What Happened?
Shares of casual salad chain Sweetgreen (NYSE:SG) fell 6.4% in the afternoon session after markets remained anxious about the negative impact of tariffs, with concerns intensifying following new updates from the Trump administration. Treasury Secretary Scott Bessent noted on CNBC, "We're focused on the real economy.... I'm not concerned about a little bit of volatility over three weeks." Adding to the concerns, President Trump announced on Truth Social that his administration was considering imposing a 200% tariff on all alcoholic beverages imported from European Union countries. This move was in response to the EU's 50% tariff on whisky. Trump added, "This will be great for the Wine and Champagne businesses in the U.S."
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Sweetgreen? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Sweetgreen’s shares are extremely volatile and have had 64 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 10 months ago when the stock gained 44.6% on the news that the company reported strong first-quarter earnings results. Sweetgreen blew past analysts' revenue expectations as its same-store sales grew 5%, enabling it to raise its full-year revenue guidance. Its gross margin also outperformed Wall Street's estimates. On the other hand, its EPS missed analysts' expectations, but the market cared more about its upbeat outlook. Overall, we think this was a good quarter that should please shareholders.
Sweetgreen is down 26.5% since the beginning of the year, and at $23.58 per share, it is trading 46.4% below its 52-week high of $43.97 from November 2024. Investors who bought $1,000 worth of Sweetgreen’s shares at the IPO in November 2021 would now be looking at an investment worth $476.44.
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