sites that can be expected to allow for the timely delivery of the leased premises; • properly analyzing financial conditions that may adversely affect developers or landlords (including availability of development financing, macroeconomic conditions, and credit markets) and which might lead to project delays or cancellations; • identifying and securing sites that will have acceptable construction and development resources and costs and that will have access to a sufficient pool of qualified store operations personnel (particularly in competitive markets); and • securing required governmental approvals, permits, and licenses (including construction permits and certificates of occupancy) on a timely basis and responding to changes in applicable zoning, land use, environmental, health and safety, and other rules and regulations (including interpretations thereof).
We collect, use, receive, store, process, generate, transfer, make accessible, protect, secure, dispose of, transmit, share, and disclose personal information and other sensitive information about customers, personnel, business contacts, and others; proprietary and confidential business data; trade secrets; intellectual property; and sensitive third-party data and financial information in the course of operating our business.
In the course of operating our business, we collect, use, receive, store, process, generate, transfer, make accessible, protect, secure, dispose of, transmit, share, and disclose personal information and other sensitive information about customers, personnel, business contacts, and others; proprietary and confidential business data; trade secrets; intellectual property; and sensitive third-party data and financial information.
For the avoidance of doubt, this provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters for any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering.
For the avoidance of doubt, this provision is intended to benefit and may be enforced by us, our directors and officers, the underwriters for any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering.
For example, Washington’s My Health My Data Act (“MHMD”) broadly defines consumer health data, places restrictions on processing consumer health data (including imposing stringent requirements for consents), provides consumers certain rights with respect to their health data, and creates a private right of action to allow individuals to sue for violations of the law.
For example, Washington’s My Health My Data Act broadly defines consumer health data, places restrictions on processing consumer health data (including imposing stringent requirements for consents), provides consumers certain rights with respect to their health data, and creates a private right of action to allow individuals to sue for violations of the law.
The successful operation of our business depends upon the performance and reliability of Internet, mobile, and other infrastructure that is not under our control. Both our in-restaurant and online and mobile ordering business depend on the performance and reliability of Internet infrastructure to process and fulfill orders, which is not under our control.
The successful operation of our business depends upon the performance and reliability of Internet, mobile, and other infrastructure that is not under our control. Both our in-restaurant and online and mobile ordering businesses depend on the performance and reliability of internet infrastructure to process and fulfill orders, which is not under our control.
The enactment of such laws complicates compliance efforts, and increases legal risk and compliance costs for us and the third parties with whom we work. We are also subject to new laws governing the privacy of consumer health data.
The enactment of such laws complicates compliance efforts, and increases legal risk and compliance costs for us and the third parties with whom we work. We are also subject to laws governing the privacy of consumer health data.
The market price of our Class A common stock has been and is likely to continue to be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control, including: • actual or anticipated fluctuations in our financial condition or results of operations; • variance in our financial performance from expectations of securities analysts; • changes in our projected operating and financial results; • announcements by us or our competitors of significant business developments, acquisitions, or new offerings; • announcements or concerns regarding real or perceived quality or food safety issues with our products or similar products of our competitors; • our involvement in litigation; • future sales of our common stock by us or our stockholders, • novel and unforeseen market forces and trading strategies; • changes in senior management or key personnel; • the trading volume of our Class A common stock; and • changes in the anticipated future size and growth rate of our market.
The market price of our Class A common stock has been and is likely to continue to be highly volatile and may fluctuate significantly or decline substantially as a result of a variety of factors, some of which are beyond our control, including: • actual or anticipated fluctuations in our financial condition or results of operations; • variance in our financial performance from the expectations of securities analysts; • changes in our projected operating and financial results; • announcements by us or our competitors regarding significant business developments, acquisitions, or new offerings; • announcements of, or concerns regarding, actual or perceived quality or food safety issues with our products or similar products offered by our competitors; • our involvement in litigation; • future sales of our common stock by us or our stockholders, • novel or unforeseen market forces and trading strategies; • changes in senior management or key personnel; • the trading volume of our Class A common stock; and • changes in the anticipated future size and growth rate of our market.
Our focus on environmental sustainability and social initiatives may increase our costs, and our inability to meet our sustainability goals and any related disclosures requirements could harm our reputation and adversely impact our financial results.
Our focus on environmental sustainability and social initiatives may increase our costs, and our inability to meet our sustainability goals and any disclosures requirements could harm our reputation and adversely impact our financial results.
Our business is also subject to general risks and uncertainties that affect many other companies, including, but not limited to, overall economic and industry conditions, and additional risks not currently known to us or that we presently deem immaterial may arise or become material and may negatively impact our business, reputation, financial condition, results of operations, or the trading price of our common stock.
Our business is also subject to general risks and uncertainties that affect many other companies, including, but not limited to, overall economic and industry conditions, and additional risks not currently known to us or that we presently deem immaterial may arise or become material and may negatively impact our business, reputation, financial condition, results of operations, or the trading price of our Class A common stock.
Managing our growth effectively will require us to continue to enhance these systems, procedures and controls and to hire, train, and retain qualified managers and team members.
Managing our growth effectively will require us to continue to enhance these systems, procedures and controls and to hire, train, reward, and retain qualified managers and team members.
For example, in fiscal year 2023, Chipotle filed a lawsuit against us (which lawsuit was subsequently settled) in connection with our use of the word “Chipotle” as part of the name of one of our menu items. Any such litigation may be costly and could divert other resources from our business.
For example, in fiscal year 2023, Chipotle filed a lawsuit against us, which was subsequently settled, in connection with our use of the word “Chipotle” as part of the name of one of our menu items. Any such litigation may be costly and could divert management time and other resources from our business.
Operating our business and platform involves the collection, use, storage, and transmission of sensitive, proprietary, and confidential information, including personal information of customers, our personnel, the personnel of our business partners, and others.
Operating our business involves the collection, use, storage, and transmission of sensitive, proprietary, and confidential information, including personal information of customers, our personnel, the personnel of our business partners, and others.
Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive information or our information technology systems, or those of the third parties with whom we work.
Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive, proprietary, or confidential information or our information technology systems, or those of the third parties with whom we work.
We may not be able to effectively respond to changes in customer health perceptions, comply with further nutrient content disclosure requirements or adapt our menu offerings to trends in eating habits, which could have an adverse effect on our business, financial condition, and results of operations.
We may not be able to effectively respond to changes in customer health perceptions, comply with additional nutrient content disclosure requirements, or adapt our menu offerings to trends in eating habits, which could have an adverse effect on our business, financial condition, and results of operations.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights and preferences determined by our board of directors that may be senior to our common stock; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our board of directors, the chair of our board of directors, or our chief executive officer; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • prohibit cumulative voting in the election of directors; • provide that our directors may be removed only upon the vote of at least 66 2/3% of the voting power of our then-outstanding shares of capital stock; • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; and • require the approval of our board of directors or the holders of at least 66 2/3% of the voting power of our then-outstanding shares of capital stock to amend our bylaws and certain provisions of our certificate of incorporation.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • authorize our board of directors to issue, without further action by stockholders, shares of undesignated preferred stock with terms, rights and preferences determined by our board of directors that may be senior to our common stock; • require that any action to be taken by stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of stockholders may be called only by our board of directors, the chair of our board of directors, or our chief executive officer; • establish advance notice procedures for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • prohibit cumulative voting in the election of directors; • provide that our directors may be removed only upon the vote of at least 66 2/3% of the voting power of our then-outstanding shares of capital stock; • provide that vacancies on our board of directors may be filled only by a majority of the directors then in office, even if less than a quorum; and • require the approval of our board of directors or the holders of at least 66 2/3% of the voting power of our then-outstanding shares of capital stock to amend our bylaws and certain provisions of our certificate of incorporation.
We rely on data from internal tools to calculate certain of our performance metrics. Real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business. We track our performance metrics with internal tools that are not independently verified by any third party.
We rely on data from internal tools to calculate certain of our performance metrics, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business. We track certain performance metrics using internal tools that are not independently verified by any third party.
In general, an “ownership change” will occur if there is a cumulative change in our ownership by “five percent stockholders” that exceeds 50 percentage points over a rolling three-year period. Similar rules may apply under state tax laws.
In general, an “ownership change” will occur if there is a cumulative change in our ownership by “five-percent stockholders” that exceeds 50 percentage points over a rolling three-year period. Similar limitations may apply under state tax laws.
As a result of any of these factors, results for any one quarter are not necessarily indicative of results to be expected for any other quarter or for any year. Our key performance metrics may also fluctuate as a result of these or other factors. Our current insurance may not provide adequate levels of coverage against claims.
As a result of these or other factors, results for any particular quarter are not necessarily indicative of results to be expected for any other quarter or for any year. Our key performance metrics may also fluctuate as a result of these or other factors. Our current insurance may not provide adequate levels of coverage against claims.
As we operate more restaurants, our rate of expansion relative to the size of our restaurant base could decline. Our long-term success is highly dependent on our ability to effectively identify and secure appropriate sites for new restaurants.
As we operate more restaurants, our rate of expansion relative to the size of our restaurant base may decline. Our long-term success is highly dependent on our ability to effectively identify and secure appropriate sites for new restaurants.
Our ability to implement our business plan successfully depends in part on our ability to further build brand recognition using our trademarks, service marks, trade dress, and other intellectual property, including our name and logos and the unique ambience of our restaurants.
Our ability to successfully implement our business plan depends in part on our ability to build and maintain brand recognition using our trademarks, service marks, trade dress, and other intellectual property, including our name and logos and the unique ambience of our restaurants.
If the shift toward remote work continues and workers do not return to offices in urban centers, or work from those locations less frequently, our business, financial condition, and results of operations could be adversely affected for an uncertain period of time, even if customers otherwise resume pre-pandemic levels of discretionary spending.
If the remote work trend continues and workers do not return to offices in urban centers, or work from those locations less frequently, our business, financial condition, and results of operations could be adversely affected for an uncertain period of time, even if customers otherwise resume pre-pandemic levels of discretionary spending.
The CCPA also created restrictions on “sales” of personal information that allow California residents to opt-out of certain sharing of their personal information and may restrict the use of cookies and similar technologies for advertising purposes.
The CCPA also imposes restrictions on “sales” of personal information that allow California residents to opt-out of certain sharing of their personal information and may restrict the use of cookies and similar technologies for advertising purposes.
These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.
These provisions may frustrate or prevent attempts by stockholders to replace or remove current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing members of management.
Any adverse outcome of such a review or audit could have a negative effect on our financial position and results of operations. The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty.
Any adverse outcome of a review or audit could have a negative effect on our financial condition and results of operations. The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty.
Failure to comply with environmental laws, particularly regarding waste management, may negatively affect our business. We are subject to various federal, state, and local laws and regulations concerning waste minimization, recyclables, disposal, pollution, protection of the environment, and the presence, discharge, storage, handling, release and disposal of, and exposure to, hazardous or toxic substances.
Failure to comply with environmental laws, particularly regarding waste management, may negatively affect our business. We are subject to various federal, state, and local laws and regulations concerning waste minimization, recycling, disposal, pollution, environmental protection, and the presence, discharge, storage, handling, release, disposal of, and exposure to hazardous or toxic substances.
In addition, any changes to local laws or regulations within these key metropolitan markets that affect our ability to operate or increase our operating expenses in these markets would have an adverse effect on our business.
In addition, changes to local laws or regulations in these key metropolitan markets that affect our ability to operate or increase our operating expenses would have an adverse effect on our business.
For example, several times in fiscal years 2020 and 2021, our third-party delivery fulfillment partner for orders placed through our Native Delivery Channel experienced outages that required us to temporarily shut down our Native Delivery Channel either entirely or in certain geographic markets, which adversely impacted our revenue.
