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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with the audited consolidated financial statements and related notes included elsewhere in this report. This discussion contains forward-looking statements based upon current plans, expectations, and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the sections titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements” and in other parts of this report. Unless the context otherwise requires, all references in this section to “we,” “us,” “our,” the “Company,” or “Sweetgreen” refer to Sweetgreen, Inc. and its subsidiaries.

Our fiscal year is a 52- or 53-week period that ends on the last Sunday of the calendar year. Fiscal year 2025 was a 52-week period that ended December 28, 2025, fiscal year 2024 was a 52-week period that ended December 29, 2024, and fiscal year 2023 was a 53-week period that ended December 31, 2023. In a 52-week fiscal year, each fiscal quarter includes 13 weeks of operations. In a 53-week fiscal year, the first, second, and third fiscal quarters each include 13 weeks of operations, and the fourth fiscal quarter includes 14 weeks of operations.

A discussion regarding our financial condition and results of operations for the year ended December 28, 2025, compared to the year ended December 29, 2024, is presented below. A discussion regarding our financial condition and results of operations for the year ended December 29, 2024, compared to the year ended December 31, 2023, can be found in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 29, 2024, filed with the SEC on February 27, 2025.

Overview

We are a mission-driven, next generation restaurant and lifestyle brand that serves healthy food at scale. Our bold vision is to be as ubiquitous as traditional fast food, but with the transparency and quality that consumers increasingly expect. As of December 28, 2025, we owned and operated 281 restaurants in 24 states and Washington, D.C.

Opening new restaurants, including those with Infinite Kitchen technology, is an important driver of our revenue growth. In fiscal years 2025, 2024, and 2023, we had 35, 25, and 35 Net New Restaurant Openings. One of our strategies is to grow our footprint in both existing and new U.S. markets and, over time, internationally.

As of the end of fiscal year 2025, we utilized the Infinite Kitchen, a kitchen automation technology in 30 of our 281 restaurants. We incorporate the Infinite Kitchen technology into new and existing restaurants based, in large part, upon our evaluation of the potential economic and other benefits for those restaurants.We deployed units of the Infinite Kitchen in 18 of our new restaurants during fiscal year 2025 and 10 of our restaurants during fiscal year 2024.We continue to learn from these deployments and are incorporating our findings into future deployments.

As a premium offering in the fast-casual industry, we are exposed both to consumers trading the convenience of food away from home for the cost benefit of cooking, and to consumers selecting less expensive fast-casual alternatives during weaker economic periods. We have been impacted by a decrease in consumer spending during fiscal year 2025, which we expect to continue at least in the near term. As we focus on discipline with respect to costs and allocation of capital in connection with the Sweet Growth Transformation Plan, we will be opening fewer restaurants in the near term. In fiscal year 2026, we expect approximately 15 Net New Restaurant Openings, with about half featuring Infinite Kitchen units.

We have historically been able to partially offset rising costs - including inflation, tariffs, wage increases and increases in cost of goods sold - through gradual menu price increases, customer service and delivery fees, and operational efficiencies. There can be no assurance that we will be able to continue this practice in the current or future macroeconomic or regulatory environment. We also continue to see variability in our customer traffic patterns, including as a result of many workplaces adopting remote or hybrid models, which has shifted sales away from our In-Store Channel. Our Native Delivery, Outpost and Catering, and Marketplace Channels carry

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higher costs due to third-party fees, elevated refund rates, and promotional activity, and a continued shift in sales mix toward these channels could pressure margins. However, we expect margins on these channels to improve over time as we achieve greater scale.

For fiscal year 2025, tariffs had minimal net impact on our average new unit development cost due to mitigation efforts including advance purchasing, strategic sourcing, and favorable trade policy changes. We expect to continue to be able to mitigate most of these costs in future periods.

For Infinite Kitchen units, the impact of tariffs in fiscal year 2025 was mitigated, in part, by our prepurchase of certain key materials. Tariffs increased the cost of Infinite Kitchen units by approximately 5% in fiscal year 2025. Going forward, we expect the cost of Infinite Kitchen units to modestly increase when taking into account the expected continuing impact of tariffs and additional amounts due to Wonder pursuant to our supply agreement with Wonder described below.

Management remains committed to mitigating the impact of tariff costs across our supply chain, restaurant build-outs and equipment through ongoing sourcing and cost-optimization strategies that we and our suppliers have implemented. Any future changes to the U.S. government’s trade policies may impact these estimates.

Recent Developments

On December 29, 2025, subsequent to fiscal year 2025 year end, we sold Spyce and certain assets relating to the Infinite Kitchen and other related kitchen automation technology and agreed to provide certain transition services to Wonder (such transaction, the “Spyce Sale”). At the time of the sale, we entered into a supply agreement and a license agreement in which Wonder has agreed to sell Infinite Kitchen units to us on a long-term basis and provide certain services related to the Infinite Kitchen units, including commissioning, support and maintenance.

Sales Channel Mix

Our revenue is derived from sales of food and beverage to customers through our five sales channels. We own and operate all of these channels other than our Marketplace Channel, which is operated by various third-party delivery marketplaces.

1.In-Store Channel. Sales to customers who make in-store purchases in our restaurants. Purchases made via cash or credit card are referred to as 'Non-Digital' transactions. Purchases made via digital scan-to-pay or via digital scan-to-earn and scan-to-redeem associated with our SG Rewards loyalty program are included as part of our Owned Digital Channels (defined below).

2.Marketplace Channel. Sales to customers for delivery or pick-up made through third-party delivery marketplaces.

3.Native Delivery Channel. Sales to customers for delivery made through the Sweetgreen website or mobile app.

4.Outpost and Catering Channel. Sales to customers for delivery made through the Sweetgreen website or mobile app to our Outposts, which are our designated offsite drop-off points at offices, residential buildings, and hospitals. In addition, our Outpost and Catering Channel includes our catering offerings, which refer to sales to customers made through our catering website for pickup at one of our restaurants or delivery to a customer-specified address.

5.Pick-Up Channel. Sales to customers made for pick-up at one of our restaurants through the Sweetgreen website or mobile app.

Key Performance Metrics

We track the following key performance metrics to evaluate our performance, identify trends, formulate financial projections, and make strategic decisions. We believe that these key performance metrics provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management team. These key performance metrics are presented for supplemental

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informational purposes only, should not be considered a substitute for financial information presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and may be different from similarly titled metrics or measures presented by other companies.

Fiscal Year Ended

Net New Restaurant Openings 35 25 35

Same-Store Sales Change (as adjusted) (%)(3)(4) (7.9%) 6.2% 4.4%

Total Digital Revenue Percentage 61.8% 56.4% 58.6%

Owned Digital Revenue Percentage 34.6% 30.4% 36.4%

(1)We operate on a 52/53 week fiscal year end that ends on the last Sunday of the calendar year. Fiscal years 2025 and 2024 each contained 52 weeks. Fiscal year 2023 was a 53-week year with the extra operating week (the “53rd week”) falling in our fourth fiscal quarter.

(2)As a result of material, temporary closures of certain stores during the applicable periods, we excluded three restaurants from the Comparable Restaurant Base as of the end of fiscal year 2025 and one restaurant as of the end of fiscal year 2024. Such adjustments did not result in a material change to AUV. No restaurants were excluded as of the end of fiscal year 2023.

(3)For fiscal year 2023, Average Unit Volume and Same-Store Sales Change were adjusted to exclude the 53rd week of operations for comparative purposes. See below under “Average Unit Volume” and “Same-Store Sales Change” additional details.

(4)Our results for the fiscal year ended December 28, 2025 have been adjusted to reflect the temporary closures of 15 restaurants and permanent closures of three restaurants, which were excluded from the calculation of Same-Store Sales change. Our results for the fiscal year ended December 29, 2024 have been adjusted to reflect the temporary closures of 8 restaurants, which were excluded from the calculation of Same-Store Sales change. Our results for the fiscal year ended December 31, 2023 have been adjusted to reflect the temporary closures of two restaurants, which were excluded from the calculation of Same-Store Sales change. Such adjustments did not have a material impact on our Same-Store Sales Change for 2025, 2024, or 2023.

Net New Restaurant Openings

Net New Restaurant Openings reflect the number of new Sweetgreen restaurant openings during a given reporting period, net of any permanent Sweetgreen restaurant closures during the same given period. Before we open new restaurants, we incur pre-opening costs.

Average Unit Volume

AUV is defined as the average trailing revenue for the prior four fiscal quarters for all restaurants in the Comparable Restaurant Base. The measure of AUV allows us to assess changes in guest traffic and per transaction patterns at our restaurants. Fiscal year 2023 was a 53-week year, and in order to provide a measurement period that is consistent with comparable periods that span a 52-week year, rather than simply excluding the extra week, we applied an averaging methodology to the last period of fiscal 2023 to adjust for the extra week.

Comparable Restaurant Base.

Comparable Restaurant Base for any measurement period is defined as all restaurants that have operated for at least twelve full months as of the end of such measurement period, other than any restaurants that had a material, temporary closure during the relevant measurement period. A restaurant is considered to have had a material, temporary closure if it had no operations for a consecutive period of at least 30 days. We excluded three restaurants from the Comparable Restaurant Base as of the end of fiscal year 2025, and one restaurant as of the end of fiscal year 2024. Such exclusions did not result in a material change to AUV. No restaurants were excluded from the Comparable Restaurant Base as of the end of fiscal year 2023.

