Sweetgreen stock extended its dramatic selloff Thursday, wiping out this year's gains as cases of cyclosporiasis -- an intestinal illness linked to fresh produce -- keep rising across the U.S.

To be clear, no cases of cyclosporiasis have been tied to Sweetgreen, or any producers, for that matter. Still, markets seem concerned that the nationwide hesitation about eating greens could threaten the company and its brand -- which relies on lettuce and other fresh produce for the majority of its offerings. Sweetgreen didn't immediately respond to a request for comment.

The salad chain's shares slid 5.2% to $6.37 on Thursday, officially erasing this year's gains. In just the past four days, shares of the salad chain have plummeted 22%. Before the outbreak gained traction, Sweetgreen had notched a strong start to 2026, jumping 30% in the first half of the year.

Sweetgreen works with over 200, mainly local, food partners across the country for its supply chains, which are organized regionally, according to the company's website.

As of July 16, the Centers for Disease Control and Prevention has confirmed over 1,600 cases of the intestinal illness across 34 states since May 1, including 141 hospitalizations. The CDC also has 5,100 additional potential cases under review.

The infection, caused by a parasite that can trigger weeks of severe stomach issues, including prolonged diarrhea, is spread primarily via raw fresh produce and contaminated water, according to health officials. This week, Michigan officials said lettuce or salad greens had emerged as a potential source, though the CDC said no specific food item has been confirmed as the source.

Either way, a food-safety scare is bad news for the restaurant industry, and adds to existing pressures from elevated inflation and consumers' budget constraints.

Sweetgreen is not alone in seeing sharp stock declines amid fears of infection. After health officials said they are investigating whether Taco Bell restaurants or ingredients played a role in a rise in cyclosporiasis cases, shares of Yum! Brands dropped 2.2% on Tuesday and another 2.3% Wednesday. Investors are waiting to see how Taco Bell responds, though the food chain has already removed fresh produce items from its menus at select locations like Detroit.

Write to Molly Bordoff at molly.bordoff@barrons.com

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July 17, 2026 16:36 ET (20:36 GMT)

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