For example, during fiscal years 2020 and 2021, our third-party delivery fulfillment partner for orders placed through our Native Delivery Channel experienced outages that required us to temporarily shut down that channel, either entirely or in certain geographic markets, which adversely impacted our revenue.
A significant and continuing malfunction or failure of, or a safety concern with respect to, one or more Infinite Kitchen units may require us to close the stores containing those units, and we may not be able to repair those units and reopen those stores in a timely manner or at all.
A significant and continuing malfunction or failure of, or a safety concern with respect to, one or more Infinite Kitchen units may require us to close the stores containing those units, and we may not be able to restore operations or reopen those stores in a timely manner or at all.
We have been and will likely continue to be party to litigation that could distract management, increase our expenses, and subject us to monetary damages or other remedies.
We have been and will likely continue to be party to litigation that could distract management, increase our expenses, and subject us to monetary damages or other penalties.
An economic downturn, increased competition, or regulatory obstacles in any of these key markets would adversely affect our business, financial condition, and results of operations to a much greater degree than would the occurrence of such events in other areas.
An economic downturn, increased competition, or regulatory obstacles in any of these key markets could adversely affect our business, financial condition, and results of operations to a greater degree than the occurrence of such events in other areas.
For example, several times in fiscal years 2020 and 2021, our third-party delivery fulfillment partner for orders placed through our Native Delivery Channel experienced outages that required us to temporarily shut down our Native Delivery Channel either entirely or in certain geographic markets.
For example, during fiscal years 2020 and 2021, our third-party delivery fulfillment partner for orders placed through our Native Delivery Channel experienced outages that required us to temporarily shut down that channel, either entirely or in certain geographic markets.
Broad market and industry fluctuations, as well as general economic, political, regulatory, and market conditions, have and may also continue to negatively impact the market price of our Class A common stock, particularly in light of recent inflation and changes in interest rates.
In addition, broad market and industry fluctuations, as well as general economic, political, regulatory, and market conditions, have negatively impacted and may continue to negatively impact the market price of our Class A common stock, particularly in light of recent inflation and changes in interest rates.
Complying with these laws and regulations subjects us to substantial expense and non-compliance could expose us to significant liabilities. We incur legal costs to defend, and we could suffer losses from, litigation and disputes regarding these and similar laws and regulations, and the amount of such losses or costs could be significant.
Compliance with these laws and regulations subjects us to substantial expense, and non-compliance could expose us to significant liabilities. We incur legal costs to defend, and could suffer losses from, litigation and disputes relating to these and similar laws and regulations, and the amount of such costs or losses could be significant.
Our platform relies on such technologies for advertising purposes and could be adversely affected by the CCPA’s restrictions if users opt-out of certain information sharing on which our advertising relies, which would impair our ability to advertise.
Our platform relies on such technologies for advertising purposes and could be adversely affected by the CCPA’s restrictions if a significant number of users opt-out of certain information sharing on which our advertising relies, which would impair our ability to advertise.
Further, future transfers by holders of our Class B common stock will generally result in those shares converting into shares of our Class A common stock, subject to limited exceptions, such as certain transfers effected for tax or estate planning purposes.
Transfers by holders of our Class B common stock generally result in those shares converting into shares of our Class A common stock, subject to limited exceptions, such as certain transfers effected for tax or estate planning purposes.
In the past, we have settled various lawsuits related to our alleged ADA non-compliance, which resulted in accommodations to our website, smartphone applications, and physical restaurants. We are currently engaged in ADA-related litigation, and we may face additional litigation in the future.
In the past, we have settled lawsuits related to alleged ADA non-compliance, which resulted in accommodations to our websites, smartphone applications, and physical restaurants. We are currently engaged in ADA-related litigation and may face additional litigation in the future.
Furthermore, immigration laws are currently a topic of considerable political focus.
Immigration laws are currently a topic of considerable political focus.
For example, we collect certain customers’ home and/or business addresses for processing delivery orders, mobile phone numbers from users of our platform, and personal information from our personnel, including in the administration of our benefit plans.
For example, we collect certain customers’ home and business addresses for processing delivery orders, mobile phone numbers from users of our platform, and personal information from our personnel, including in connection with the administration of our benefit plans.
Our ability to use NOLs and other tax attributes to reduce future taxable income and liabilities may be subject to annual limitations as a result of prior ownership changes and ownership changes that may occur in the future.
As a result, our ability to use NOLs and other tax attributes to reduce future taxable income and tax liabilities may be subject to annual limitations due to prior ownership changes or ownership changes that may occur in the future.
We are currently under investigation by the NYC Department of Consumer and Worker Protection for fair workweek violations for one of our New York City locations, and we may in the future be subject to similar investigations in New York City or other locations. Other jurisdictions where we operate are considering enacting similar legislation.
We are currently under investigation by the New York City Department of Consumer and Worker Protection for fair workweek violations at one of our New York City locations, and we may be subject to similar investigations in New York City or other jurisdictions in the future. Other jurisdictions in which we operate are considering enacting similar legislation.
All outstanding shares of our Class B common stock are beneficially owned by our founders, Jonathan Neman, Nicolas Jammet, and Nathaniel Ru, who collectively represent approximately 53% of the voting power of our outstanding capital stock.
All outstanding shares of our Class B common stock are beneficially owned by our founders, Jonathan Neman, Nicolas Jammet, and Nathaniel Ru, who collectively represent the majority of the voting power of our outstanding capital stock.
As a result, our founders are able to exercise significant influence over all matters requiring stockholder approval, including the election of directors, approval of significant corporate transactions (such as a merger), and amendments of our organizational documents.
As a result, our founders are able to exercise significant influence over matters requiring stockholder approval, including the election of directors, approval of significant corporate transactions, such as mergers, and amendments to our organizational documents.
Competition within our industry for acquisitions of businesses, technologies in areas such as automation and logistics (such as our acquisition of Spyce), and assets (including retail spaces) may become intense, and we have limited experience in acquisitions.
Competition within our industry for acquisitions of businesses, technologies in areas such as automation and logistics, and assets, including retail spaces, may become intense, and we have limited experience with acquisitions.
We are obligated under long-term, non-cancelable leases for all of our restaurants and both phases of our Sweetgreen Support Center. Our restaurant leases generally require us to pay a proportionate share of real estate taxes, insurance, common area maintenance charges, and other operating costs. Certain of our restaurant leases also provide for contingent rental payments based on sales thresholds.
We are obligated under long-term, non-cancelable leases for all of our restaurants and the current and prior location of our Sweetgreen Support Center. Our restaurant leases generally require us to pay a proportionate share of real estate taxes, insurance, common area maintenance charges, and other operating costs, and certain leases also provide for contingent rental payments based on sales thresholds.
Any changes to our agreement with DoorDash, or any future third-party delivery partner, including the loss or addition of any third-party delivery partner, could also affect our ability to provide proper delivery services to our customers.
Changes to our agreement with DoorDash, or any future third-party delivery partner, including the loss or addition of a delivery partner, could also affect our ability to provide delivery services.
For these and other reasons, any calculations based on the number of unique customers may not accurately reflect the number of people actually placing orders through one of our Digital Channels or making purchases through the non-digital component of our In-Store Channel.
For these and other reasons, calculations based on the number of unique customers may not accurately reflect the number of individuals actually placing orders through our Digital Channels or making purchases through the non-digital component of our In-Store Channel.
Sales of a substantial number of shares of our Class A common stock in the public market, or the perception that these sales might occur, could depress the market price of our Class A common stock and could impair our ability to raise capital through the sale of additional equity securities.
Sales of a substantial number of shares of our Class A common stock in the public market, or the perception that such sales may occur, could depress the market price of our Class A common stock and impair our ability to raise capital through the sale of additional equity securities.
In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally, subject to certain exceptions, prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder.
In addition, because we are incorporated in Delaware, we are subject to Section 203 of the Delaware General Corporation Law, which generally, subject to certain exceptions, prohibits a Delaware corporation from engaging in a broad range of business combinations with an “interested” stockholder for a period of three years following the date on which such stockholder became an “interested” stockholder.
We have been in the past and are currently subject to a number of claims from our employees alleging violations of federal and state law regarding workplace and employment matters, including off-the-clock work (including meal and rest break compliance), predictive scheduling, equal employment opportunity, harassment, discrimination, failure to pay timely wages, employee misclassification, retaliation, wrongful termination, and similar matters.
We have in the past and are currently subject to a number of claims from employees alleging violations of federal and state laws relating to workplace and employment matters, including off-the-clock work, meal and rest break compliance, predictive scheduling, equal employment opportunity, harassment, discrimination, failure to pay timely wages, employee misclassification, retaliation, wrongful termination, and similar matters.
We cannot guarantee that these agreements will not be breached, that we will have adequate remedies in the event of a breach, or that the respective employees or consultants will not assert rights to our intellectual property rights or other proprietary information.
However, we cannot guarantee that these agreements will be effective, will not be breached, that we will have adequate remedies in the event of a breach, or that employees or consultants will not assert rights to our intellectual property or proprietary information.
As an example, in fiscal year 2024, a third party with whom we work suffered a distributed denial of service (DDoS) attack, which temporarily limited some of our customers’ ability to access their online Sweetgreen accounts and transact in certain of our Owned Digital Channels.
For example, in fiscal year 2024, a third party with whom we work experienced a distributed denial-of-service (DDoS) attack, which temporarily limited some customers’ ability to access their online Sweetgreen accounts and transact in certain of our Owned Digital Channels.
As such, even if we are able to identify a target for acquisition, we may not be able to complete the acquisition on commercially reasonable terms, or such target may be acquired by another company including, potentially, one of our competitors. Negotiations for such potential acquisitions may result in diversion of management time and significant out-of-pocket costs.
As a result, even if we identify a potential acquisition target, we may not be able to complete the acquisition on commercially reasonable terms, or at all, or such target may be acquired by another company, including one of our competitors. Negotiations for potential acquisitions may divert management time and result in significant out-of-pocket costs.
Our quarterly financial results may fluctuate significantly, including due to factors that are not in our control, and could fail to meet investors’ expectations for various reasons, including: • negative publicity about the safety of our food, employment-related issues, litigation, or other issues involving our restaurants; • the impact of macroeconomic or geopolitical conditions, including their impact on customer behavior and discretionary spending; • fluctuations in supply costs, including as a result of inflation, particularly for our most significant ingredients, and our inability to offset the higher cost with price increases without adversely impacting our sales; • labor availability and wages of our restaurant employees, including as a result of inflation and changes to minimum wage, and our inability to offset the higher cost of labor with price increases without adversely impacting our sales; • increases in marketing or promotional expenses; • the timing of new restaurant openings and existing restaurant renovations and related revenues and expenses (including any delays in openings or renovations caused by delays in the manufacture or deployment of Infinite Kitchen units), and the operating costs at newly opened restaurants; • the impact of inclement weather and natural disasters, such as winter storms, freezes, fires, and droughts, which could decrease customer traffic and increase the costs of ingredients; • changes in the senior management team; • the announcement of any mergers & acquisitions or other strategic partnerships; • the amount and timing of stock-based compensation; • litigation, settlement costs, and related legal expenses; • tax expenses, asset impairment charges, and non-operating costs; and • variations in general economic conditions, including the impact of declining interest rates on our interest income or the impact of inflation.