Same-Store Sales Change

Same-Store Sales Change reflects the percentage change in year-over-year revenue for the relevant fiscal period for all restaurants that have operated for at least 13 full fiscal months as of the end of such fiscal period excluding the 53rd week in any 53-week fiscal year; provided, that for any restaurant that has had a temporary closure (which historically has been defined as a closure of at least five days during which the restaurant would have otherwise been open) during any prior or current fiscal month, such fiscal month, as well as the corresponding fiscal month for the prior or current fiscal year, as applicable, will be excluded when calculating Same-Store Sales Change for that restaurant.Fiscal year 2023 was a 53-week year, which resulted in a misalignment in our comparable weeks in fiscal year 2024. To adjust for this misalignment, in calculating Same-

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Store Sales Change for each fiscal quarter and the full fiscal year 2024, we shifted each week within fiscal year 2023 forward by one week to better align with the 2024 calendar year, specifically to match the timing of holidays and achieve a more accurate comparable Same-Store Sales Change to the prior period.During fiscal year 2025, we excluded 18 restaurants from our Same-Store-Sales Change, including 15 temporary closures and three permanent closures. During fiscal year 2024, we excluded eight restaurants from our Same-Store Sales Change, and during fiscal year 2023, we excluded two restaurants from our Same-Store Sales Change. These adjustments did not result in a material change to Same-Store Sales Change for 2025, 2024, or 2023.

Total Digital Revenue Percentage and Owned Digital Revenue Percentage

Our Total Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through all channels except Non-Digital transactions made through our In-Store Channel. Our Owned Digital Revenue Percentage is the percentage of our revenue attributed to purchases made through our Owned Digital Channels, which include our Pick-Up Channel, Native Delivery Channel, Outpost and Catering Channel (excluding catering orders placed through third-party platforms), and purchases made in our In-Store Channel via digital scan-to-pay, or digital scan-to-earn and scan-to-redeem associated with our SG Rewards loyalty program. With the introduction of our new loyalty program in the second quarter of fiscal year 2025, we have experienced and anticipate continuing to see an increase in Owned Digital sales, which is realized in our Owned Digital Revenue Percentage and our Total Digital Revenue Percentage.

Results of Operations

Comparison of Fiscal Year 2025 and Fiscal Year 2024

The following table summarizes our results of operations for fiscal year 2025 and fiscal year 2024:

Fiscal Year Ended

Operating expenses:

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Revenue

Fiscal Year Ended

Same-Store Sales Change (7.9%) 6.2% (14.1 %)

Revenue increased in fiscal year 2025 compared to fiscal year 2024, primarily due to $58.2 million of incremental revenue associated with 60 Net New Restaurant Openings during fiscal years 2025 and 2024. This was partially offset by a decrease in Comparable Restaurant Base revenue of $53.0 million, resulting in a negative Same-Store Sales Change of 7.9%, primarily reflecting a 10.4% decrease in traffic, partially offset by a 2.5% benefit from menu price increases. Traffic softness reflected a more selective consumer environment and the transition from our former Sweetpass+ program to SG Rewards. While the loyalty transition created near-term headwinds, it positions us to drive more sustainable engagement over time.

In 2026, we anticipate full-year Same-Store Sales Change between (4.0)% to (2.0)%.

Restaurant Operating Costs

Food, Beverage, and Packaging

Fiscal Year Ended

As a percentage of total revenue 28.5% 27.4% 1.1 %

As a percentage of revenue, food, beverage, and packaging costs in fiscal year 2025 increased compared to fiscal year 2024, primarily driven by higher protein costs resulting from higher overall ingredient usage and waste, including increased chicken and tofu portions, higher ingredient and packaging costs related to recently imposed tariffs and duties, as well as a one time write-off of discontinued materials. These increases were partially offset by menu price increases.

For fiscal year 2025, we realized a tariff and duty impact from our food, beverage, and packaging supply chain of approximately 27 basis points. As tariff costs are absorbed into our supplier pricing, the impact may not be separately identifiable in future periods, and may vary based on tariff policy changes.

Labor and Related Expenses

Fiscal Year Ended

As a percentage of total revenue 28.9% 27.9% 1.0 %

As a percentage of revenue, labor and related expenses for fiscal year 2025 increased compared to fiscal year 2024, primarily due to deleverage from lower sales volume as well as wage inflation, partially offset by menu price increases.

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Occupancy and Related Expenses

Fiscal Year Ended

As a percentage of total revenue 9.6 % 8.8 % 0.8 %

As a percentage of revenue, occupancy and related expenses for fiscal year 2025 increased compared to fiscal year 2024, primarily driven by deleverage associated with the change in sales volume.

Other Restaurant Operating Costs

Fiscal Year Ended

As a percentage of total revenue 17.7 % 16.3 % 1.4 %

As a percentage of revenue, other restaurant operating costs during fiscal year 2025 increased compared to fiscal year 2024, primarily due to lower sales volume, as well as increases in restaurant-level advertising spend, catering fees, and repairs and maintenance for existing stores.

Operating Expenses

General and Administrative

Fiscal Year Ended

As a percentage of total revenue 21.1 % 22.2 % (1.0 %)

General and administrative expenses on a dollar basis decreased in fiscal year 2025 compared to fiscal year 2024, primarily due to a $4.6 million decrease in bonus expense due to performance, as well as a $2.5 million decrease in stock-based compensation expense, primarily related to the decrease in expenses associated with restricted stock units and performance-based restricted stock units issued prior to our IPO. These decreases were partially offset by an increase in other expenses across the Sweetgreen Support Center to support our restaurant growth.

As a percentage of revenue, general and administrative expenses for fiscal year 2025 decreased compared to fiscal year 2024, primarily due to the net effect of the fluctuations noted above.

Depreciation and Amortization

Fiscal Year Ended

As a percentage of total revenue 10.5 % 10.0 % 0.6 %

As a percentage of revenue, depreciation and amortization for fiscal year 2025 increased compared to fiscal year 2024, primarily related to the increase in the total depreciable base, driven by our acceleration of new restaurant growth in fiscal year 2025 as well as the change in sales volume.

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Pre-Opening Costs

Fiscal Year Ended

As a percentage of total revenue 1.6 % 1.0 % 0.6 %

As a percentage of revenue, pre-opening costs for fiscal year 2025 increased compared to fiscal year 2024 due to the acceleration of net new restaurant growth as well as the change in sales volume.

Impairment and Closure Costs

Fiscal Year Ended

As a percentage of total revenue 1.8 % 0.3 % 1.4 %

Impairment and closure costs on a dollar basis increased during fiscal year 2025 compared to fiscal year 2024, primarily due to non-cash impairment charges related to property and equipment and the related operating lease assets of twelve of our restaurants compared to one restaurant in the prior year, as well as closure costs associated with three stores that were impaired and closed during fiscal year 2025.

Loss on Disposal of Property and Equipment

Fiscal Year Ended

Loss on disposal of property and equipment $ 1,431 $ 255 461.2 %

As a percentage of total revenue 0.2 % — % 0.2 %

Loss on disposal of property and equipment increased in fiscal year 2025 compared to fiscal year 2024, primarily attributable to the disposal of specialized kitchen equipment.

Restructuring charges

Fiscal Year Ended

As a percentage of total revenue 0.5 % 0.3 % 0.2 %

Restructuring charges for both fiscal years 2025 and 2024 are primarily related to our former Sweetgreen Support Center, which we vacated in fiscal year 2022, including continued amortization of the operating lease asset and related real estate and common area maintenance (“CAM”) charges. Additionally, during fiscal year 2025, we experienced additional restructuring costs including severance and related benefits associated with a reduction in force at our Sweetgreen Support Center and costs associated with vacating our former New York office space. We continue to evaluate our organizational structure and may implement additional changes to lower our administrative headcount in future periods.

Interest Income and Interest Expense

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Fiscal Year Ended

As a percentage of total revenue (1.0) % (1.6) % 0.6 %

Interest income, net decreased in fiscal year 2025 compared to fiscal year 2024, primarily due to a lower cash balance and lower interest rate in our money market accounts during fiscal year 2025 as compared to fiscal year 2024.

Other Expense

Fiscal Year Ended

As a percentage of total revenue 0.2 % 1.0 % (0.8 %)

Other expense decreased in fiscal year 2025 compared to fiscal year 2024, primarily due to a change in the fair value of our contingent consideration compared to the prior year, which was issued as part of the Spyce acquisition in the third quarter of fiscal year 2021. This decrease was partially offset by legal, advisory, and other transaction costs expensed as incurred in fiscal year 2025 in connection with the Spyce Sale completed subsequent to year end.

Income Tax Expense (Benefit)

Fiscal Year Ended

Income tax expense (benefit) $ 46 $ (1,301) (103.5 %)

Effective income tax rate — % 1.4 % (1.4 %)

Our effective income tax rates for the fiscal years ended 2025 and 2024 were —% and 1.4%, respectively, primarily due to the full valuation allowance on our net deferred tax assets.

Seasonality and Quarterly Financial Data

Our revenue fluctuates as a result of seasonal factors and weather conditions. Historically, our revenue has been lower in the first and fourth fiscal quarters of the year due, in part, to the holiday season and inclement weather (generally the winter months, though inclement weather conditions may occur in certain markets at any time of the year). In addition, a core part of our menu, salads, has proven to be more popular among consumers in the warmer months. In recent years, the prevalence of hybrid and remote work arrangements have made seasonality in our business less predictable, and we have experienced negative revenue impacts around national holidays. Additionally, we have seen extreme weather conditions and natural disasters cause disruptions to our operations from time to time, including the wildfires in Los Angeles, which impacted our fiscal year 2025 results.

Our results are also influenced by a variety of other factors, including the amount and timing of non-cash stock-based compensation expense, litigation, settlement and other legal costs, impairment charges and other non-operating items, and the timing of marketing or promotional activities. Quarterly performance may also be

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affected by the number and timing of Net New Restaurant Openings and any restaurant closures during the period.

New restaurants typically operate at higher costs in the periods immediately following opening due to pre-opening expenses, training costs, and initial operating inefficiencies. As a result, our operating results for any particular quarter are not necessarily indicative of results to be expected for any other quarter or for a full fiscal year.

