Sweetgreen has been losing millions selling $16 salads — maybe fries will help it turn a profit?
The fast-casual lunch spot is making ripples with its latest launch, but the company’s profit margins still aren’t in the green.
Having shot to office worker lunch fame off the back of premium salad offerings, Sweetgreen has just addressed a burning question belying its usual bowls of shredded kale and herbed quinoa: do you want fries with that?
On Tuesday, the salad maker announced the launch of “Ripple Fries,” an air-fried (read: rapidly baked) potato product made with only five simple ingredients, described by Sweetgreen as “a fresh take on a fast food staple.” Indeed, Sweetgreen’s fries notch only 240 calories per portion — around 161 fewer calories than the same weighted amount of McDonald’s fries.
But will the humble french fry finally be what tips Sweetgreen into profitability, something that even robot chefs and steak salads have yet to achieve thus far?
Potayto, potahto
Sweetgreen’s annual report for fiscal year 2024, which disappointed investors last week, showed that despite some of its base menu items touching nearly $18 and the company’s revenues soaring to $677 million (up 16% year on year), the fast-casual restaurant chain still made a ~$90 million net loss. To put this into perspective, by indexing Sweetgreen’s earnings to $16, roughly the average cost of a meal item at the chain, you can see that the company lost about $2.26 for each typical salad it sold in 2024.
Still, it might take something of a bigger fry to impress investors: Sweetgreen was down almost 1% after the announcement at yesterday’s close, adding to what has been a miserable month for the stock, which has shed 34% of its value since early February.
Girl dinner… Sweetgreen might have been inspired by one of last summer’s viral food trends for its frites dispatch. Online hype surrounding the “ultimate girl dinner” — namely a Caesar salad, fries, and a Diet Coke — saw TikTok posts featuring these items rocket to over 60 million in total last June.