Our quarterly financial results may fluctuate significantly, including due to factors that are not in our control, and may fail to meet investors’ expectations for a variety of reasons, including: • negative publicity regarding the safety of our food, employment-related matters, litigation, or other issues involving our restaurants; • macroeconomic or geopolitical conditions, including their impact on customer behavior and discretionary spending; 41 Table of Contents • fluctuations in supply costs, including as a result of inflation, particularly for our most significant ingredients, and our inability to offset higher costs with price increases without adversely affecting sales; • labor availability and wages for our restaurant employees, including as a result of inflation and changes to minimum wage laws, and our inability to offset higher labor costs with price increases without adversely affecting sales; • increases in marketing or promotional expenses; • the timing of new restaurant openings and existing restaurant renovations and related revenues and expenses, including delays in openings or renovations caused by delays in the manufacture or deployment of Infinite Kitchen units, and operating costs at newly opened restaurants; • the impact of inclement weather and natural disasters, such as winter storms, freezes, fires, and droughts, which could reduce customer traffic and increase ingredient costs; • changes in senior management; • announcements of mergers and acquisitions or other strategic partnerships; • the amount and timing of stock-based compensation; • litigation, settlement costs, and related legal expenses; • tax expenses, asset impairment charges, and non-operating costs; and • variations in general economic conditions, including the impact of declining interest rates on our interest income or the impact of inflation.
Also, as we open and operate more restaurants, our rate of expansion relative to the size of our existing restaurant base is declining and is likely to continue to decline, making it increasingly difficult to achieve levels of sales and profitability growth that we achieved in prior years.
As we open and operate more restaurants, our rate of expansion relative to the size of our existing restaurant base has declined and is likely to continue to decline, making it increasingly difficult to achieve the levels of sales and profitability growth we achieved in prior years.
This could decrease the effectiveness of our marketing and 39 Table of Contents adverting strategies and decrease our level of customer acquisition and/or retention, may cause us to seek new avenues to market and advertise, and may cause us to increase our marketing and advertising expenditures.
This could decrease the effectiveness of our marketing and advertising strategies and decrease our level of customer acquisition and/or retention, may cause us to seek new avenues to market and advertise, and may cause us to increase our marketing and advertising expenditures.
In this manner, increased costs could adversely affect our results of operations. We depend on our senior management team and other key employees, and the loss of one or more key personnel or an inability to attract, hire, integrate, and retain highly skilled personnel could have an adverse effect on our business, financial condition, and results of operations.
As a result, increased costs could adversely affect our results of operations. We depend on our senior management team and other key employees, and the loss of one or more key personnel or an inability to attract, hire, integrate, and retain highly skilled personnel could have an adverse effect on our business, financial condition, and results of operations.
Certain states also impose stricter requirements for processing certain personal information, including sensitive information, such as conducting data privacy impact assessments. These state laws allow for statutory fines for noncompliance.
Certain states also impose stricter requirements for processing certain personal information, including sensitive information, such as conducting 32 Table of Contents data privacy impact assessments. These state laws allow for statutory fines for noncompliance.
If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly limited. We operate our restaurants and corporate headquarters in leased properties subject to long-term, non-cancelable leases.
If we are unable to obtain adequate financing, or financing on terms satisfactory to us, when needed, our ability to support our business growth and respond to business challenges could be materially limited. We operate our restaurants and corporate headquarters in leased properties subject to long-term, non-cancelable leases.
These environmental laws, which typically vary significantly at the local level, provide for significant fines and penalties for noncompliance and liabilities for remediation, sometimes without regard to whether the owner or operator of the property knew of, or was responsible for, the release or presence of hazardous or toxic substances.
These environmental laws, which often vary significantly at the local level, provide for significant fines and penalties for noncompliance and liabilities for remediation, in some cases without regard to whether the owner or operator of the property knew of, or was responsible for, the release or presence of hazardous or toxic substances.
While we generally seek to register our material trademarks, our trademark applications may never be granted, and our trade dress may be difficult to register. Further, third parties may oppose our trademark applications, or seek to cancel our trademark applications.
While we generally seek to register our material trademarks, our trademark applications may never be granted, and our trade dress may be difficult to register. In addition, third parties may oppose our trademark applications or seek to cancel our trademark registrations.
If a court were to find either exclusive-forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business, financial condition, results of operations, and prospects.
If a court were to find either exclusive-forum provision to be inapplicable or unenforceable in an action, we may incur further significant costs associated with resolving the dispute in other jurisdictions, which could harm our business, financial condition, results of operations, and prospects.
Many of our competitors have existed longer and have a more established market presence with substantially greater financial, marketing, personnel, and other resources than we do, and as a result, these competitors may be better positioned to succeed in the highly competitive restaurant industry.
Many of our competitors have operated longer and have a more established market presence with substantially greater financial, marketing, personnel, and other resources than we do, and therefore may be better positioned to succeed in the highly competitive restaurant industry.
If we do complete acquisitions, we may not ultimately strengthen our competitive position or achieve our goals, and any acquisitions we complete could be viewed negatively by customers, employees, or investors or result in the incurrence of significant other liabilities.
If we complete acquisitions, we may not strengthen our competitive position or achieve our objectives, and any acquisitions we complete could be viewed negatively by customers, employees, or investors, or result in the incurrence of significant liabilities.
We rely heavily on information technology, including for operating our website, mobile application and online and mobile ordering platforms, point-of-sale processing in our restaurants, management of our supply chain, payment processing, collection of cash, marketing and promotions, payment card transactions, and other processes and procedures.
We rely heavily on information technology to operate our website, mobile application, and online and mobile ordering platforms, as well as for point-of-sale processing in our restaurants, supply chain management, payment processing, cash collection, marketing and promotions, payment card transactions, and other processes and procedures.
To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated certificate of incorporation further provides that the federal district courts of the United States are the exclusive forum for resolving any complaint asserting a cause or causes of action arising under the Securities Act, including all causes of action asserted against any defendant to such complaint.
To avoid litigating claims in multiple jurisdictions and the risk of inconsistent or contrary rulings, among other considerations, our amended and restated certificate of incorporation further provides that the federal district courts of the United States are the exclusive forum for resolving any complaint asserting a cause or causes of action arising under the Securities Act, including all causes of action asserted against any defendant to such complaint.
We may not be able to adequately protect or enforce our rights in our intellectual property, which could harm the value of our brand and have an adverse effect on our business, financial condition, and results of operations.
Any of these consequences could have a material adverse effect on our reputation, business, financial condition, or results of operations. We may not be able to adequately protect or enforce our rights in our intellectual property, which could harm the value of our brand and have an adverse effect on our business, financial condition, and results of operations.
Information processed by these third parties could also be impacted by cyber-attacks, which could not only negatively impact our sales, but also harm our brand image.
Information processed by these third parties may also be subject to cyber-attacks, which could not only negatively impact our sales but also harm our brand image.
If analysts or investors do not perceive our metrics to be accurate representations of our business, or if we discover material inaccuracies in our metrics, our reputation may be harmed. Future sales of our Class A common stock in the public market could cause the market price of our common stock to decline.
If analysts or investors do not perceive our metrics to accurately represent our business, or if we identify material inaccuracies in our metrics, our reputation may be harmed. Future sales of our Class A common stock in the public market could cause the market price of our common stock to decline.
Further, holders of a substantial amount of our Class A common stock have rights, subject to some conditions, to require us to file registration statements covering the sale of their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.
In addition, holders of a substantial amount of our Class A common stock have rights, subject to certain conditions, to require us to file registration statements covering the resale of their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.
Additionally, we and many of our third party vendors rely on Amazon Web Services to operate our digital channels, and in the fourth quarter of fiscal year 2021, Amazon Web Services had an outage that disabled all of our digital channels for nearly an entire day.
In addition, we and many of our third-party vendors rely on Amazon Web Services to operate our digital channels, and during the fourth quarter of fiscal year 2021, an outage at Amazon Web Services disabled all of our digital channels for nearly an entire day.
The dual-class structure of our common stock has the effect of concentrating voting control with our founders, who have substantial control over us and will be able to influence corporate matters, including controlling the outcome of director elections. Our Class B common stock has ten votes per share and our Class A common stock has one vote per share.
The dual-class structure of our common stock concentrates voting control with our founders, who have substantial control over us and are able to influence corporate matters, including controlling the outcome of director elections. Our Class B common stock has ten votes per share, while our Class A common stock has one vote per share.
In the past, we have terminated a significant number of employees who were determined to be unauthorized workers, and if we take similar actions in the future, it may disrupt our operations, cause temporary increases in our labor costs as we train new employees, and result in additional adverse publicity.
In the past, we have terminated a significant number of employees who were determined to be unauthorized workers, and if we take similar actions in the future, it may disrupt our operations, cause temporary increases in our labor costs as we train new employees, increase litigation for claims of wrongful termination or discrimination and result in additional adverse publicity.
It may be difficult for us to prevent others from copying elements of our concept and any litigation to enforce our rights will likely be costly and may not be successful. We cannot guarantee that we will have sufficient resources to enforce our intellectual property rights.
Preventing others from copying elements of our concept may be difficult, and any litigation to enforce our rights will likely be costly and may not be successful. We also cannot guarantee that we will have sufficient resources to enforce our intellectual property rights.
Various federal, state, and labor laws govern the relationship with our employees and impact operating costs. These laws include employee classification as exempt or non-exempt for overtime and other purposes, predictive scheduling, wage and hour requirements, unemployment tax rates, workers’ compensation rates, immigration status, laws governing the employment of minors, and other wage and benefit requirements.
Various federal, state, and local employment laws govern our relationship with employees and impact operating costs. These laws include requirements relating to employee classification as exempt or non-exempt, predictive scheduling, wage and hour requirements, unemployment tax rates, workers’ compensation rates, immigration status, the employment of minors, and other wage and benefit requirements.
For example, as of April 1, 2024, the State of California increased its minimum wage for certain restaurant chains, including Sweetgreen, to $20.00 per hour. A state-appointed council may increase this minimum wage annually. Moreover, municipalities may set minimum wages above the applicable state standards, including in the municipalities in which we operate.
For example, as of April 1, 2024, California increased its minimum wage for certain restaurant chains, including Sweetgreen, to $20.00 per hour, and a state-appointed council may further increase this minimum wage annually. In addition, municipalities may establish minimum wages above applicable state standards, including in jurisdictions in which we operate.
Due to the popularity of our brand, we have noticed a number of companies (particularly internationally) that have designed their restaurants, logos, and names to be similar to ours, and we 41 Table of Contents may lack the necessary trademark rights to stop this behavior, or may not be successful in enforcing such rights against such companies.
Due to the popularity of our brand, we have observed a number of companies, particularly internationally, that have designed their restaurants, logos, and names to be similar to ours, and we may lack the necessary trademark rights to prevent this behavior or may not be successful in enforcing such rights.
As a result, our net losses may increase while we continue our planned expansion. We will need to generate and sustain increased revenue levels and decrease proportionate expenses in future periods to achieve profitability and, even if we do, we may not be able to maintain or increase profitability.
As a result, our net losses may increase. We will need to generate and sustain increased revenue levels and decrease proportional expenses in future periods to achieve profitability and, even if we do, we may not be able to maintain profitability.
Our intellectual property, particularly our trademark portfolio, is material to the conduct of our business, as our brand recognition is one of our key differentiating factors from our competitors.
Our intellectual property, particularly our trademark portfolio, is material to our business, as brand recognition is one of our key differentiating factors.
Our internal tools have a number of limitations, and our methodologies for tracking these metrics may change over time, which could result in unexpected changes to our performance metrics, including the key metrics we report.
These tools have inherent limitations, and our methodologies for tracking performance metrics may change over time, which could result in unexpected changes to our reported metrics, including the key metrics we report.
Significant additional government-imposed increases in the following areas could have an adverse effect on our business, financial condition, and results of operations: • predictive scheduling; • minimum wages; • mandatory health benefits; • paid leave; • vacation accruals; • termination requirements; • tipping; • employment of minors; • I-9 compliance; and • tax reporting.
Significant legal or regulatory changes in any of the following areas could have an adverse effect on our business, financial condition, and results of operations: • predictive scheduling; • minimum wages; • mandatory health benefits; • paid leave; • vacation accruals; • termination requirements; • tipping; • employment of minors; • I-9 compliance; and • tax reporting.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur security operations team leads our efforts to identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment using various methods including, for example, subscribing to reports and services that identify cybersecurity threats, monitoring incident notifications from stakeholders, conducting threat assessments, managing software vulnerabilities and patches, conducting tabletop incident response exercises, and, in connection with our legal function, coordinating with law enforcement concerning threats.