Liquidity and Capital Resources

Sources and Material Cash Requirements

To date, we have funded our operations through proceeds received from common stock and preferred stock issuances and debt incurrences, and through cash flow from operations. As of December 28, 2025and December 29, 2024, we had $89.2 million and $214.8 million in cash and cash equivalents, respectively. Subsequent to the fiscal year ended December 28, 2025, we completed the sale of Spyce to Wonder, consisting of $100 million in cash and shares of Series C Preferred Stock of Wonder with an implied value of $86.4 million. Based on our current operating plan, we believe our existing cash and cash equivalents, will be sufficient to fund our operating lease obligations, capital expenditures, and working capital needs for at least the next 12 months. We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities and available cash balances. If we are unable to generate positive operating cash flows, additional debt and equity financings may be necessary to sustain future operations, and there can be no assurance that such financing will be available to us on commercially reasonable terms, or at all.

Our primary liquidity and capital requirements are funding the current operations in our restaurants and Sweetgreen Support Center, new restaurant development, including the deployment of Infinite Kitchen technology, initiatives to improve the customer experience in our restaurants, and general corporate needs. During the fiscal year ended December 28, 2025, we made a cash payment of approximately $2.3 million related to the second Spyce milestone payment. In connection with the aforementioned sale of Spyce to Wonder, and pursuant to the terms of the contingent consideration liability, the conditions for the third milestone payment were satisfied upon closing the sale, resulting in the acceleration of the final payment. The remaining $7.0 million was paid out in January 2026 and is included within other current liabilities within the consolidated balance sheets as of December 28, 2025. See Notes 3 and 16 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details. We have not required significant working capital because customers generally pay using cash or credit and debit cards and, as a result, our operations do not result in significant receivables. Additionally, our operations do not require significant inventories due, in part, to our use of numerous fresh ingredients. Additionally, we are able to sell most of our inventory items before payment is due to the supplier of such items.

The following table presents our material cash requirements for future periods:

(1)See Note 8 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Prior Credit Facility

During fiscal year 2024, we were party to a First Amended and Restated Revolving Credit, Delayed Draw Term Loan and Security Agreement (as amended, the “Credit Facility”) with EagleBank. We did not renew the Credit Facility in 2024 and it expired pursuant to its terms on December 13, 2024. As of December 28, 2025 and December 29, 2024, we had no outstanding debt obligations.

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Cash Flows

The following table summarizes our cash flows for the periods indicated:

Fiscal Year Ended

Net cash (used in) provided by operating activities $ (12,696) $ 43,390 $ 26,480

Net cash provided by (used in) financing activities 2,861 8,895 (5,199)

Operating Activities

For fiscal year 2025, cash used in operating activities increased $56.1 million compared to fiscal year 2024. The increase was primarily due to the $20.4 million impact of unfavorable working capital fluctuations, driven by the timing of rent expense, payroll, and other payments in the ordinary course of business, as well as a $2.3 million Spyce milestone payment. The remaining change was related to a $33.4 million decrease in income after excluding non-cash items.

For fiscal year 2024, cash provided by operating activities increased $16.9 million compared to fiscal year 2023, primarily due to a $20.9 million reduction in net loss after excluding non-cash items and a $4.0 million favorable working capital fluctuation, which is primarily related to the timing of payroll and other payments in the ordinary course of business, offset by the $3.4 million receipt of Employee Retention Credit in fiscal year 2023.

Investing Activities

For fiscal year 2025, cash used in investing activities was $114.3 million, an increase of $22.0 million compared to fiscal year 2024. Investing activities in fiscal year 2025 consisted primarily of purchases of property and equipment of $106.5 million related to 39 gross new restaurant openings (excluding tenant improvement allowances), restaurants in process, renovations, and prepayments associated with the deployment of Infinite Kitchen units and other restaurant-related equipment. In addition, we had cash outflow for fiscal year 2025 of $7.8 million related to purchases of intangible assets.

For fiscal year 2024, cash used in investing activities was $92.2 million, a decrease of $3.5 million compared to fiscal year 2023. Investing activities in fiscal year 2024 consisted primarily of purchases of property and equipment of $84.5 million related to 25 gross new restaurant openings (excluding tenant improvement allowances), restaurants in process, renovations, and prepayments associated with the deployment of Infinite Kitchen units and restaurant-related equipment. In addition, we had cash outflow for fiscal year 2024 of $7.7 million related to purchases of intangible assets.

Financing Activities

For fiscal year 2025, cash provided by financing activities decreased $6.0 million compared to fiscal year 2024, primarily due to the $9.6 million decrease in proceeds received from stock option exercises, partially offset by the $3.9 million Spyce milestone payment made in 2024.

For fiscal year 2024, cash provided by financing activities increased $14.1 million compared to fiscal year 2023, primarily due to the $7.4 million increase in proceeds received from stock option exercises, and a $6.6 million decrease in Spyce milestone payments.

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Critical Accounting Estimates

The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of revenue and expenses during the reporting period. Our most significant estimates and judgments involve difficult, subjective, or complex judgments made by management. Actual results may differ from these estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.

We believe that the accounting policies described below involve a greater degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations. For further information, see Note 1 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Leases

We determine if a contract contains a lease at inception. Our material operating leases consist of restaurant locations and office space. Our leases generally have remaining terms of one to ten years and most include options to extend the leases for additional five-year periods. Generally, the lease term is the minimum of the noncancelable period of the lease or the lease term inclusive of reasonably certain renewal periods up to a term of 20 years. If the estimate of our reasonably certain lease term were changed, our rent expense could differ materially.

Operating lease assets and liabilities are recognized at time of lease inception. Operating lease liabilities represent the present value of lease payments not yet paid. We made the policy election to combine lease and non-lease components, and we also consider fixed CAM part of our fixed future lease payments. Fixed CAM is also included in our operating lease liability. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, we estimate incremental borrowing rates corresponding to the reasonably certain lease term. As we have no outstanding debt, we estimate this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment. If the estimate of our incremental borrowing rate were changed, our operating lease assets and liabilities could differ materially.

Impairment and Closure Costs

Long-lived assets are reviewed for recoverability at the lowest level in which there are identifiable cash flows (asset group). The asset group is at the store-level for restaurant assets and the corporate-level for corporate assets. The carrying amount of a store asset group includes stores’ property and equipment, primarily leasehold improvements and operating lease assets. Long-lived assets, including property and equipment, operating lease assets, and internally developed software, are reviewed by management for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be fully recoverable. When events or circumstances indicate that impairment may be present, we evaluate the probability that future undiscounted net cash flows received will be less than the carrying amount of the asset group. If projected future undiscounted cash flows are less than the carrying value of an asset group, then such assets are written down to their fair values. We use a discounted cash flows model to measure the fair value of an asset group. An impairment charge will be recognized in the amount by which the carrying amount of the store asset group exceeds its fair value. A number of significant assumptions and estimates are involved in the application of the model to forecast operating cash flows, which are largely unobservable inputs and, accordingly, are classified as Level 3 inputs within the fair value hierarchy. Assumptions used in these forecasts are consistent with internal planning, and include revenue growth rates, gross margins and operating expense in relation to the current economic environment, the discount rate, future expectations, competitive factors in its various markets, inflation, revenue trends, market rents for the operating lease and other relevant economic factors that may impact the store under evaluation. Additionally, for corporate-level corporate assets for operating lease assets, assumptions used include monthly market rent, annual rent increases, cash flow period, free rent period, estimated tenant improvements and discount rate.

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Any material changes in the sum of our undiscounted cash flow estimates resulting from different assumptions used as of December 28, 2025 for those store asset groups included in our evaluation could result in a material change in the long-lived asset impairment charge for fiscal year 2025. If actual performance does not achieve the projections, or if the assumptions used change in the future, we may be required to recognize impairment charges in future periods, and such charges could be material. Our projections are estimates, which could vary significantly, either favorably or unfavorably, from actual results if future economic conditions, consumer demand and competitive environments differ from our expectations. At this time, we do not believe that there is a reasonable likelihood that there will be a material change in the future estimates or assumptions that we use to calculate our impairment charge.

We recorded non-cash impairment charges of $11.3 million during fiscal year December 28, 2025 associated with twelve store locations, of which $9.7 million related to certain property and equipment and $1.6 million related to operating lease assets. We recorded non-cash impairment charges of $1.7 million during the fiscal year ended December 29, 2024 associated with one location, of which $1.3 million related to certain property and equipment and $0.4 million related to operating lease assets.

Recent Accounting Pronouncements

See Note 1 to our audited consolidated financial statements elsewhere in this Annual Report on Form 10-K for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this report.

ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

We have operations solely within the United States, and we are exposed to market risks in the ordinary course of our business. The primary risks we face are commodity price risks, interest rate risk, effects of inflation, and macroeconomic risks.

Commodity Price Risks

We are exposed to commodity price risks. Many of the ingredients we use to prepare our food, as well as our packaging materials and utilities to run our restaurants, are ingredients or commodities that are affected by the price of other commodities, exchange rates, inflation, foreign demand, weather, trade tariffs, seasonality, production, availability and other factors outside our control. We work closely with our suppliers and use a mix of forward pricing protocols under which we agree with our supplier on fixed prices for deliveries at some time in the future, fixed pricing protocols under which we agree on a fixed price with our supplier for the duration of that protocol, formula pricing protocols under which the prices we pay are based on a specified formula related to the prices of the goods, such as spot prices, and range forward protocols under which we agree on a price range for the duration of that protocol. Generally, our pricing agreements with suppliers range from up to three years, depending on the outlook for prices of the particular ingredient. In some cases, we have minimum purchase obligations. We have tried to increase, where practical, the number of suppliers for our ingredients, which we believe can help mitigate pricing volatility, and we follow industry news, trade issues, exchange rates, foreign demand, weather, crises, and other world events that may affect our ingredient prices. Increases in ingredient prices could adversely affect our results if we choose for competitive or other reasons not to increase menu prices at the same rate at which ingredient costs increase, or if menu price increases result in customer resistance. We also could experience shortages of key ingredients if our suppliers need to close or restrict operations due to unforeseen events.

