Consumers Debt Is Piling Up, Data Show. A Weak Job Market Could Make That a Problem. - Barron'sSkip to Main ContentThis copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.# Consumer Debt Is Piling Up, Data Show. A Weak Job Market Could Make That a Problem.By [Megan Leonhardt]Shar ...

Core Viewpoint - Sweetgreen has faced significant challenges in 2023, with its stock down 77% amid broader market growth, particularly in AI stocks [1] Company Performance - Comparable sales for Sweetgreen have turned negative in the first half of 2023, impacted by wildfires in Los Angeles, a downturn in restaurant spending, and a transition in its loyalty program [2] - The company remains unprofitable, with second-quarter same-store sales falling 7.6%, compared to a 9.3% growth in the same quarter the previous year, and revenue increased only 0.5% to $185.6 million [3] - For the full year, Sweetgreen anticipates same-store sales to decline by 4% to 6% and adjusted EBITDA to be between $10 million and $15 million [4] Industry Context - The fast-casual sector is experiencing slower sales across the board, with other companies like Chipotle and Cava Group also reporting declines [5] - Inflation and a weak job market are leading consumers to reduce discretionary spending, including dining out [6] Loyalty Program Changes - Sweetgreen's switch from a tiered loyalty program to a points-based system has resulted in a 250-basis-point revenue headwind from high-frequency users of the old program, although early signs from the new program are described as "encouraging" [7] Pricing and Cost Control - The company faces pressure to lower prices and better manage costs due to frequent complaints about high price points [8] Market Position and Future Outlook - Sweetgreen's market cap has fallen to under $1 billion, with a price-to-sales ratio of 1.4, suggesting potential for significant returns if the company can achieve its growth targets [9][10] - The company aims to reach 1,000 restaurants by 2032, but must first return to same-store sales growth and improve profitability [10] - Upcoming third-quarter earnings report on November 6 could indicate signs of recovery, with easier comparisons in the second half of the year [11]