Biggest changeOur security operations team leads our efforts to identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment using various methods including, for example, manual and automated tools, subscribing to reports and services that identify cybersecurity threats, analyzing reports of threats and threat actors, conducting scans of the threat environment, evaluating our and our industry’s risk profile, evaluating threats reported to us, monitoring incident notifications from stakeholders, conducting threat assessments, analyzing third-party threat assessments, conducting audits, managing software vulnerabilities and patches, conducting vulnerability assessments, using external intelligence feeds, conducting tabletop incident response exercises, and, in connection with our legal function, coordinating with law enforcement concerning threats.
For example, our information security function works with management to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business, and our senior management evaluates material risks from 51 Table of Contents cybersecurity threats against our overall business objectives and provides an annual cybersecurity update to each of the board of directors and the audit committee.
For example, our cybersecurity function works with management to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business, and our senior management evaluates material risks from cybersecurity threats against our overall business objectives and provides an annual cybersecurity update to each of the board of directors and the audit committee.
We use third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including for example professional services firms including legal counsel, threat intelligence service providers, cybersecurity consultants, cybersecurity software providers, managed cybersecurity service providers, forensic investigators, and penetration testing firms.
We use third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including for example professional services firms including legal counsel, threat intelligence service providers, cybersecurity consultants, cybersecurity software providers, managed cybersecurity service providers, forensic investigators, penetration testing firms, and third-party cyber risk monitoring and digital risk protection services.
Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example: an incident response plan; vulnerability management activities; encryption of data; network security controls; data access controls; penetration testing; cybersecurity insurance; and a dedicated security operations team.
Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example: an incident response plan; incident detection and response measures; vulnerability management activities; risk assessments; implementation of security standards/certification; encryption of data; network security controls; data access controls; physical security measures; asset management, tracking, and disposal; systems monitoring; a vendor risk management program; employee training; penetration testing; cybersecurity insurance; and a dedicated security operations team.
We use third-party service providers to perform a variety of functions throughout our business, such as account management, payment processing, cloud-based infrastructure, data center hosting, and content delivery to customers.
We use third-party service providers to perform a variety of functions throughout our business, such as providing applications, account management, payment processing, cloud-based infrastructure, data center hosting, contract manufacturing, distribution, and other supply chain functions, and content delivery to customers. We have a third-party risk management program to manage cybersecurity risks associated with our use of these providers.
Our Chief Technology Officer (“CTO”), as well as the security operations, engineering, risk management and legal functions help identify, assess and manage the Company’s cybersecurity threats and risks. Our security operations team monitors and identifies potentially material cybersecurity threats and risks, and implements and maintains the Company’s incident management policies and plans.
Our security operations team monitors and identifies potentially material cybersecurity threats and risks, and implements and maintains the Company’s incident management policies and plans.
Risk Factors in this Annual Report on Form 10-K, including “If the confidentiality, integrity, or availability of our information technology, software, services, communications, or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse consequences.” Governance Our board of directors addresses the Company’s cybersecurity risk management as part of its general oversight function.
Risk Factors in this Annual Report on Form 10-K, including “If the confidentiality, integrity, or availability of our information technology, software, services, communications, or data, or those of third parties with whom we work, are or were compromised, we could experience adverse consequences.” 44 Table of Contents Governance Our board of directors addresses the Company’s cybersecurity risk management as part of its general oversight function.
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Our Chief Technology Officer (“CTO”) and Senior Director, Head of Cybersecurity, as well as our security operations team, Cybersecurity Steering Committee, legal team, and third-party service providers, help identify, assess and manage the Company’s cybersecurity threats and risks.
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The program includes risk assessment, a security questionnaire, review of the vendor’s written security program, review of security assessments, reports, audits, vulnerability scans related to the vendor, security assessment calls with the vendor’s security personnel, and imposition of information security contractual obligations on the vendor.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES As of December 29, 2024, we operated 246 restaurants. Our main office is located at 3102 36th Street, Los Angeles, CA 90018. We lease our main office and all of the properties on which we operate restaurants.
Biggest changeITEM 2. PROPERTIES As of December 28, 2025, we operated 281 restaurants. Our main office is located at 3102 36th Street, Los Angeles, CA 90018. We lease our main office and all of the properties on which we operate restaurants.
For additional information regarding the lease terms and provisions, see Note 9 in our audited consolidated financial statements contained elsewhere in this Annual Report on Form 10-K.
For additional information regarding the lease terms and provisions, see Note 8 in our audited consolidated financial statements contained elsewhere in this Annual Report on Form 10-K.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS We are subject to various claims, lawsuits, governmental investigations, and administrative proceedings that arise in the ordinary course of business. We do not believe that the ultimate resolution of any of these matters 52 Table of Contents will have a material effect on our financial position, results of operations, liquidity, or capital resources.
Biggest changeITEM 3. LEGAL PROCEEDINGS We are subject to various claims, lawsuits, governmental investigations, and administrative proceedings that arise in the ordinary course of business. We do not believe that the ultimate resolution of any of these matters will have a material effect on our financial position, results of operations, liquidity, or capital resources.
However, an increase in the number of these claims, or one or more successful claims under which we incur greater liabilities than we currently anticipate, could materially and adversely affect our business, financial position, results of operations, and cash flows. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 53 Table of Contents PART II
However, an increase in the number of these claims, or one or more successful claims under which we incur greater liabilities than we currently anticipate, could materially and adversely affect our business, financial position, results of operations, and cash flows. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 45 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStock Performance Graph The following performance graph shows a comparison from November 18, 2021 (the date our Class A common stock commenced trading on the New York Stock Exchange) through December 29, 2024, of the cumulative total return for our Class A common stock, the NYSE Composite Index, and the S&P 600 Restaurants Index. 54 Table of Contents November 18, 2021 December 26, 2021 June 26, 2022 December 25, 2022 June 25, 2023 December 31, 2023 June 30, 2024 December 29, 2024 Sweetgreen $ 100.00 $ 112.00 $ 47.61 $ 31.54 $ 38.86 $ 40.36 $ 107.64 $ 115.61 NYSE $ 100.00 $ 99.10 $ 86.53 $ 88.73 $ 90.37 $ 98.45 $ 105.31 $ 111.45 S&P Restaurant 600 Index $ 100.00 $ 97.51 $ 68.95 $ 76.42 $ 89.44 $ 88.75 $ 80.96 $ 103.08 This graph assumes an initial investment of $100 on November 18, 2021.
Biggest changeStock Performance Graph The following performance graph shows a comparison from November 18, 2021 (the date our Class A common stock commenced trading on the New York Stock Exchange) through December 28, 2025, of the cumulative total return for our Class A common stock, the NYSE Composite Index, and the S&P 600 Restaurants Index. 46 Table of Contents November 18, 2021 December 26, 2021 December 25, 2022 December 31, 2023 December 29, 2024 December 28, 2025 Sweetgreen, Inc. $ 100.00 $ 112.00 $ 31.54 $ 40.36 $ 115.61 $ 24.89 NYSE $ 100.00 $ 99.10 $ 88.73 $ 98.45 $ 111.45 $ 128.54 S&P Restaurant 600 Index $ 100.00 $ 97.51 $ 76.42 $ 88.75 $ 103.08 $ 87.02 This graph assumes an initial investment of $100 on November 18, 2021.
The number of record does not include persons who held shares of our Class A common stock in nominee or “street name” accounts through brokers. As of February 24, 2025, there were approximately 13 stockholders of record of our Class B common stock that are affiliated with our three founders.
The number of record does not include persons who held shares of our Class A common stock in nominee or “street name” accounts through brokers. As of February 23, 2026, there were approximately 13 stockholders of record of our Class B common stock that are affiliated with our three founders.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our Class A common stock is listed on the New York Stock Exchange under the symbol “SG.” Holders of Record As of February 24, 2025, there were approximately 525 stockholders of record of our Class A common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our Class A common stock is listed on the New York Stock Exchange under the symbol “SG.” Holders of Record As of February 23, 2026, there were approximately 455 stockholders of record of our Class A common stock.
The performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or Exchange Act. Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None .
The performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or Exchange Act. Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None . ITEM 6. [RESERVED] 47 Table of Contents
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Use of Proceeds On November 22, 2021, we closed our initial public offering (“IPO”), in which we sold 14,950,000 shares of our Class A common stock at a price of $28.00 per share. Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC acted as joint book-running managers for the offering.
Removed
All of the shares issued and sold in the IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-260472), which was declared effective by the SEC o n November 17, 2021.
Removed
We raised aggregate net proceeds of $384.7 million, after deducting underwriting discounts and commis sions of $26.4 million and offering costs of approximately $7.5 million subject to certain cost reimbursements. 55 Table of Contents There has been no material change in the planned use of proceeds from the IPO as described in our final prospectus dated November 17, 2021 and filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended, on November 19, 2021.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFor additional information, see Note 11 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. 65 Table of Contents Results of Operations Comparison of Fiscal Year 2024 and Fiscal Year 2023 The following table summarizes our results of operations for fiscal year 2024 and fiscal year 2023: Fiscal Year Ended (dollar amounts in thousands) December 29, 2024 December 31, 2023 Dollar Change Percentage Change Revenue $ 676,826 $ 584,041 $ 92,785 16 % Restaurant operating costs (exclusive of depreciation and amortization presented separately below): Food, beverage, and packaging 185,367 161,725 23,642 15 % Labor and related expenses 188,867 171,306 17,561 10 % Occupancy and related expenses 59,536 54,281 5,255 10 % Other restaurant operating costs 110,107 94,809 15,298 16 % Total cost of restaurant operations 543,877 482,121 61,756 13 % Operating expenses: General and administrative 149,942 146,762 3,180 2 % Depreciation and amortization 67,346 59,491 7,855 13 % Pre-opening costs 6,616 9,263 (2,647) (29 %) Impairment and closure costs 2,218 624 1,594 255 % Loss on disposal of property and equipment 255 687 (432) (63 %) Restructuring charges 2,276 7,437 (5,161) (69 %) Total operating expenses 228,653 224,264 4,389 2 % Loss from operations (95,704) (122,344) 26,640 (22 %) Interest income (10,942) (12,942) 2,000 (15 %) Interest expense 256 128 128 100 % Other expense 6,656 3,475 3,181 92 % Loss from operations before income taxes (91,674) (113,005) 21,331 (19 %) Income tax (benefit) expense (1,301) 379 (1,680) (443 %) Net loss $ (90,373) $ (113,384) $ 23,011 (20 %) Revenue Fiscal Year Ended (dollar amounts in thousands) December 29, 2024 December 31, 2023 Percentage Change Revenue $ 676,826 $ 584,041 16 % Average Unit Volume $ 2,924 $ 2,877 2 % Same-Store Sales Change 6% 4% 2 % The increase in revenue in fiscal year 2024 was primarily due to $64.5 million of incremental revenue associated with 60 Net New Restaurant Openings during fiscal years 2024 and 2023.