Due to the recent pace of inflation and other global supply chain risks, including extreme weather conditions, suppliers and distributors have renegotiated, and could continue to attempt to renegotiate, our existing contracts to increase prices, as well as assess certain fuel surcharges. These changes could have a negative impact on our commodity prices. For example, in the fourth quarter of fiscal year 2024, as a result of extreme weather conditions, we experienced supply chain disruptions for tomatoes and cucumbers, which resulted in higher prices for those products or resulted in temporarily discontinuing those products in certain geographic markets. Additionally, since the beginning of 2023, we have been experiencing supply chain disruptions for our bowls and plates which has resulted in use of alternative packaging solutions. We continue to assess the current environment, work with our suppliers and distributors and create certain contingency plans to mitigate any negative impact.

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Changing Interest Rates

We are exposed to interest rate risk through fluctuations of interest rates on our investments through our cash in our money market accounts. Changes in interest rates affect the interest income we earn, and therefore impact our cash flows and results of operations. As of December 28, 2025 and December 29, 2024, we had $89.2 million and $214.8 million of cash and cash equivalents, respectively, consisting of bank accounts and money market funds, and $4.2 million and $2.6 million, respectively, of restricted cash relating to certificates of deposit that are collateral for letters of credit to our lease agreements. Interest-earning instruments carry a degree of interest rate risk. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure. Due to the short-term nature of our investments, we have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates. A hypothetical 10% change in interest rates would not have had a material impact on our results of operations for fiscal years 2025 and 2024.

Effects of Inflation

We have a substantial number of hourly employees who are paid wage rates at or based on the applicable federal, state, or local minimum wage, and increases in the minimum wage, and other upward pressure on wage rates, including inflation will increase our labor costs. While we have been able to partially offset inflation and other changes in the costs of core operating resources by gradually increasing menu prices, coupled with more efficient purchasing practices, productivity improvements and greater economies of scale, there can be no assurance that we will be able to continue to do so in the future, particularly if inflation continues to increase at its recent pace. From time to time, competitive conditions could limit our menu pricing flexibility. In addition, macroeconomic conditions could make additional menu price increases imprudent. There can be no assurance that future cost increases can be offset by increased menu prices or that increased menu prices will be fully absorbed by our customers without any resulting change to their visit frequencies or purchasing patterns. In addition, there can be no assurance that we will generate positive Same-Store Sales Change in an amount sufficient to offset inflationary or other cost pressures.

Macroeconomic Risks

Current macroeconomic conditions, such as inflation and higher interest rates, increase the risk of an economic downturn. An economic downturn could increase unemployment and lower consumer confidence. Macroeconomic conditions also negatively impact consumer discretionary spending and have negatively impacted our Restaurant Level Profit and results of operations in recent periods.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index To Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) F-2

Consolidated Balance Sheets as of December 28, 2025 and December 29, 2024 F-4

Notes to Consolidated Financial Statements F-8

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Sweetgreen, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Sweetgreen, Inc.and subsidiaries (the "Company") as of December 28, 2025 and December 29, 2024, the related consolidated statements of operations and comprehensive loss, stockholders' equity, and cash flows, for each of the three years in the period ended December 28, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 28, 2025 and December 29, 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 28, 2025, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 28, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Property and Equipment and Operating Lease Assets – Impairment – Refer to Notes 1, 3, and 8 to the financial statements

Critical Audit Matter Description

The Company’s evaluation of long-lived assets at restaurants (which include property and equipment and operating lease assets) for impairment involves reviewing for events or changes in circumstances that indicate the carrying amount of the assets may not be recoverable. Long-lived assets are reviewed for recoverability at the lowest level at which there are separately identifiable cash flows. The asset group is at the store level for restaurant assets (“store asset group”). When events or circumstances indicate that impairment may be present, management evaluates whether the anticipated future undiscounted cash flows are less than the carrying amount of the store asset group. If the anticipated future undiscounted cash flows are less than the carrying amount of the store asset group, management uses a discounted cash flow model to estimate the fair value of the store asset group and records an impairment charge for the amount by which the carrying amount of the store asset group exceeds its fair value. A number of assumptions and estimates are involved in developing management’s projections of future cash flows, which are largely unobservable inputs, and include

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revenue projections. Changes in these assumptions could have a significant impact on the fair value and the amount of impairment charges recorded, if any.

We identified potential impairment of long-lived assets for store asset groups with indicators of impairment but for which no impairment charge was determined necessary to be recorded as a critical audit matter because management’s assessment involves significant judgment in estimating future cash flows. Specifically, significant judgment is required by management in the development of revenue projections. A high degree of auditor judgment and an increased extent of effort was used when performing audit procedures to evaluate the reasonableness of management’s assumptions and estimates in determining revenue projections for store asset groups with indicators of impairment but for which no impairment charges were recorded.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s revenue projections utilized in its impairment testing for store asset groups with indicators of impairment included the following, among others:

•Tested the effectiveness of controls over management’s review of the long-lived asset impairment analysis for store asset groups, including key assumptions utilized to project revenues.

•Evaluated the consistency of projected revenues with other relevant information obtained as part of our audit.

•Compared projected revenues to historical results and sales trends of the store asset group under evaluation and other comparable store asset groups under similar economic circumstances.

•Evaluated management's ability to accurately project future cash flows by comparing actual financial results to management's historical forecasts.

/s/ Deloitte & Touche LLP

Los Angeles, California

February 26, 2026

We have served as the Company's auditor since fiscal 2012.

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SWEETGREEN, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

ASSETS

Current assets:

Current portion of lease acquisition costs 93 93

Assets held for sale 25,427 —

Lease acquisition costs, net 241 333

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Current portion of operating lease liabilities $ 41,590 $ 41,773

Gift cards and loyalty liability 7,177 4,413

Liabilities held for sale 1,085 —

Operating lease liabilities, net of current portion 312,904 288,941

Contingent consideration liability — 5,311

Other non-current liabilities 149 173

Deferred income tax liabilities 274 361

COMMITMENTS AND CONTINGENCIES (Note 14)

Stockholders’ equity:

Total liabilities and stockholders’ equity $ 788,104 $ 856,758

The accompanying notes are an integral part of these consolidated financial statements.

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SWEETGREEN, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share amounts)

Fiscal Year Ended

Operating expenses:

Loss on disposal of property and equipment 1,431 255 687

Earnings per share:

Net loss per share, basic and diluted $ (1.14) $ (0.79) $ (1.01)

The accompanying notes are an integral part of these consolidated financial statements.

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SWEETGREEN, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

Common Stock AdditionalPaid-inCapital AccumulatedDeficit Total

Shares Amount

Issuance of common stock related to restricted shares 587,078 — — — —

Shares repurchased for employee tax withholding (10,888) — (166) — (166)

Stock-based compensation expense — — 49,532 — 49,532

Issuance of common stock related to performance stock units 1,800,000 2 — — 2

Issuance of common stock related to restricted shares 479,078 — — — —

Shares repurchased for employee tax withholding (531) — (2) — (2)

Stock-based compensation expense — — 39,024 — 39,024

Issuance of common stock related to restricted shares 690,957 — — — —

Shares repurchased for employee tax withholding (9,918) — (259) — (259)

Stock-based compensation expense — — 36,475 — 36,475

The accompanying notes are an integral part of these consolidated financial statements.

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SWEETGREEN, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Fiscal Year Ended

Cash flows from operating activities:

Amortization of lease acquisition costs 92 93 92

Amortization of loan origination fees — 71 55

Amortization of cloud computing arrangements 1,009 914 880

Loss on disposal of property and equipment 1,431 255 687

Deferred income tax (benefit) expense (89) (1,412) 358

Change in fair value of contingent consideration liability (974) 6,624 3,475

Changes in operating assets and liabilities:

Prepaid expenses and other current assets 4,338 (22) (3,789)

Accrued expenses and other current liabilities 5,810 3,313 1,163

Contingent consideration liability (2,291) — —

Other non-current liabilities (27) (646) (533)

Cash flows from investing activities:

Security and landlord deposits 54 (13) 122

Cash flows from financing activities:

Payment of contingent consideration — (3,868) (10,421)

Payment associated to shares repurchased for tax withholding (259) (2) (166)

Net cash provided by (used in) financing activities 2,861 8,895 (5,199)

Supplemental disclosure of cash flow:

Cash paid for interest $ 19 $ 184 $ 50

Non-cash investing and financing activities:

The accompanying notes are an integral part of these consolidated financial statements.

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SWEETGREEN, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Sweetgreen, Inc., a Delaware corporation, together with its wholly owned subsidiaries (the “Company”), is a mission-driven, next generation restaurant and lifestyle brand that serves healthy food at scale. The Company’s bold vision is to be as ubiquitous as traditional fast food, but with the transparency and quality that consumers increasingly expect. As of December 28, 2025, the Company owned and operated 281 restaurants in 24 states and Washington, D.C. The Company had 35 Net New Restaurant Openings in fiscal year 2025.

The Company was founded in November 2006 and incorporated in the state of Delaware in October 2009 and currently is headquartered in Los Angeles, California. The Company’s operations are conducted as one operating segment and one reportable segment. Additional details on the nature of the Company’s business and their reportable operating segment is included in Note 15, “Reportable Segment”.

Principles of Consolidation—The accompanying consolidated financial statements include the accounts of the Company. All intercompany balances and transactions have been eliminated in consolidation.

