- CNBC’s Jim Cramer told investors Tuesday it might be smart to buy shares of Sweetgreen, a salad chain that is the best-performing restaurant company in the Russell 3000, according to FactSet.
- “If Sweetgreen stock continues to go down like it did earlier this week, I think you should buy it because this is no longer the unprofitable salad chain it was two or three years ago,” he said.
CNBC’s Jim Cramer told investors it might be smart to buy shares of Sweetgreen, a salad chain that is the best-performing restaurant company in the Russell 3000, according to FactSet.
The stock plunged on Tuesday following a downgrade from Piper Sandler. Cramer was undeterred, however, saying the report was part of a broader bearish forecast for the fast-casual dining sector. And despite the downgrade, the company said its long-term outlook for the stock “remains positive.”
“If Sweetgreen stock continues to go down like it did earlier this week, I think you should buy because this is no longer the unprofitable salad chain it was two or three years ago,” Cramer said. “Sweetgreen has not only embraced profitability as a religion, but it has slaughtered the sacred cow of a pure-play salad chain and is now serving that cow for dinner. You have my blessing to watch the stock here and then maybe buy more if there is further weakness.”
Sweetgreen is up about 193% year-to-date, followed by Cava, up over 128%, and Brinker International — which owns several casual restaurants, including Chili’s — up over 54%.
Cramer has been wary of Sweetgreen since it went public in 2021, but said a lot has changed since then, noting that sales growth at existing stores has returned after a Covid slowdown. Cramer said the company owes much of its success to new offerings in addition to salads — such as protein-packed bowls and other meals. He said those non-salad options brought in new customers and improved traffic during dinner hours and on weekends. During its earnings call earlier this month, management cited those protein plates — particularly a new dish “caramelized garlic steak” — as growth drivers.
The company also has a “structural advantage” because it focuses on healthy meals and higher-income customers, Cramer said, as the fast-food landscape as a whole faces pushback from lower-income consumers. He also said Sweetgreen has done a good job of improving its loyalty program and digital ordering system.
“I’d be tempted to build a small position in Sweetgreen here,” Cramer said. “Given that we’re heading into a seasonally turbulent time for stocks, I wouldn’t be surprised if this stock gets a little shaken up.”
Sweetgreen did not immediately respond to a request for comment.
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