Biggest changeResults of Operations Comparison of Fiscal Year 2025 and Fiscal Year 2024 The following table summarizes our results of operations for fiscal year 2025 and fiscal year 2024: Fiscal Year Ended (dollar amounts in thousands) December 28, 2025 December 29, 2024 Dollar Change Percentage Change Revenue $ 679,474 $ 676,826 $ 2,648 0.4 % Restaurant operating costs (exclusive of depreciation and amortization presented separately below): Food, beverage, and packaging 193,678 185,367 8,311 4.5 % Labor and related expenses 196,571 188,867 7,704 4.1 % Occupancy and related expenses 65,417 59,536 5,881 9.9 % Other restaurant operating costs 120,277 110,107 10,170 9.2 % Total cost of restaurant operations 575,943 543,877 32,066 5.9 % Operating expenses: General and administrative 143,401 149,942 (6,541) (4.4 %) Depreciation and amortization 71,537 67,346 4,191 6.2 % Pre-opening costs 10,785 6,616 4,169 63.0 % Impairment and closure costs 12,065 2,218 9,847 444.0 % Loss on disposal of property and equipment 1,431 255 1,176 461.2 % Restructuring charges 3,630 2,276 1,354 59.5 % Total operating expenses 242,849 228,653 14,196 6.2 % Loss from operations (139,318) (95,704) (43,614) 45.6 % Interest income (6,548) (10,942) 4,394 (40.2 %) Interest expense 19 256 (237) (92.6 %) Other expense 1,230 6,656 (5,426) (81.5 %) Loss from operations before income taxes (134,019) (91,674) (42,345) 46.2 % Income tax expense (benefit) 46 (1,301) 1,347 (103.5 %) Net loss $ (134,065) $ (90,373) $ (43,692) 48.3 % 51 Table of Contents Revenue Fiscal Year Ended (dollar amounts in thousands) December 28, 2025 December 29, 2024 Percentage Change Revenue $ 679,474 $ 676,826 0.4 % Average Unit Volume $ 2,677 $ 2,924 (8.4 %) Same-Store Sales Change (7.9%) 6.2% (14.1 %) Revenue increased in fiscal year 2025 compared to fiscal year 2024, primarily due to $58.2 million of incremental revenue associated with 60 Net New Restaurant Openings during fiscal years 2025 and 2024.
Same-Store Sales Change Same-Store Sales Change reflects the percentage change in year-over-year revenue for the relevant fiscal period for all restaurants that have operated for at least 13 full fiscal months as of the end of such fiscal period excluding the 53rd week in any 53-week fiscal year; provided, that for any restaurant that has had a temporary closure (which historically has been defined as a closure of at least five days during which the restaurant would have otherwise been open) during any prior or current fiscal month, such fiscal month, as well as the 59 Table of Contents corresponding fiscal month for the prior or current fiscal year, as applicable, will be excluded when calculating Same-Store Sales Change for that restaurant.
Same-Store Sales Change Same-Store Sales Change reflects the percentage change in year-over-year revenue for the relevant fiscal period for all restaurants that have operated for at least 13 full fiscal months as of the end of such fiscal period excluding the 53rd week in any 53-week fiscal year; provided, that for any restaurant that has had a temporary closure (which historically has been defined as a closure of at least five days during which the restaurant would have otherwise been open) during any prior or current fiscal month, such fiscal month, as well as the corresponding fiscal month for the prior or current fiscal year, as applicable, will be excluded when calculating Same-Store Sales Change for that restaurant.
Investing activities in fiscal year 2024 consisted primarily of purchases of property and equipment of $84.5 million related to 25 gross new restaurant openings (excluding tenant improvement allowances), restaurants in process, renovations, and prepayments associated with the deployment of our Infinite Kitchen units and other restaurant-related equipment.
Investing activities in fiscal year 2024 consisted primarily of purchases of property and equipment of $84.5 million related to 25 gross new restaurant openings (excluding tenant improvement allowances), restaurants in process, renovations, and prepayments associated with the deployment of Infinite Kitchen units and restaurant-related equipment.
Fiscal year 2023 was a 53-week year, and in order to provide a measurement period that is consistent with comparable periods that span a 52-week year, rather than simply excluding the extra week, we applied an averaging methodology to the last period of fiscal 2023 to adjust for the extra week.
Fiscal year 2023 was a 53-week year, and in order to provide a measurement period that is consistent with comparable periods that span a 52-week year, rather than simply excluding the extra week, we applied an averaging methodology to the last period of fiscal 2023 to adjust for the extra week. Comparable Restaurant Base.
To adjust for this misalignment, in calculating Same-Store Sales Change for each fiscal quarter and the full fiscal year 2024, we shifted each week within fiscal year 2023 forward by one week to better align with the 2024 calendar year, specifically to match the timing of holidays and achieve a more accurate comparable Same-Store Sales Change to the prior period.
To adjust for this misalignment, in calculating Same- 50 Table of Contents Store Sales Change for each fiscal quarter and the full fiscal year 2024, we shifted each week within fiscal year 2023 forward by one week to better align with the 2024 calendar year, specifically to match the timing of holidays and achieve a more accurate comparable Same-Store Sales Change to the prior period.
At this time, we do not believe that there is a reasonable likelihood that there will be a material change in the future estimates or assumptions that we use to calculation our impairment charge.
At this time, we do not believe that there is a reasonable likelihood that there will be a material change in the future estimates or assumptions that we use to calculate our impairment charge.
Fiscal years 2024 and 2022 each contained 52 weeks. Fiscal year 2023 was a 53-week year with the extra operating week (the “53rd week”) falling in our fourth fiscal quarter.
Fiscal years 2025 and 2024 each contained 52 weeks. Fiscal year 2023 was a 53-week year with the extra operating week (the “53rd week”) falling in our fourth fiscal quarter.
Assumptions used in these forecasts are consistent with internal planning, and include revenue growth rates, gross margins, and operating expense in relation to the current economic environment and our incremental borrowing rate, future expectations, competitive factors in its various markets, inflation, revenue trends, market rents for the operating lease and other relevant economic factors that may impact the store under evaluation.
Assumptions used in these forecasts are consistent with internal planning, and include revenue growth rates, gross margins and operating expense in relation to the current economic environment, the discount rate, future expectations, competitive factors in its various markets, inflation, revenue trends, market rents for the operating lease and other relevant economic factors that may impact the store under evaluation.
(4) Our results for the fiscal year ended December 31, 2024 have been adjusted to reflect the temporary closures of 8 restaurants, which were excluded from the calculation of Same-Store Sales change.
Our results for the fiscal year ended December 29, 2024 have been adjusted to reflect the temporary closures of 8 restaurants, which were excluded from the calculation of Same-Store Sales change.
Fiscal year 2024 was a 52-week period that ended December 29, 2024, fiscal year 2023 was a 53-week period that ended December 31, 2023, and fiscal year 2022 was a 52-week period that ended December 25, 2022. In a 52-week fiscal year, each fiscal quarter includes 13 weeks of operations.
Fiscal year 2025 was a 52-week period that ended December 28, 2025, fiscal year 2024 was a 52-week period that ended December 29, 2024, and fiscal year 2023 was a 53-week period that ended December 31, 2023. In a 52-week fiscal year, each fiscal quarter includes 13 weeks of operations.
These adjustments d id not result in a material change to Same-Store Sales Change for 2024, 2023, or 2022. Total Digital Revenue Percentage and Owned Digital Revenue Percentage Our Total Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through our Total Digital Channels.
These adjustments d id not result in a material change to Same-Store Sales Change for 2025, 2024, or 2023. Total Digital Revenue Percentage and Owned Digital Revenue Percentage Our Total Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through all channels except Non-Digital transactions made through our In-Store Channel.
Fiscal Year Ended (dollar amounts in thousands) December 29, 2024 (1) December 31, 2023 (1) December 25, 2022 (1) Net New Restaurant Openings 25 35 36 Average Unit Volume (as adjusted) (2)(3) $ 2,924 $ 2,877 $ 2,905 Same-Store Sales Change (as adjusted) (%) (3)(4) 6% 4% 13% Total Digital Revenue Percentage 56% 59% 62% Owned Digital Revenue Percentage 30% 36% 41% (1) We operate on a 52/53 week fiscal year end that ends on the last Sunday of the calendar year.
Fiscal Year Ended (dollar amounts in thousands) December 28, 2025 (1) December 29, 2024 (1) December 31, 2023 (1) Net New Restaurant Openings 35 25 35 Average Unit Volume (as adjusted) (2)(3) $ 2,677 $ 2,924 $ 2,877 Same-Store Sales Change (as adjusted) (%) (3)(4) (7.9%) 6.2% 4.4% Total Digital Revenue Percentage 61.8% 56.4% 58.6% Owned Digital Revenue Percentage 34.6% 30.4% 36.4% (1) We operate on a 52/53 week fiscal year end that ends on the last Sunday of the calendar year.
We excluded one restaurant from the Comparable Restaurant Base as of the end of fiscal year 2024, no restaurants as of the end of fiscal year 2023, and two restaurants as of the end of fiscal year 2022. Such exclusions did not result in a material change to AUV.
Such exclusions did not result in a material change to AUV. No restaurants were excluded from the Comparable Restaurant Base as of the end of fiscal year 2023.
However, as a premium offering in the fast-casual industry, we are exposed both to consumers trading the convenience of food away from home for the cost benefit of cooking, and to consumers selecting less expensive fast-casual alternatives during weaker economic periods.
We continue to learn from these deployments and are incorporating our findings into future deployments. As a premium offering in the fast-casual industry, we are exposed both to consumers trading the convenience of food away from home for the cost benefit of cooking, and to consumers selecting less expensive fast-casual alternatives during weaker economic periods.
We recorded non-cash impairment charges of $1.7 million during fiscal year December 29, 2024 associated with’ one location, of which $1.3 million related to certain property and equipment and $0.4 million related to the 78 Table of Contents operating use asset .
We recorded non-cash impairment charges of $1.7 million during the fiscal year ended December 29, 2024 associated with one location, of which $1.3 million related to certain property and equipment and $0.4 million related to operating lease assets.
Other Expense Fiscal Year Ended (dollar amounts in thousands) December 29, 2024 December 31, 2023 Percentage Change Other expense $ 6,656 $ 3,475 92 % As a percentage of total revenue 1 % 1 % — % The change in other expense in fiscal year 2024 was primarily due to a change in the fair value of our contingent consideration compared to the prior year, which was issued as part of the Spyce acquisition in the third quarter of fiscal year 2021.
Other Expense Fiscal Year Ended (dollar amounts in thousands) December 28, 2025 December 29, 2024 Percentage Change Other expense $ 1,230 $ 6,656 (81.5 %) As a percentage of total revenue 0.2 % 1.0 % (0.8 %) Other expense decreased in fiscal year 2025 compared to fiscal year 2024, primarily due to a change in the fair value of our contingent consideration compared to the prior year, which was issued as part of the Spyce acquisition in the third quarter of fiscal year 2021.
Historically, our revenue has been lower in the first and fourth fiscal quarters of the year due, in part, to the holiday season and the fact that fewer people eat out during periods of inclement weather (generally the winter months, though inclement weather conditions may occur in certain markets at any time of the year) than during periods of mild to warm weather (the spring, summer, and fall months).
Historically, our revenue has been lower in the first and fourth fiscal quarters of the year due, in part, to the holiday season and inclement weather (generally the winter months, though inclement weather conditions may occur in certain markets at any time of the year).
We made the policy election to combine lease and non-lease components, and we also consider fixed common area maintenance (“CAM”) part of our fixed future lease payments. Fixed CAM is also included in our operating lease liability.
Operating lease liabilities represent the present value of lease payments not yet paid. We made the policy election to combine lease and non-lease components, and we also consider fixed CAM part of our fixed future lease payments. Fixed CAM is also included in our operating lease liability.
For fiscal year 2023 , cash provided by (used in) operating activities increased $69.6 million compared to fiscal year 2022, primarily due to a $54.1 million reduction in loss after excluding non-cash items, a $15.6 million favorable working capital fluctuation, which is primarily related to the timing of payroll and other payments in the ordinary course of business, and a $3.4 million receipt of our ERC.
For fiscal year 2024 , cash provided by operating activities increased $16.9 million compared to fiscal year 2023, primarily due to a $20.9 million reduction in net loss after excluding non-cash items and a $4.0 million favorable working capital fluctuation, which is primarily related to the timing of payroll and other payments in the ordinary course of business, offset by the $3.4 million receipt of Employee Retention Credit in fiscal year 2023.