Fiscal Year—The Company’s fiscal year is a 52- or 53-week period that ends on the last Sunday of the calendar year. Fiscal years 2025 and 2024 were 52-week periods that ended December 28, 2025 and December 29, 2024, respectively. Fiscal year 2023 was a 53-week period that ended December 31, 2023. In a 52-week fiscal year, each quarter includes 13 weeks of operations. In a 53-week fiscal year, the first, second and third quarters each include 13 weeks of operations, and the fourth quarter includes 14 weeks of operations.

Management’s Use of Estimates—The consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates made by the Company include the income tax valuation allowance, impairment of long-lived assets and right-of-use assets (“ROU assets”), legal liabilities, valuation of the contingent consideration liability, lease accounting matters, and stock-based compensation. These estimates are based on information available as of the date of the consolidated financial statements; therefore, actual results could differ from those estimates.

Cash and Cash Equivalents—The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. Amounts receivable from credit card processors are converted to cash shortly after the related sales transaction and are considered to be cash equivalents because they are both short-term and highly liquid in nature. Amounts receivable from sales transactions as of December 28, 2025 and December 29, 2024, were $3.6 million and $2.3 million, respectively.

Restricted Cash—The Company’s restricted cash balance relates to certificates of deposit that are collateral for letters of credit to lease agreements entered into by the Company and letters of credit associated with the Company’s workers’ compensation insurance policy.

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The reconciliation of cash and cash equivalents and restricted cash presented in the Company’s accompanying consolidated balance sheets to the total amount shown in its consolidated statements of cash flows is as follows:

(dollar amounts in thousands) December 28,2025 December 29,2024

Reconciliation of cash, cash equivalents and restricted cash:

The $4.2 millionrestricted cash balance as of December 28, 2025 was associated with letters of credit required by the Company’s workers’ compensation insurance policy.

Concentrations of Risk— The Company maintains cash balances at several financial institutions located in the United States. The cash balances may, at times, exceed federally insured limits. Accounts are guaranteed by the Federal Deposit Insurance Corporation up to $0.3 million.

As of December 28, 2025, December 29, 2024, and December 31, 2023, approximately 24%, 25%, and 28%, respectively, of the Company’s revenue was generated from the Company’s restaurants located in the New York City metropolitan area.

Other Current Assets—Other current assets primarily consist of outstanding receivables from the Company’s distributors and current portion of deferred implementation costs. Historically, this category included the Employee Retention Credit “ERC”, which was collected in full during fiscal year 2025, and thus, there is no ERC balance outstanding as of December 28, 2025. See Note 11 for further details.

Other Assets— Other assets primarily consist of deferred implementation costs, which are capitalized implementation costs from cloud computing arrangements in relation the Company’s enterprise resource planning system These costs amounted to $3.3 million and $3.8 million as of December 28, 2025 and December 29, 2024, respectively, and were recorded within other assets in the consolidated balance sheets. The amortization of these costs are generally recognized within the Company’s consolidated statement of operations under general and administrative expenses over a useful life of seven years.

Accounts Receivable— Accounts receivable primarily consists of receivables from distributors, amounts recoverable from third party insurance carriers, and receivables from the Company’s Marketplace and Outpost and Catering Channels.

Inventory— Inventory, consisting primarily of food, beverages and supplies, is valued at the lower of cost first-in, first-out cost or net realizable value.

Prepaid Expenses— Prepaid expenses primarily include prepaid office systems, which the Company amortizes over the life of the contract, and prepaid insurance, which is expensed in the period for which it relates.

Property and Equipment—Property and equipment are recorded at cost. Property and equipment are depreciated using the straight-line method over the following estimated useful lives:

Property and Equipment Useful Life

Leasehold improvements Shorter of lease term or estimated asset life

Furniture and fixtures 5 years

Kitchen equipment 5 - 10 years

Computers and other equipment 3 years

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Upon retirement or disposal of assets, the accounts are relieved of cost and accumulated depreciation. Any related gain or loss is reflected in loss on disposal of property and equipment in the consolidated statement of operations. Assets to be disposed of are reported at the lower of their carrying amount or fair value less estimated cost to sell. Expenditures for repairs and maintenance are expensed as incurred.

The Company capitalizes certain directly attributable internal costs in conjunction with the acquisition, development and construction of future restaurants, after the restaurant construction is past the planning stage and it is considered probable that the restaurant will open. These costs are included in property and equipment and amortized over the shorter of the life of the related buildings and leasehold improvements or the lease term. The Company capitalized internal costs related to site selection and construction activities of $4.0 million and $4.6 million for the fiscal years ended December 28, 2025 and December 29, 2024, respectively.

Costs related to abandoned sites and other site selection costs that cannot be identified with specific restaurants are charged to general and administrative expenses in the accompanying consolidated statements of operations, and were $1.3 million, $0.2 million and $0.3 million for each of the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023, respectively.

On September 7, 2021, the Company closed its acquisition of Spyce, a Boston-based restaurant company powered by automation technology, allowing the Company to serve its food in its restaurants via automation (see Note 3). Automated technology associated with the Infinite Kitchen is included in kitchen equipment within property and equipment. Total research and development was $1.0 million for both of the fiscal years ended December 28, 2025 and December 29, 2024, and $1.2 million for the fiscal year ended December 31, 2023. These costs are primarily costs incurred to develop and improve the Infinite Kitchen, and are recorded within general and administrative costs in the Company’s accompanying consolidated statement of operations. Subsequent to the fiscal year ended December 28, 2025, the Company completed the sale of Spyce to certain subsidiaries of Wonder Group, Inc. (“Wonder”). See Note 16 Assets Held for Sale and Subsequent Events for further details.

Restructuring Charges—Restructuring charges primarily relate to the continued amortization of the operating lease asset and related real estate and common area maintenance fees (“CAM”) charges resulting from the Company’s reorganization of operations and decision to vacate the premises of the Company’s former Sweetgreen Support Center during fiscal year 2022.

For fiscal year 2025, the Company recorded restructuring charges of $3.6 million, primarily related to the continued amortization of the operating lease asset and related real estate and CAM charges from the Company’s former Sweetgreen Support Center. Total operating lease costs and total variable leases costs included in restructuring charges for fiscal year 2025 were $1.4 million and $0.6 million, respectively. Additionally, the Company experienced additional restructuring costs including severance and related benefits associated with a reduction in force at the Sweetgreen Support Center and costs associated with vacating the Company’s former New York office space. The Company continues to evaluate its organizational structure and have and may continue to implement additional changes to lower its administrative headcount.

For fiscal years 2024 and 2023, the Company recorded restructuring charges of $2.3 million and $7.4 million, respectively, primarily related to operating lease asset impairment costs from the Company’s vacated former Sweetgreen Support Center, as well as the amortization of the underlying operating lease asset and related real estate and CAM charges. Total operating lease costs included in restructuring charges for fiscal years for 2024 and 2023 were $1.5 million and $1.8 million, respectively, and total variable leases costs included in restructuring charges for both fiscal years 2024 and 2023 were $0.5 million.

Contingent Consideration—Due to certain conversion features, the contingent consideration issued as part of the Spyce acquisition is considered a liability in accordance with ASC 480. The liability associated with the contingent consideration is initially recorded at fair value (see Note 3 for further details) upon issuance date and is subsequently re-measured to fair value at each reporting date. The initial fair value of the liability for the contingent consideration was $16.4 million and was included as part of the purchase price for the Spyce acquisition. The fair value of the liability as of December 28, 2025 was $7.0 million, which was included in other

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current liabilities within the consolidated balance sheets. The fair value of the liability as of December 29, 2024 was $15.0 million, of which $9.7 millionwas included in other current liabilities and $5.3 millionwas included in contingent consideration liability within the consolidated balance sheets. See Note 3.

Changes in fair value of the contingent consideration is recognized within other expense in the accompanying consolidated statements of operations.

Other Current Liabilities— Other current liabilities is comprised of the short-term portion of the contingent consideration liability. See Note 3.

Goodwill—Goodwill, which represents the excess of the cost of an acquired entity over the fair value of the acquired net assets, has an indefinite life and, accordingly, is not amortized. The Company has one reporting unit and tests goodwill for impairment annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired.

The Company reviews goodwill for impairment utilizing either a qualitative assessment or a fair value test by comparing the fair value of its reporting unit with its carrying amount, including goodwill. If the Company decides that it is appropriate to perform a qualitative assessment and concludes that the fair value of its reporting unit more likely than not exceeds its carrying value, no further evaluation is necessary. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount of a reporting unit exceeds its fair value, the Company will recognize an impairment charge for the amount by which the carrying amount exceeds its reporting unit’s fair value.

The Company did not record any impairment charges related to the carrying amount of goodwill during the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023.

Fair value estimates are subject to change as a result of many factors, including changes in business plans, economic conditions, and the competitive environment, among others. Should actual cash flows and the Company’s future estimates vary adversely from current estimates, the Company may be required to recognize goodwill impairment charges in future years.

Intangible Assets, net— External costs and certain internal costs, including payroll and payroll-related costs for employees, directly associated with developing computer software applications for internal use are capitalized subsequent to the preliminary stage of development as well as developed technology associated with the Infinite Kitchen technology. Internal-use software costs are amortized using the straight-line method over a three year estimated useful life of the software when the project is substantially complete and ready for its intended use.

Developed technology intangible assets were recognized in conjunction with the Company’s acquisition of Spyce on September 7, 2021. The estimated useful life of developed technology is five years. Subsequent to the fiscal year ended December 28, 2025, the Company completed the sale of Spyce to Wonder Group, Inc., resulting in the disposal of the developed technology intangible asset. For the fiscal year ended December 28, 2025, the remaining carrying value of the developed technology asset is classified as held-for-sale. See Note 16 Assets Held for Sale and Subsequent Events for further details.

Lease Acquisition Costs— Lease acquisition costs include key money which is the amount of funds paid to a landlord or tenant to acquire the rights of tenancy under a commercial property lease. These costs are amortized over the respective lease terms that range from 10 to 15 years and are presented net of accumulated amortization.

