Shares of Sweetgreen fell 6.7% to close at $8.37 after a USDA forecast indicated that rising farm production costs could soon impact ingredient prices. The U.S. Department of Agriculture projects total production costs for major crops will continue to rise, potentially reaching record highs, driven by significantly higher costs for fuel, lube, electricity, and fertilizer, with some fertilizer cost estimates revised up by as much as 13%. The forecast suggests restaurant operators may not see relief from elevated expenses in the near future, putting pressure on profit margins for chains reliant on agricultural products.
Sweetgreen IncUSDA forecast of rising farm production costs, including fuel and fertilizer, will pressure Sweetgreen's ingredient costs and profit margins.