During fiscal year 2024, we excluded eight restaurants from our Same-Store Sales Change, du ring fiscal year 2023, we excluded two rest aurants from our Same-Store Sales Change, and during fiscal year 2022, we excluded six restaurants from our Same-Store Sales Change.
During fiscal year 2025, we excluded 18 restaurants from our Same-Store-Sales Change, including 15 temporary closures and three permanent closures. During fiscal year 2024, we excluded eight restaurants from our Same-Store Sales Change, and du ring fiscal year 2023, we excluded two rest aurants from our Same-Store Sales Change.
In addition we had cash outflow for fiscal year 2024 of $7.7 million related to purchase of intangible assets. For fiscal year 2023, cash used in investing activities was $95.7 million, a decrease of $6.4 million compared to fiscal year 2022.
In addition, we had cash outflow for fiscal year 2025 of $7.8 million related to purchases of intangible assets. For fiscal year 2024, cash used in investing activities was $92.2 million, a decrease of $3.5 million compared to fiscal year 2023.
Our results for the fiscal year ended December 31, 2023 have been adjusted to reflect the temporary closures of two restaurants, which were excluded from the calculation of Same-Store Sales change. Our results for the fiscal year ended December 25, 2022, have been adjusted to reflect the temporary closures of 6 restaurants.
Our results for the fiscal year ended December 31, 2023 have been adjusted to reflect the temporary closures of two restaurants, which were excluded from the calculation of Same-Store Sales change. Such adjustments did not have a material impact on our Same-Store Sales Change for 2025, 2024, or 2023.
These key performance metrics and non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly titled metrics or measures presented by other companies.
These key performance metrics are presented for supplemental 49 Table of Contents informational purposes only, should not be considered a substitute for financial information presented in accordance with accounting principles generally accepted in the United States of America (“ GAAP”), and may be different from similarly titled metrics or measures presented by other companies.
Financing Activities For fiscal year 2024, cash (used in) provided by financing activities increased $14.1 million compared to fiscal year 2023, primarily due to the in crease in proceeds received from stock option exercises of $7.4 million and a $6.6 million decrease in Spyce milestone payments .
For fiscal year 2024, cash provided by financing activities increased $14.1 million compared to fiscal year 2023, primarily due to the $7.4 million in crease in proceeds received from stock option exercises, and a $6.6 million decrease in Spyce milestone payments . 57 Table of Contents Critical Accounting Estimates The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions.
Our primary liquidity and capital requirements are for new restaurant development, including related to deployment of our Infinite Kitchen, initiatives to improve the customer experience in our restaurants, research and development costs, marketing-related costs, working capital and general corporate needs.
Our primary liquidity and capital requirements are funding the current operations in our restaurants and Sweetgreen Support Center, new restaurant development, including the deployment of Infinite Kitchen technology, initiatives to improve the customer experience in our restaurants, and general corporate needs.
(2) As a result of material, temporary closures of certain stores during the applicable periods, we excluded one restaurant from the Comparable Restaurant Base as of the end of fiscal year 2024, no restaurants as of the end of fiscal year 2023, and two restaurants as of the end of fiscal year 2022.
(2) As a result of material, temporary closures of certain stores during the applicable periods, we excluded three restaurants from the Comparable Restaurant Base as of the end of fiscal year 2025 and one restaurant as of the end of fiscal year 2024. Such adjustments did not result in a material change to AUV.
We believe that these key performance metrics, which include certain non-GAAP financial measures, provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management team.
Key Performance Metrics We track the following key performance metrics to evaluate our performance, identify trends, formulate financial projections, and make strategic decisions. We believe that these key performance metrics provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management team.
For fiscal year 2022, cash used in investing activities was $102.0 million. Investing activities in fiscal year 2022 consisted primarily of purchases of property and equipment of $96.9 million related to 39 gross new restaurant openings (excluding tenant improvement allowances), restaurants in process, renovations, and prepayments associated with restaurant-related equipment.
Investing activities in fiscal year 2025 consisted primarily of purchases of property and equipment of $106.5 million related to 39 gross new restaurant openings (excluding tenant improvement allowances), restaurants in process, renovations, and prepayments associated with the deployment of Infinite Kitchen units and other restaurant-related equipment.
For fiscal year 2023, cash (used in) provided by financing activities increased $9.8 million compared to fiscal year 2022, primarily due to the $10.4 million Spyce milestone true-up payment, offset by an in crease in proceeds received from stock option exercises of $0.6 million.
Financing Activities For fiscal year 2025, cash provided by financing activities decreased $6.0 million compared to fiscal year 2024, primarily due to the $9.6 million de crease in proceeds received from stock option exercises, partially offset by the $3.9 million Spyce milestone payment made in 2024 .
Our bold vision is to be as ubiquitous as traditional fast food, but with the transparency and quality that consumers increasingly expect. As of December 29, 2024, we owned and operated 246 restaurants in 22 states and Washington, D.C.
Our bold vision is to be as ubiquitous as traditional fast food, but with the transparency and quality that consumers increasingly expect. As of December 28, 2025, we owned and operated 281 restaurants in 24 states and Washington, D.C. Opening new restaurants, including those with Infinite Kitchen technology, is an important driver of our revenue growth.
For further information, see Note 1 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Leases We determine if a contract contains a lease at inception. Our material operating leases consist of restaurant locations and office space.
Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations. For further information, see Note 1 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Leases We determine if a contract contains a lease at inception.
Additionally, our operations do not require significant inventories due, in part, to our use of numerous fresh ingredients. Additionally, we are able to sell most of our inventory items before payment is due to the supplier of such items.
Additionally, we are able to sell most of our inventory items before payment is due to the supplier of such items.
The following table presents our material cash requirements for future periods: (in thousands) Total 2025 2026 2027 2028 2029 Thereafter Operating leases (1) $ 427,655 61,431 $ 61,647 $ 58,124 $ 52,188 $ 50,261 $ 144,004 (1) See Note 8 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
The following table presents our material cash requirements for future periods: (in thousands) Total 2026 2027 2028 2029 2030 Thereafter Operating leases (1) $ 459,829 $ 63,503 $ 68,070 $ 62,745 $ 61,179 $ 55,319 $ 149,013 (1) See Note 8 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
In addition, we had a cash outflow for fiscal year 2022 of $5.4 million related to purchase of intangibles assets.
In addition, we had cash outflow for fiscal year 2024 of $7.7 million related to purchases of intangible assets.
Interest Income and Interest Expense Fiscal Year Ended (dollar amounts in thousands) December 29, 2024 December 31, 2023 Percentage Change Interest income $ (10,942) $ (12,942) (15 %) Interest expense 256 128 100 % Total income expense (10,686) (12,814) (17 %) As a percentage of total revenue (2) % (2) % — % The decrease in interest income, net, was primarily due to a lower cash balance in our money market accounts during fiscal year 2024 as compared to fiscal year 2023.
Interest Income and Interest Expense 54 Table of Contents Fiscal Year Ended (dollar amounts in thousands) December 28, 2025 December 29, 2024 Percentage Change Interest income $ (6,548) $ (10,942) (40.2 %) Interest expense 19 256 (92.6 %) Total interest income, net $ (6,529) $ (10,686) (38.9 %) As a percentage of total revenue (1.0) % (1.6) % 0.6 % Interest income, net decreased in fiscal year 2025 compared to fiscal year 2024, primarily due to a lower cash balance and lower interest rate in our money market accounts during fiscal year 2025 as compared to fiscal year 2024.
Any material changes in the sum of our undiscounted cash flow estimates resulting from different assumptions used as of December 29, 2024 for those store asset groups included in our evaluation could result in a material change in the long-lived asset impairment charge for fiscal year 2024.
Additionally, for corporate-level corporate assets for operating lease assets, assumptions used include monthly market rent, annual rent increases, cash flow period, free rent period, estimated tenant improvements and discount rate. 58 Table of Contents Any material changes in the sum of our undiscounted cash flow estimates resulting from different assumptions used as of December 28, 2025 for those store asset groups included in our evaluation could result in a material change in the long-lived asset impairment charge for fiscal year 2025.
In addition, a core part of our menu, salads, has proven to be more popular among consumers in the warmer months. In recent years, as consumer behavior trends have changed, due in part to the emergence of hybrid or remote work environments, the seasonality in our business has been less predictable than in prior years.
In addition, a core part of our menu, salads, has proven to be more popular among consumers in the warmer months . In recent years, the prevalence of hybrid and remote work arrangements have made seasonality in our business less predictable, and we have experienced negative revenue impacts around national holidays.
Investing Activities For fiscal year 2024, cash used in investing activities was $92.2 million, a decrease of $3.5 million compared to fiscal year 2023.
Investing Activities For fiscal year 2025, cash used in investing activities was $114.3 million, an increase of $22.0 million compared to fiscal year 2024.
If the estimate of our reasonably certain lease term were changed, our rent expense could differ materially. Operating lease assets and liabilities are recognized at time of lease inception. Operating lease liabilities represent the present value of lease payments not yet paid.
Generally, the lease term is the minimum of the noncancelable period of the lease or the lease term inclusive of reasonably certain renewal periods up to a term of 20 years. If the estimate of our reasonably certain lease term were changed, our rent expense could differ materially. Operating lease assets and liabilities are recognized at time of lease inception.
The measure of AUV allows us to assess changes in guest traffic and per transaction patterns at our restaurants.
Average Unit Volume AUV is defined as the average trailing revenue for the prior four fiscal quarters for all restaurants in the Comparable Restaurant Base. The measure of AUV allows us to assess changes in guest traffic and per transaction patterns at our restaurants.
Our leases generally have remaining terms of one to ten years and most include options to extend the leases for additional five-year periods. Generally, the lease term is the minimum of the noncancelable period of the lease or the lease term inclusive of reasonably certain renewal periods up to a term of 20 years.
Our material operating leases consist of restaurant locations and office space. Our leases generally have remaining terms of one to ten years and most include options to extend the leases for additional five-year periods.
In a 53-week fiscal year, the first, second, and third fiscal quarters each include 13 weeks of operations, and the fourth fiscal quarter includes 14 weeks of operations. Fiscal year 2024, 2023, and 2022 results for AUV and Same-Store Sales Change have been adjusted.
In a 53-week fiscal year, the first, second, and third fiscal quarters each include 13 weeks of operations, and the fourth fiscal quarter includes 14 weeks of operations. A discussion regarding our financial condition and results of operations for the year ended December 28, 2025, compared to the year ended December 29, 2024, is presented below.
See Note 3 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details. We have not required significant working capital because customers generally pay using cash or credit and debit cards and, as a result, our operations do not require significant receivables.
We have not required significant working capital because customers generally pay using cash or credit and debit cards and, as a result, our operations do not result in significant receivables. Additionally, our operations do not require significant inventories due, in part, to our use of numerous fresh ingredients.
Our most significant estimates and judgments involve difficult, subjective, or complex judgements made by management. Actual results may differ from these estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.
To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected. We believe that the accounting policies described below involve a greater degree of judgment and complexity.
Impairment and Closure Costs Fiscal Year Ended (dollar amounts in thousands) December 29, 2024 December 31, 2023 Percentage Change Impairment and closure costs $ 2,218 $ 624 255 % As a percentage of total revenue — % — % — % During fiscal year 2024 we recognized non-cash impairment charges and closure costs of $2.2 million, primarily related to the impairment of one restaurant’s property and equipment and the related operating lease asset.
Impairment and Closure Costs Fiscal Year Ended (dollar amounts in thousands) December 28, 2025 December 29, 2024 Percentage Change Impairment and closure costs $ 12,065 $ 2,218 444.0 % As a percentage of total revenue 1.8 % 0.3 % 1.4 % Impairment and closure costs on a dollar basis increased during fiscal year 2025 compared to fiscal year 2024, primarily due to non-cash impairment charges related to property and equipment and the related operating lease assets of twelve of our restaurants compared to one restaurant in the prior year, as well as closure costs associated with three stores that were impaired and closed during fiscal year 2025.