Revenue Recognition—The Company recognizes food and beverage revenue, net of discounts and incentives, when payment is tendered at the point of sale as the performance obligation has been satisfied. For purposes of revenue disaggregation, the Company reports revenue in three categories:

I.Owned Digital Channels. Encompasses the Company’s Pick-Up Channel, Native Delivery Channel, Outpost and Catering Channel (excluding catering orders placed through third-party platforms), and purchases made in the Company’s In-Store Channel via digital scan-to-pay, or digital scan-to-earn and scan-to-redeem associated with the SG Rewards loyalty program.

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II.In-Store Channel (Non- Digital Component). Sales to customers who make in-store purchases in the Company’s restaurants, whether they pay by cash, credit card.

III.Marketplace Revenue. Sales to customers for delivery or pick-up made through third-party delivery marketplaces, including catering orders placed through third-party platforms.

Provisions for discounts are provided for in the same period the related sales are recorded. Sales taxes and other taxes collected from customers and remitted to governmental authorities are presented on a net basis, and as such, are excluded from revenues.

Gift Cards—The Company sells gift cards that do not have an expiration date. Upon sale, gift cards are recorded as unearned revenue and included within gift card liability in the accompanying consolidated balance sheets. The revenue from gift cards is recognized when redeemed by customers. Gift cards are subject to actual and/or potential escheatment rights in one or more of the jurisdictions in which the Company operates. The Company does not recognize breakage income because of its requirements to escheat unredeemed gift card balances.

SG Rewards Loyalty—The Company has a loyalty program called SG Rewards, which launched in fiscal year 2025. Customers can earn 10 loyalty points for every $1 spent on eligible purchases made through the mobile app or by using digital scan-to-earn and scan-to-redeem in-store. These loyalty points can be redeemed for free or discounted menu items in future transactions. All customers with a digital account are automatically enrolled in this free program. Points expire 180 days after they are issued to a customer’s account.

The Company records a liability and a corresponding reduction in revenue in periods when loyalty program rewards are earned by members. The Company recognizes revenue and a corresponding reduction to the liability in periods when loyalty program rewards are redeemed by members. The Company defers revenue based on the relative estimated standalone selling price of the loyalty points, which is estimated as the value of the loyalty reward, net of loyalty related purchases not expected to be redeemed. Using industry data and historical customer trends, the Company estimates the total value of loyalty purchases not expected to be redeemed.

Delivery—The majority of the Company’s restaurant locations offer a delivery option. Delivery services are fulfilled by third-party service providers whether delivery is ordered through the Company’s Native Delivery Channel or Marketplace Channel. With respect to Native Delivery Channel sales, the Company controls the delivery services and recognizes revenue, including delivery revenue, when the delivery partner transfers food or beverage to the customer. For these sales, the Company receives payment directly from the customer at the time of sale. With respect to Marketplace Channel sales, the Company recognizes revenue when food is delivered to the customer by the delivery service, excluding delivery fees collected by the delivery partner as the Company does not control the delivery service. The Company receives payment from the delivery partner subsequent to the transfer of food and the payment terms are short-term in nature. For all delivery sales, the Company is considered the principal and recognize the revenue on a gross basis.

Income Taxes—The Company is subject to federal and state income taxes. The Company uses the asset and liability method of accounting for income taxes as set forth in ASC 740, Income Taxes. Under this method, the Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the respective carrying amounts and tax basis of assets and liabilities. All deferred tax assets and liabilities are classified as non-current in the accompanying consolidated balance sheet. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established against the portion of deferred tax assets that the Company believes will not be realized on a more-likely-than-not basis.

With respect to uncertain tax positions, the Company recognizes in its consolidated financial statements those tax positions determined to be “more likely than not” of being sustained upon examination, based on the technical merits of the positions. For those tax positions where it is “not more likely than not” that a tax benefit

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will be sustained, no tax benefit is recognized. The Company’s policy is to recognize, when applicable, interest and penalties on uncertain tax positions as part of income tax expense.

Fair Value of Financial Instruments—The fair value measurement accounting guidance creates a fair value hierarchy to prioritize the inputs used to measure fair value into three categories. A financial instrument’s level within the fair value hierarchy is based on the lowest level of input significant to the fair value measurement, where Level 1 is the highest category (observable inputs) and Level 3 is the lowest category (unobservable inputs). The three levels are defined as follows:

Level 1—Quoted prices for identical instruments in active markets.

Level 2—Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which significant value drivers are observable.

Level 3—Unobservable inputs for the asset or liability. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The carrying amount of accounts receivable, other current assets, accounts payable, accrued payroll and accrued expenses approximates fair value due to the short-term maturity of these financial instruments. The Company’s contingent consideration liability is carried at fair value determined using Level 3 inputs in the fair value. See Note 3.

Certain assets and liabilities are measured at fair value on a nonrecurring basis. In other words, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). See Note 3.

Impairment and Closure Costs— Impairment includes impairment charges related to the Company’s long-lived assets, which include property and equipment and internally developed software, and operating lease assets. Long-lived assets are reviewed for recoverability at the lowest level in which there are identifiable cash flows (“asset group”). The asset group is at the store-level for restaurant assets and the corporate-level for corporate assets. The carrying amount of a store asset group includes stores’ property and equipment, primarily leasehold improvements, and operating lease assets, net of operating lease liabilities. The carrying amount of a corporate-level asset group includes Support Center property and equipment, operating lease assets, internally developed software and internally developed technology. Long-lived assets are reviewed by management for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be fully recoverable. When events or circumstances indicate that impairment may be present, management evaluates the probability that future undiscounted net cash flows received will be less than the carrying amount of the asset group. The Company uses a discounted cash flow model to measure the fair value of an asset group. An impairment charge will be recognized in the amount by which the carrying amount of the store asset group exceeds its fair value. The resulting impairment charge, if any, is allocated to the property and equipment, primarily leasehold improvements, and operating lease assets on a pro rata basis using the relative carrying amounts of those assets. The allocated impairment charge to a long-lived asset is limited to the extent that the impairment charge does not reduce the carrying amount of the long-lived asset below its individual fair value. The estimation of the fair value of an operating lease asset primarily involves the evaluation of current and future market value rental amounts, which are primarily based on recent observable market rental data. The fair value of an operating lease asset is measured using a discounted cash flow valuation technique by discounting the estimated current and future market rental values using a property-specific discount rate.

A number of significant assumptions and estimates are involved in the application of the model to forecast operating cash flows, which are largely unobservable inputs, including future revenue projections. Accordingly, such significant assumptions are classified as Level 3 inputs within the fair value hierarchy. Assumptions used in these forecasts are consistent with internal planning, and include sales growth rates, gross margins, and operating expense in relation to the current economic environment and the Company’s future expectations, competitive factors in its various markets, inflation, sales trends and other relevant economic factors that may impact the store under evaluation. In addition, assumptions used for operating lease assets vacated for future sublease include the Company’s estimated future sublease income and a property specific discount rate. There is uncertainty in the projected undiscounted future cash flows used in the Company’s impairment review

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analysis, which requires the use of estimates and assumptions. If actual performance does not achieve the projections, or if the assumptions used change in the future, the Company may be required to recognize impairment charges in future periods, and such charges could be material.

The Company determined that triggering events, primarily related to the impact of changing customer behavior trends, including slower than expected return to office and as a result of broader macroeconomic conditions on the Company’s near-term restaurant level cash flow forecast, restructuring activities and anticipated store closures, occurred for certain restaurants and its Support Center, that required an impairment review of the Company’s long-lived assets. No indicators of impairment were found for the Company’s intangible assets for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023.

Based on the results of the analysis, for the fiscal year ended December 28, 2025, the Company recorded non-cash impairment charges of $11.3 million associated with twelve store locations, which was recorded in impairment and closure costs within the consolidated statement of operations. Of the $11.3 million total non-cash impairment, $9.7 millionwas related to property and equipment, and $1.6 millionwas related to operating lease assets. During the fiscal year ended December 29, 2024, the Company recorded non-cash impairment charges of $1.7 million associated with one store location, which was recorded in impairment and closure costs within the consolidated statement of operations. Of the $1.7 million total non-cash impairment, $1.3 million was related to property and equipment, and $0.4 million was related to operating lease assets. During the fiscal year ended December 31, 2023, the Company recorded non-cash impairment charges of $4.3 million, related to the operating lease asset for the Company’s former Sweetgreen Support Center vacated during fiscal year 2022, which was recorded in restructuring charges within the consolidated statement of operations.

Closure costs include lease and related costs associated with closed restaurants including the amortization of the operating lease asset, and expenses associated with CAM fees and real estate taxes for previously impaired stores. During the fiscal year ended December 28, 2025, the Company recognized closure costs of $0.8 million for three stores that were impaired and closed during the fiscal year ended December 28, 2025 and one previously impaired store that was closed in fiscal year 2023. During the fiscal year ended December 29, 2024, the Company recognized closure costs of $0.5 million.

Leases— The Company leases restaurants and corporate office space under various non-cancelable lease agreements that expire on various dates through 2038. Lease terms for restaurants generally include a base term of 10 years, with options to extend these leases for additional periods of 5 to 15 years. The Company evaluates contracts entered into to determine whether the contract involves the use of property or equipment, which is either explicitly or implicitly identified in the contract. The Company evaluates whether it controls the use of the asset, which is determined by assessing whether it obtains substantially all economic benefits from the use of the asset, and whether it has the right to direct the use of the asset. If these criteria are met and the contract is identified as a lease, then the Company accounts for the contract under the requirements of ASC 842. The Company also evaluates whether the lease will be accounted for as an operating or finance lease based on the terms of the lease agreement, and when determining the lease term, the Company includes reasonably certain option renewal periods. Many of the Company's leases require payment of real estate taxes, CAM costs and other occupancy costs which are included in occupancy and related expenses on the consolidated statements of operations. Occupancy expenses associated with unopened restaurants are recorded separately in pre-opening costs on the consolidated statements of operations. Some of the Company’s operating leases include provisions for payment of a fixed CAM amount per annum, and as such, these payments have been included in the calculation of the operating lease liability.

The Company measured the lease liability by discounting the future fixed contractual payments included in the lease agreement, using either the rate explicit in the lease or its incremental borrowing rate (“IBR”). The IBR used to measure the lease liability is derived from the yield curve commensurate with the credit rating of the Company and further adjusted for seniority based on a notching analysis. The most significant assumption in calculating the IBR is the Company’s credit rating, and the IBR is also subject to judgment.

For leases with a lease term of 12 months or less ("short-term lease"), any fixed lease payments are recognized on a straight-line basis over such term, and are not recognized on the consolidated balance sheets.

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Certain leases contain provisions for contingent rent that require additional rental payments based upon restaurant sales volume. Contingent rent is expensed each period as the liability is incurred, and is not included in the initial measurement of operating lease assets and liabilities.

The Company receives tenant improvement allowances, generally in the form of cash, from some of the landlords of its leased properties. The tenant improvement allowances that are expected to be received are included in the measurement of the initial operating lease liability, which are also reflected as a reduction to the initial measurement of the right-of-use asset and amortized over the applicable lease terms.

Contingencies—The Company is subject to various claims, lawsuits, governmental investigations, and administrative proceedings that arise in the ordinary course of business. The Company accrues a liability and recognizes an expense for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. Estimating liabilities and costs associated with these matters require significant judgment based upon the professional knowledge and experience of management and its legal counsel.

Marketing and Public Relations—Marketing costs, which include the development and production of advertising materials and online marketing tools, are expensed in the period incurred. Marketing expense directly attributable to an individual restaurant is included within other restaurant operating costs. Marketing expense for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023 was $19.0 million, $16.9 million and $14.3 million, respectively, of which $11.3 million, $13.2 million and $10.7 million, respectively, is included in general and administrative expense, $6.8 million, $3.3 million and $3.1 million, respectively, is included in other restaurant operating costs and $0.9 million, $0.4 million, and $0.5 million, respectively, is included in preopening costs in the accompanying consolidated statements of operations.

Restaurant Operating Costs—Restaurant operating costs primarily consist of food, beverage, packaging costs for to-go orders, salaries, benefits, and other expenses related to the Company’s in-store employees, maintenance and utilities at the Company’s restaurants, leasing costs for the Company’s restaurants and delivery and processing fees.

Operating Expenses— Operating expenses primarily consist of operations, technology, finance, legal, human resources, administrative personnel, stock-based compensation, brand-related marketing, depreciation and amortization of fixed assets, and pre-opening costs. Pre-opening costs primarily consist of rent, wages, travel for training and store opening teams, food and other restaurant costs that the Company incurs prior to the opening of a restaurant. These costs are expensed as incurred.

Stock-Based Compensation—The Company recognizes compensation expense resulting from stock-based payments over the period for which the requisite services are provided. The Company uses the Black-Scholes-Merton (“Black-Scholes”) option-pricing model to estimate the fair value of the incentive stock options at the measurement date. Grant date is deemed to be the appropriate measurement date for stock options issued to employees and nonemployees. The use of the Black-Scholes option-pricing model requires the use of subjective assumptions, including the fair value and projected volatility of the underlying common stock and the expected term of the award.

For all stock options granted, the Company calculated the expected term using the simplified method for “plain vanilla” stock option awards. The risk-free interest rate is based on the yield available on U.S. Treasury zero-coupon issues similar in duration to the expected term of the stock-based award. The Company’s common stock has not been publicly traded over the full expected term, and therefore, the Company used the historical volatility of the stock price of similar publicly traded peer companies. The Company utilized a dividend yield of zero, as it had no history or plan of declaring dividends on its common stock.

The grant date fair value of restricted stock units (“RSUs”) is estimated based on the fair value of the Company’s common stock on the date of grant. Prior to the Company’s initial public offering (“IPO”) in November 2021, RSUs granted by the Company vest upon the satisfaction of both a service-based vesting condition, which is typically four years, and a liquidity event-related performance vesting condition. The liquidity event-related performance vesting condition was achieved upon the consummation of the Company's IPO. Stock-based compensation related to the remaining service-based period after the liquidity event-related performance vesting condition was satisfied will be recorded over the remaining requisite service period using

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the accelerated attribution method. Since the Company’s IPO in November 2021, the Company only granted RSUs that vest upon the satisfaction of a service-based vesting condition and the compensation expense for these RSUs is recognized on a straight-line basis over the requisite service period.

The Company has granted founder performance-based restricted stock units (“founder PSUs”) that contain a market condition in the form of future stock price targets. The grant date fair value of the founder PSUs was determined using a Monte Carlo simulation model and the Company estimates the derived service period of the founder PSUs. The grant date fair value of founder PSUs containing a market condition is recorded as stock-based compensation over the derived service period using the accelerated attribution method. If the stock price goals are met sooner than the derived service period, any unrecognized compensation expenses related to the founder PSUs will be expensed during the period the stock price targets are achieved. Provided that each founder continues to be employed by the Company through the derived service period, stock-based compensation expense is recognized over the derived service period, regardless of whether the stock price goals are achieved.

Interest Income—Interest income consists of interest earned on cash and cash equivalents.

Interest Expense—Interest expense includes mainly the interest incurred on outstanding indebtedness, as well as amortization of deferred financing costs, mainly debt origination and commitment fees. Debt origination fees are amortized on a straight-line basis over the commitment period.

Net Loss Per Share—The Company calculated basic and diluted net loss per share by dividing income available to common stockholders by the weighted-average number of shares of common stock during each period.

Diluted net loss per share available to common shareholders was computed by giving effect to all potentially dilutive common stock equivalents outstanding for the period. In periods in which the Company reports a net loss available to common shareholders, diluted net loss per share available to common shareholders is the same as basic net loss per share available to common shareholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported net loss available to common shareholders for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023.

Employee Benefit Plan— The Company sponsors a qualified 401(k) defined contribution plan covering eligible employees. Participants may contribute a portion of their annual compensation limited to a maximum annual amount set by the Internal Revenue Service. The Company previously matched 50% of an eligible employee’s contribution up to 3% of wages. An employee becomes eligible once the individual has worked at the Company for 6 months, has worked 500 or more hours, and is 21 years or older. The Company has temporarily paused this matching contribution, effective in the fourth fiscal quarter of 2022.

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU includes amendments requiring enhanced income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and should be applied either prospectively or retrospectively. The Company adopted ASU 2023-09 for the fiscal year ended December 28, 2025, and applied the new disclosure requirements prospectively to the current annual period. Prior period disclosures have not been adjusted to reflect the new disclosure requirements. See Note 11 Income Taxes in the accompanying notes to the consolidated financial statements for further detail.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU No. 2024-03, "Disaggregation of Income Statement Expenses (Subtopic 220-40)." The ASU requires public entities to disaggregate, in a tabular presentation, certain income statement expenses into different categories, such as purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The guidance is effective for fiscal years beginning after December 15, 2026, with early adoption permitted, and may be applied retrospectively. The Company is

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currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for internal-use software costs by removing all references to prescriptive and sequential software development stages. The new standard uses a probable-to-complete threshold, which requires entities to consider whether significant development uncertainty has been resolved before starting to capitalize software costs and aligns disclosure requirements with ASC 360, Property, Plant, and Equipment. With this new guidance, public companies shall begin capitalizing when both a.) management has authorized and committed funding to the project and b.) it is probable that the project will be completed and software will be used as intended. The guidance is effective for annual and interim reporting periods beginning after December 15, 2027, and may be applied prospectively, retrospectively, or using a modified transition approach, with early adoption permitted. The Company is currently evaluating the impacts of adopting this ASU on its consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11.

The Company reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact to the consolidated financial statements.

2.REVENUE RECOGNITION

Nature of products and services

The Company has one revenue stream. See Note 1 for a description of the revenue recognition policies.

The following table presents the Company’s revenue for the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023 disaggregated by significant revenue category:

Gift Cards and SG Rewards Loyalty

Gift cards and loyalty liability within the accompanying consolidated balance sheets was as follows:

Loyalty Liability 3,528 — —

Total Gift Cards and Loyalty Liability $ 7,177 $ 4,385 $ 2,797

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Revenue recognized from the redemption of gift cards that was included in gift cards and loyalty liability at the beginning of the year was as follows:

3.FAIR VALUE

The following tables present information about the Company’s financial liabilities measured at fair value on a recurring basis:

Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3

(dollar amounts in thousands)

Contingent consideration as of December 28, 2025 was $7.0 million which is included in other current liabilities within the consolidated balance sheets. Contingent consideration as of December 29, 2024 was $15.0 million, of which $9.7 million is included in other current liabilities and $5.3 million is included in contingent consideration within the consolidated balance sheets. The fair value of the contingent consideration was determined based on significant inputs not observable in the market.

Contingent Consideration

On September 7, 2021, the Company closed its acquisition of Spyce, a Boston-based restaurant company powered by automation technology. In connection with the Company’s acquisition the former equity holders of Spyce may receive up to $20 million (in the form of up to 714,285 additional shares of Class A common stock, calculated based on the initial offering price of the Company’s Class A common stock of $28.00 per share sold in the IPO (the “Reference Price”)), contingent on the achievement of certain performance milestones between the closing date of the acquisition and June 30, 2026. Additionally, the former equity holders of Spyce may receive true-up payments in cash, as described here. If as of the second anniversary of the closing date of the acquisition, the 30-Day Volume-Weighted Average Price of the Company’s Class A common stock (“VWAP Price”) is less than the Reference Price, then the Company shall pay to each former equity holder of Spyce that has continually held their respective portion of the 1,316,763 total shares of the Company’s Class A common stock issued in connection with the acquisition during such period, the delta between the Reference Price and the VWAP Price for the upfront portion of the purchase price (“true-up payment”). As of the second anniversary of the closing date of the acquisition, the Company calculated the delta between the Reference Price and the VWAP Price for the upfront portion of the purchase price as $13.62. This resulted in a true-up payment of $10.4 million, due to 570,249 shares that did not meet the continuous holding requirement. The $10.4 million true-up payment is included within financing activities in the consolidated statements of cash flows as the payment is less than the original fair value of contingent consideration.