During the fiscal year ended December 29, 2024, we made a cash payment of approximately $3.9 million related to the Spyce milestone payment, which was included within contingent consideration in our consolidated balance sheets for the fiscal year ended December 31, 2023.
During the fiscal year ended December 28, 2025, we made a cash payment of approximately $2.3 million related to the second Spyce milestone payment.
Cash Flows The following table summarizes our cash flows for the periods indicated: Fiscal Year Ended (in thousands) December 29, 2024 December 31, 2023 December 25, 2022 Net cash provided by (used in) operating activities 43,390 26,480 (43,169) Net cash used in investing activities (92,211) (95,665) (102,023) Net cash (used in) provided by financing activities 8,895 (5,199) 4,632 Net increase (decrease) in cash and cash equivalents and restricted cash $ (39,926) $ (74,384) $ (140,560) 76 Table of Contents Operating Activities For fiscal year 2024, cash provided by (used in) operating activities increased $16.9 million compared to fiscal year 2023, primarily due to a $20.9 million reduction in net loss after excluding non-cash items and a $4.0 million favorable working capital fluctuation, which is primarily related to the timing of payroll and other payments in the ordinary course of business, offset by the $3.4 million receipt of ERC in fiscal year 2023.
As of December 28, 2025 and December 29, 2024, we had no outstanding debt obligations. 56 Table of Contents Cash Flows The following table summarizes our cash flows for the periods indicated: Fiscal Year Ended (in thousands) December 28, 2025 December 29, 2024 December 31, 2023 Net cash (used in) provided by operating activities $ (12,696) $ 43,390 $ 26,480 Net cash used in investing activities (114,251) (92,211) (95,665) Net cash provided by (used in) financing activities 2,861 8,895 (5,199) Net decrease in cash and cash equivalents and restricted cash $ (124,086) $ (39,926) $ (74,384) Operating Activities For fiscal year 2025, cash used in operating activities increased $56.1 million compared to fiscal year 2024.
Such adjustments did not result in a material change to AUV. (3) For fiscal year 2023, Average Unit Volume and Same-Store Sales Change were adjusted to exclude the 53rd week of operations.
No restaurants were excluded as of the end of fiscal year 2023. (3) For fiscal year 2023, Average Unit Volume and Same-Store Sales Change were adjusted to exclude the 53rd week of operations for comparative purposes. See below under “Average Unit Volume” and “Same-Store Sales Change” additional details.
We have seen an increase and prolonged negative impact on our revenue around national holidays. Additionally, we have seen extreme weather conditions and natural disasters, such as the wild fires in Los Angeles, cause disruptions to our operations and impact to our first quarter 2025 results.
Additionally, we have seen extreme weather conditions and natural disasters cause disruptions to our operations from time to time, including the wildfires in Los Angeles, which impacted our fiscal year 2025 results.
We continue to see variability in our customer traffic patterns, including as a result of fluctuations in return to office as a result of many workplaces adopting remote or hybrid models and we expect this variability to continue for the foreseeable future.
There can be no assurance that we will be able to continue this practice in the current or future macroeconomic or regulatory environment. We also continue to see variability in our customer traffic patterns, including as a result of many workplaces adopting remote or hybrid models, which has shifted sales away from our In-Store Channel.
Loss on Disposal of Property and Equipment Fiscal Year Ended (dollar amounts in thousands) December 29, 2024 December 31, 2023 Percentage Change Loss on disposal of property and equipment $ 255 $ 687 (63 %) As a percentage of total revenue — % — % — % The decrease in loss on disposal of property and equipment was due to the timing of furniture, equipment, and fixture replacements at multiple restaurants, in addition to a fleet-wide replacement of kitchen equipment with more cost efficient items in fiscal year 2023 as compared to fiscal year 2024.
Loss on Disposal of Property and Equipment Fiscal Year Ended (dollar amounts in thousands) December 28, 2025 December 29, 2024 Percentage Change Loss on disposal of property and equipment $ 1,431 $ 255 461.2 % As a percentage of total revenue 0.2 % — % 0.2 % Loss on disposal of property and equipment increased in fiscal year 2025 compared to fiscal year 2024, primarily attributable to the disposal of specialized kitchen equipment.
Operating Expenses General and Administrative Fiscal Year Ended (dollar amounts in thousands) December 31, 2023 December 25, 2022 Percentage Change General and administrative $ 146,762 $ 187,367 (22 %) As a percentage of total revenue 25 % 40 % (15 %) The decrease in general and administrative expenses for fiscal year 2023 was primarily due to a $29.2 million decrease in stock-based compensation expense, a $5.2 million decrease in management salaries and benefits, including bonus, the benefit of $5.1 million of ERC, and a $1.6 million decrease in liability insurance.
Operating Expenses General and Administrative Fiscal Year Ended (dollar amounts in thousands) December 28, 2025 December 29, 2024 Percentage Change General and administrative $ 143,401 $ 149,942 (4.4 %) As a percentage of total revenue 21.1 % 22.2 % (1.0 %) General and administrative expenses on a dollar basis decreased in fiscal year 2025 compared to fiscal year 2024, primarily due to a $4.6 million decrease in bonus expense due to performance, as well as a $2.5 million decrease in stock-based compensation expense, primarily related to the decrease in expenses associated with restricted stock units and performance-based restricted stock units issued prior to our IPO.
As a percentage of revenue, general and administrative expenses for fiscal year 2024 decreased from fiscal year 2023, primarily due to the fluctuations noted above, as well as comparatively higher revenue in the current period.
These decreases were partially offset by an increase in other expenses across the Sweetgreen Support Center to support our restaurant growth. As a percentage of revenue, general and administrative expenses for fiscal year 2025 decreased compared to fiscal year 2024, primarily due to the net effect of the fluctuations noted above.
Pre-Opening Costs Fiscal Year Ended (dollar amounts in thousands) December 29, 2024 December 31, 2023 Percentage Change Pre-opening costs $ 6,616 $ 9,263 (29 %) As a percentage of total revenue 1 % 2 % (1 %) The decrease in pre-opening costs for fiscal year 2024 was primarily due to 25 gross new restaurant openings in 2024 compared to 38 gross restaurant openings in 2023.
Depreciation and Amortization Fiscal Year Ended (dollar amounts in thousands) December 28, 2025 December 29, 2024 Percentage Change Depreciation and amortization $ 71,537 $ 67,346 6.2 % As a percentage of total revenue 10.5 % 10.0 % 0.6 % As a percentage of revenue, depreciation and amortization for fiscal year 2025 increased compared to fiscal year 2024, primarily related to the increase in the total depreciable base, driven by our acceleration of new restaurant growth in fiscal year 2025 as well as the change in sales volume. 53 Table of Contents Pre-Opening Costs Fiscal Year Ended (dollar amounts in thousands) December 28, 2025 December 29, 2024 Percentage Change Pre-opening costs $ 10,785 $ 6,616 63.0 % As a percentage of total revenue 1.6 % 1.0 % 0.6 % As a percentage of revenue, pre-opening costs for fiscal year 2025 increased compared to fiscal year 2024 due to the acceleration of net new restaurant growth as well as the change in sales volume.
Other Restaurant Operating Costs Fiscal Year Ended (dollar amounts in thousands) December 29, 2024 December 31, 2023 Percentage Change Other restaurant operating costs $ 110,107 $ 94,809 16 % As a percentage of total revenue 16 % 16 % — % The increase in other restaurant operating costs for fiscal year 2024 was primarily due to the 60 Net New Restaurant Openings during fiscal years 2023 and 2024.
Other Restaurant Operating Costs Fiscal Year Ended (dollar amounts in thousands) December 28, 2025 December 29, 2024 Percentage Change Other restaurant operating costs $ 120,277 $ 110,107 9.2 % As a percentage of total revenue 17.7 % 16.3 % 1.4 % As a percentage of revenue, other restaurant operating costs during fiscal year 2025 increased compared to fiscal year 2024, primarily due to lower sales volume, as well as increases in restaurant-level advertising spend, catering fees, and repairs and maintenance for existing stores.
Such adjustments did not have a material impact on our Same-Store Sales Change for 2024, 2023, or 2022. Net New Restaurant Openings Net New Restaurant Openings reflect the number of new Sweetgreen restaurant openings during a given reporting period, net of any permanent Sweetgreen restaurant closu res during the same given period.
Net New Restaurant Openings Net New Restaurant Openings reflect the number of new Sweetgreen restaurant openings during a given reporting period, net of any permanent Sweetgreen restaurant closu res during the same given period. Before we open new restaurants, we incur pre-opening costs.
For additional information, see Note 3 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. The initial fair value of the liability for the contingent consideration was $16.4 million and was included as part of the purchase price for the Spyce acquisition.
The remaining $7.0 million was paid out in January 2026 and is included within other current liabilities within the consolidated balance sheets as of December 28, 2025. See Notes 3 and 16 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details.
Critical Accounting Estimates The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of revenue and expenses during the reporting period.
These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of revenue and expenses during the reporting period. Our most significant estimates and judgments involve difficult, subjective, or complex judgments made by management. Actual results may differ from these estimates.
Sales Channel Mix Our revenue is derived from sales of food and beverage to customers through our five sales channels: In-Store Channel, Pick-Up Channel, Native Delivery Channel, Marketplace Channel, and Outpost and Catering Channel. There have been historical fluctuations in the mix of sales between our various channels.
Sales Channel Mix Our revenue is derived from sales of food and beverage to customers through our five sales channels. We own and operate all of these channels other than our Marketplace Channel, which is operated by various third-party delivery marketplaces. 1. In-Store Channel. Sales to customers who make in-store purchases in our restaurants.
During fiscal year 2024, stemming from the Plan, we recorded restructuring charges of $2.3 million primarily related to the amortization of the underlying operating lease asset and related real estate and CAM charges for our vacated former Sweetgreen Support Center.
Restructuring charges Fiscal Year Ended (dollar amounts in thousands) December 28, 2025 December 29, 2024 Percentage Change Restructuring charges $ 3,630 $ 2,276 59.5 % As a percentage of total revenue 0.5 % 0.3 % 0.2 % Restructuring charges for both fiscal years 2025 and 2024 are primarily related to our former Sweetgreen Support Center, which we vacated in fiscal year 2022, including continued amortization of the operating lease asset and related real estate and common area maintenance (“ CAM”) charges.
The increase in revenue was also impacted by an increase in Comparable Restaurant Base revenue of $34.8 million, resulting in a positive Same-Store Sales Change of 6%, consisting of a 4% benefit from menu price increases and a 2% increase due to traffic and favorable product mix.
This was partially offset by a decrease in Comparable Restaurant Base revenue of $53.0 million, resulting in a negative Same-Store Sales Change of 7.9%, primarily reflecting a 10.4% decrease in traffic, partially offset by a 2.5% benefit from menu price increases. Traffic softness reflected a more selective consumer environment and the transition from our former Sweetpass+ program to SG Rewards.
These increases were partially offset by $6.4 million of additional revenue recognized in fiscal year 2023 resulting from the 53rd week. 66 Table of Contents Restaurant Operating Costs Food, Beverage, and Packaging Fiscal Year Ended (dollar amounts in thousands) December 29, 2024 December 31, 2023 Percentage Change Food, beverage, and packaging $ 185,367 $ 161,725 15 % As a percentage of total revenue 27% 28% (1 %) The increase in food, beverage, and packaging costs for fiscal year 2024 was primarily due to a $24.6 million increase in food and beverage costs, primarily due to the 60 Net New Restaurant Openings during fiscal years 2024 and 2023, and higher protein cost.
Restaurant Operating Costs Food, Beverage, and Packaging Fiscal Year Ended (dollar amounts in thousands) December 28, 2025 December 29, 2024 Percentage Change Food, beverage, and packaging $ 193,678 $ 185,367 4.5 % As a percentage of total revenue 28.5% 27.4% 1.1 % As a percentage of revenue, food, beverage, and packaging costs in fiscal year 2025 increased compared to fiscal year 2024, primarily driven by higher protein costs resulting from higher overall ingredient usage and waste, including increased chicken and tofu portions, higher ingredient and packaging costs related to recently imposed tariffs and duties, as well as a one time write-off of discontinued materials.
With the introduction of beef on our menu, we have experienced and could continue to experience an increase in commodity costs. Seasonality Our revenue fluctuates as a result of seasonal factors and weather conditions.
Seasonality and Quarterly Financial Data Our revenue fluctuates as a result of seasonal factors and weather conditions.
We are still in the very nascent stages of our journey, and one of our greatest immediate opportunities is to grow our footprint in both existing and new U.S. markets and, over time, internationally.
In fiscal years 2025, 2024, and 2023, we had 35, 25, and 35 Net New Restaurant Openings. One of our strategies is to grow our footprint in both existing and new U.S. markets and, over time, internationally. As of the end of fiscal year 2025, we utilized the Infinite Kitchen, a kitchen automation technology in 30 of our 281 restaurants.
During fiscal year 2022, we recognized non-cash impairment charges of $2.0 million related to the property and equipment of three of our restaurants and non-cash impairment charges of $0.4 million related to the operating lease assets of three of our restaurants, as well as $0.1 million of closure costs related to one store previously operated by Spyce.
We recorded non-cash impairment charges of $11.3 million during fiscal year December 28, 2025 associated with twelve store locations, of which $9.7 million related to certain property and equipment and $1.6 million related to operating lease assets.
Occupancy and Related Expenses Fiscal Year Ended (dollar amounts in thousands) December 29, 2024 December 31, 2023 Percentage Change Occupancy and related expenses $ 59,536 $ 54,281 10 % As a percentage of total revenue 9 % 9 % — % The increase in occupancy and related expenses for fiscal year 2024 was primarily due to the 60 Net New Restaurant Openings during fiscal years 2023 and 2024, partially offset by reduced occupancy rates across recently opened stores. 67 Table of Contents As a percentage of revenue , occupancy and related expenses for fiscal year 2024 was slightly below the prior year primarily due to higher revenue in the current year as well as reduced occupancy rates, as discussed above.
Labor and Related Expenses Fiscal Year Ended (dollar amounts in thousands) December 28, 2025 December 29, 2024 Percentage Change Labor and related expenses $ 196,571 $ 188,867 4.1 % As a percentage of total revenue 28.9% 27.9% 1.0 % As a percentage of revenue, labor and related expenses for fiscal year 2025 increased compared to fiscal year 2024, primarily due to deleverage from lower sales volume as well as wage inflation, partially offset by menu price increases. 52 Table of Contents Occupancy and Related Expenses Fiscal Year Ended (dollar amounts in thousands) December 28, 2025 December 29, 2024 Percentage Change Occupancy and related expenses $ 65,417 $ 59,536 9.9 % As a percentage of total revenue 9.6 % 8.8 % 0.8 % As a percentage of revenue, occupancy and related expenses for fiscal year 2025 increased compared to fiscal year 2024, primarily driven by deleverage associated with the change in sales volume.
Our Owned Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through our Owned Digital Channels. In recent years, we have experienced a reduction in our Owned Digital Revenue Percentage and our Total Digital Revenue percentage, which we believe is due to the continuing recovery of our In-Store Channel and growth in third party marketplace.
Our Owned Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through our Owned Digital Channels, which include our Pick-Up Channel, Native Delivery Channel, Outpost and Catering Channel (excluding catering orders placed through third-party platforms), and purchases made in our In-Store Channel via digital scan-to-pay, or digital scan-to-earn and scan-to-redeem associated with our SG Rewards loyalty program.
Income Tax Expense Fiscal Year Ended (dollar amounts in thousands) December 31, 2023 December 25, 2022 Percentage Change Income tax expense $ 379 $ 1,345 (72 %) As a percentage of total revenue — % — % — % Our effective tax rate for the fiscal years ended 2023 and 2022 was (0.3%) and (0.7%), respectively, primarily due to the full valuation allowance on our net deferred tax assets 75 Table of Contents Liquidity and Capital Resources Sources and Material Cash Requirements To date, we have funded our operations through proceeds received from previous common stock and preferred stock issuances, our ability to obtain lending commitments and through cash flow from operations.
Income Tax Expense (Benefit) Fiscal Year Ended (dollar amounts in thousands) December 28, 2025 December 29, 2024 Percentage Change Income tax expense (benefit) $ 46 $ (1,301) (103.5 %) Effective income tax rate — % 1.4 % (1.4 %) Our effective income tax rates for the fiscal years ended 2025 and 2024 were —% and 1.4%, respectively, primarily due to the full valuation allowance on our net deferred tax assets.
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See the subsections titled “—Key Performance Metrics” and “—Quarterly Results of Operations” for more information, including a description of the adjustments made to, and the unadjusted values for, AUV and Same-Store Sales Change for the periods presented. Overview We are a mission-driven, next generation restaurant and lifestyle brand that serves healthy food at scale.
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A discussion regarding our financial condition and results of operations for the year ended December 29, 2024, compared to the year ended December 31, 2023, can be found in Item 7.
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Factors Affecting Our Business Expanding Restaurant Footprint Opening new restaurants, including those with Infinite Kitchen technology, is an important driver of our revenue growth. In fiscal years 2024, 2023, and 2022, we had 25, 35, and 36 Net New Restaurant Openings, respectively, bringing our total count as of December 29, 2024 to 246 restaurants in 22 states and Washington, D.C.
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“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 29, 2024, filed with the SEC on February 27, 2025. Overview We are a mission-driven, next generation restaurant and lifestyle brand that serves healthy food at scale.
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Real Estate Selection We utilize a rigorous, data-driven real estate selection process to identify the location and timing of opening new restaurants, both in new and existing U.S. markets and in urban and suburban areas, with high anticipated foot or vehicle traffic and proximity to workplaces, residences and other restaurant and retail businesses that support our multi-channel approach, including our Native Delivery, Marketplace Delivery, and Outpost and Catering Channels.
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We incorporate the Infinite Kitchen technology into new and existing restaurants based, in large part, upon our evaluation of the potential economic and other benefits for those restaurants. We deployed units of the Infinite Kitchen in 18 of our new restaurants during fiscal year 2025 and 10 of our restaurants during fiscal year 2024.
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Macroeconomic Conditions, Inflation, and Supply Chain Constraints Consumer spending on food outside the home fluctuates with macroeconomic conditions. Consumers tend to allocate higher spending to food outside the home when macroeconomic conditions are stronger, and reduce spending on food outside the home during weaker economies.
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We have been impacted by a decrease in consumer spending during fiscal year 2 025, which we expect to continue at least in the near term. As we focus on discipline with respect to costs and allocation of capital in connection with the Sweet Growth Transformation Plan, we will be opening fewer restaurants in the near term.
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Our customers have in the past demonstrated a willingness to pay a premium for a craveable, convenient, and healthier alternative to traditional fast-food and 57 Table of Contents fast-casual offerings.
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In fiscal year 2026, we expect approximately 15 Net New Restaurant Openings, with about half featuring Infinite Kitchen units. We have historically been able to partially offset rising costs - including inflation, tariffs, wage increases and increases in cost of goods sold - through gradual menu price increases, customer service and delivery fees, and operational efficiencies .
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While we have historically been able to partially offset inflation and other increases in the costs of core operating resources, such as wage increases and increases in cost of goods sold, by gradually increasing menu prices or other customer fees, such as service fees and delivery fees, coupled with more efficient purchasing practices, productivity improvements, and greater economies of scale, there can be no assurance that we will be able to continue to do so in the current macroeconomic environment or regulatory environment or in the future.
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Our Native Delivery, Outpost and Catering, and Marketplace Channels carry 48 Table of Contents higher costs due to third-party fees, elevated refund rates, and promotional activity, and a continued shift in sales mix toward these channels could pressure margins. However, we expect margins on these channels to improve over time as we achieve greater scale.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeChanging Interest Rates We are exposed to interest rate risk through fluctuations of interest rates on our investments through our cash in our money market accounts. Changes in interest rates affect the interest income we earn, and therefore impact our cash flows and results of operations.
Biggest changeChanges in interest rates affect the interest income we earn, and therefore impact our cash flows and results of operations.
Due to the short-term nature of our investments, we have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates. A hypothetical 10% change in interest rates would not have had a material impact on our results of operations for fiscal years 2024 and 2023.
Due to the short-term nature of our investments, we have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates. A hypothetical 10% change in interest rates would not have had a material impact on our results of operations for fiscal years 2025 and 2024.
Many of the ingredients we use to prepare our food, as well as our packaging materials and utilities to run our restaurants, are ingredients or commodities that are affected by the price of other commodities, exchange rates, inflation, foreign demand, weather, seasonality, production, availability and other factors outside our control.
Many of the ingredients we use to prepare our food, as well as our packaging materials and utilities to run our restaurants, are ingredients or commodities that are affected by the price of other commodities, exchange rates, inflation, foreign demand, weather, trade tariffs, seasonality, production, availability and other factors outside our control.
We have tried to increase, where practical, the number of suppliers for our ingredients, which we believe can help mitigate pricing volatility, and we follow industry news, trade issues, exchange rates, foreign demand, weather, crises, and other world events that may affect our ingredient prices.
We have tried to increase, where practical, the number of suppliers for our ingredients, which we believe can help mitigate pricing volatility, and we follow industry news, trade issues, exchange rates, f oreign demand, weather, crises, and other world events that may affect our ingredient prices.
Due to the recent pace of inflation and other global supply chain risks, including extreme weather conditions, suppliers and distributors have, and could continue to, attempt to renegotiate our existing contracts to increase prices, as well as assess certain fuel surcharges. These changes could have a negative impact on our 79 Table of Contents commodity prices.
Due to the recent pace of inflation and other global supply chain risks, including extreme weather conditions, suppliers and distributors have renegotiated, and could continue to attempt to renegotiate, our existing contracts to increase prices, as well as assess certain fuel surcharges. These changes could have a negative impact on our commodity prices.
As of December 29, 2024 and December 31, 2023, we ha d $214.8 million and $257.2 million of cash and cash equivalents, respectively, consisting of bank accounts and money market funds, and $2.6 million and $0.1 million, respectively, o f restricted cash relating to certificates of deposit that are collateral for letters of credit to our lease agreements and cash from the Spyce acquisition.
As of December 28, 2025 and December 29, 2024, we ha d $89.2 million and $214.8 million of cash and cash equivalents, respectively, consisting of bank accounts and money market funds, and $4.2 million and $2.6 million, respectively, o f restricted cash relating to certificates of deposit that are collateral for letters of credit to our lease agreements.
Macroeconomic conditions also negatively impact consumer discretionary spending and could negatively impact our Restaurant Level Profit. 80 Table of Contents
Macroeconomic conditions also negatively impact consumer discretionary spending and have negatively impacted our Restaurant Level Profit and results of operations in recent periods. 60 Table of Contents
Additionally, since the beginning of 2023, we have been experiencing supply chain disruptions for our bowls and plates which has resulted in use of alternative packaging solutions. We continue to assess the current environment, work with our suppliers and distributors and create certain contingency plans to mitigate any negative impact.
Additionally, since the beginning of 2023, we have been experiencing supply chain disruptions for our bowls and plates which has resulted in use of alternative packaging solutions.
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We continue to assess the current environment, work with our suppliers and distributors and create certain contingency plans to mitigate any negative impact. 59 Table of Contents Changing Interest Rates We are exposed to interest rate risk through fluctuations of interest rates on our investments through our cash in our money market accounts.

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