Additionally, as of the date of the achievement of any of the three milestones, if the VWAP Price as of such milestone achievement date is less than the Reference Price, then the Company shall pay to each former equity holder of Spyce that is eligible to receive a milestone payment the delta between the Reference Price and the VWAP Price for the contingent consideration associated with such milestone. The contingent consideration, excluding the true-up payment, which was calculated as noted above, was valued using the Monte Carlo method. The analysis considered, among other items, the equity value, the contractual terms of the Spyce merger agreement, potential liquidity event scenarios (prior to the IPO), the Company’s credit-adjusted discount rate, equity volatility, risk-free rate, and the probability that milestone targets required for issuance of shares under the contingent consideration will be achieved. During the fourth quarter of fiscal 2023, the first milestone

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was achieved, which resulted in former equity holders of Spyce being eligible to receive $6.0 million, which was paid during the fiscal year ended December 29, 2024. Of this $6.0 million, based on a VWAP Price of $10.20, $2.1 million was issued in Class A common stock, and $3.9 million was issued in cash.

During the second quarter of fiscal 2025, the second milestone was achieved, resulting in the former equity holders of Spyce being eligible to receive $7.0 million, which was paid during the fiscal year ended December 28, 2025. Of this $7.0 million, based on a VWAP Price of $19.40, $4.7 million was issued in the form of Class A common stock, and $2.3 million was paid in cash to the former Spyce Equity holders.

The initial fair value of the contingent consideration at the acquisition date was $16.4 million. Since the acquisition date, the cumulative payments related to the contingent consideration were $23.4 million as of December 28, 2025, of which $6.8 million has been issued in the form of Class A common stock and $16.6 million has been issued in cash. Payments up to the initial fair value of the contingent consideration were included within financing activities within the consolidated statements of cash flows if made in cash, or within non-cash financing activities if made in shares. The second milestone payment, as detailed above, increased the cumulative payments related to the contingent consideration liability above the initial fair value; as such, the cash component of the second milestone payment was included within operating activities within the consolidated statement of cash flows during the fiscal year ended December 28, 2025. Any future cash payments would be recognized within operating activities in the consolidated statements of cash flows.

Subsequent to the fiscal year ended December 28, 2025, the Company completed the sale of Spyce to Wonder. As a result, the third milestone payment was accelerated, with the remaining $7.0 million paid out in early 2026. See Note 16 Assets Held For Sale and Subsequent Events for further details.

The following table provides a roll forward of the aggregate fair values of the Company’s contingent consideration, for which fair value is determined using Level 3 inputs.

(dollar amounts in thousands) Contingent consideration

Change in fair value 3,475

Change in fair value 6,624

Milestone payment (7,000)

Change in fair value (974)

Fair Value Measurements on a Nonrecurring Basis

The following non-financial instruments were measured at fair value, on a nonrecurring basis, as of and for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023, reflecting certain property and equipment and operating leases for which an impairment loss was recognized during the

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corresponding periods within impairment and closure costs and restructuring charges within the consolidated statement of operations. Carrying value after impairment approximates fair value.

Carrying Value at December 28, 2025 Fiscal Year EndedDecember 28, 2025

Total Level 1 Level 2 Level 3 ImpairmentLosses

(dollar amounts in thousands)

Certain property and equipment, net $ — $ — $ — $ — $ 9,677

Carrying Valueat December 29, 2024 Fiscal Year EndedDecember 29, 2024

Total Level 1 Level 2 Level 3 ImpairmentLosses

(dollar amounts in thousands)

Certain property and equipment, net $ — $ — $ — $ — $ 1,347

Carrying Value at December 31, 2023 Fiscal Year EndedDecember 31, 2023

Total Level 1 Level 2 Level 3 ImpairmentLosses

(dollar amounts in thousands)

The fair value of these assets represents a Level 3 fair value measurement. Unobservable inputs include the discount rate, projected restaurant revenues and expenses, and sublease income if the Company is closing the restaurant. For the operating lease assets’ fair value estimate as of December 28, 2025, December 29, 2024, and December 31, 2023,the Company estimated the sublease income through lease expiration and discounted such cash flows using a property specific discount rate of approximately 7.5% to 9.5%.

4.PROPERTY AND EQUIPMENT, NET

Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life. A summary of property and equipment is as follows:

(dollar amounts in thousands) December 28,2025 December 29,2024

Depreciation expense for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023 was $61.2 million, $56.4 million, and $49.5 million, respectively.

As of December 28, 2025, the Company had 11 facilities under construction due to open during 2026. As of December 29, 2024, the Company had nine facilities under construction. Depreciation commences after a store opens and the related assets are placed in service.

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5.GOODWILL AND INTANGIBLE ASSETS, NET

The following table presents the changes in the Company’s Goodwill balance:

Disposal of Goodwill in Spyce Transaction (8,177)

The change in the goodwill balance recognized during the fiscal year ended December 28, 2025 is attributable to the Company’s sale of Spyce. See Note 16 for further details. There was no change in the carrying value of Goodwill during the fiscal year ended December 29, 2024.

The following table presents the Company’s intangible assets, net balances:

(dollar amounts in thousands) December 28,2025 December 29,2024

Developed technology — 20,050

The change in the developed technology intangible asset balance is attributable to the Company’s sale of Spyce, wherein the balance has been reclassified to assets held for sale on the consolidated balance sheets for the fiscal year ended December 28, 2025. See Note 16 for further details.

Amortization expense for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023 was $10.3 million, $11.0 million, and $10.0 million, respectively. Estimated amortization for each of the next five years is as follows:

(dollar amounts in thousands)

6.ACCRUED EXPENSES

Accrued expenses consist of the following:

(dollar amounts in thousands) December 28,2025 December 29,2024

Accrued general and sales tax 6,588 4,625

Accrued settlements and legal fees 3,723 3,529

Rent deferrals and accrued rent 1,036 1,220

7.DEBT

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As of December 28, 2025 and December 29, 2024, the Company had no outstanding debt obligations.

The Company’s prior revolving credit facility with EagleBank expired pursuant to its terms on December 13, 2024 and was not renewed. The facility provided for borrowings up to $45.0 million in the aggregate principal amount, including the issuance of letters of credit up to $3.5 million. The Company did not utilize any borrowings or letters of credit under this facility during its term. In both fiscal years 2024 and 2023, the Company recognized $0.1 million of interest expense related to the amortization of loan origination fees associated with the facility.

8.LEASES

The components of lease cost were as follows:

Sublease income General and administrative expense — — (356)

During the fiscal years ended December 28, 2025 and December 29, 2024, the Company recorded non-cash impairment charges related to operating lease assets of $1.6 million and $0.4 million, respectively, which were recorded within impairment and closure costs in the consolidated statements of operations. During the fiscal year ended December 31, 2023, the Company recorded non-cash impairment charges related to operating lease assets of $4.3 million, all of which was recorded within restructuring charges in the consolidated statements of operations. See Note 1.

As of December 28, 2025, future minimum lease payments for operating leases consisted of the following:

(dollar amounts in thousands)

Total lease liabilities $ 354,494

As of December 28, 2025 the Company had additional operating lease commitments of $14.6 million for non-cancelable leases that have not yet commenced, which the Company anticipates will commence in fiscal year 2026. The nature of such lease commitments is consistent with the nature of the leases that the Company has executed thus far.

A summary of lease terms and discount rates for operating leases as of December 28, 2025 and December 29, 2024 is as follows:

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Weighted-average remaining lease term (years):

Weighted-average discount rate:

Supplemental cash flow information related to leases as of December 28, 2025, December 29, 2024 and December 31, 2023 as follows:

Cash paid for amounts included in the measurement of lease liabilities:

Right-of-use assets obtained in exchange for lease obligations:

9.COMMON STOCK

The Company has a dual class common stock structure, whereby the Class A common stock is entitled to one vote per share and the Class B common stock is entitled to 10 votes per share. The Class A and Class B common stock have the same dividend and liquidation rights. Any founder’s shares of Class B common stock will convert automatically into Class A common stock, on a one-to-one basis, upon either the (i) the sale or transfer of such share of Class B common stock (except for certain permitted transfers described in the Company’s amended and restated certificate of incorporation, including transfers for tax and estate planning purposes or to any other founder or any affiliate of any founder) or (ii) the one-year anniversary of the death or permanent disability of such founder.

Additionally, each outstanding share of the Company’s Class B common stock will convert automatically into one share of the Company’s Class A common stock on the final conversion date, defined as the earlier of (i) the nine-month anniversary of the death or permanent disability of the last of the founders; (ii) the last trading day of the fiscal year during which the 10th anniversary of the effectiveness of the registration statement for the Company’s IPO occurs, and (iii) the date specified by a vote of the holders of a majority of the outstanding shares of Class B common stock; provided, however, that the final conversion date may be extended by the affirmative vote of the holders of the majority of the voting power of the then-outstanding shares of Class A common stock not held by a founder or an affiliate or permitted transferee of a founder and entitled to vote generally in the election of directors, voting together as a single class.

Class A and Class B common stock are collectively referred to as “common stock” throughout the notes to the consolidated financial statements, unless otherwise noted.

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As of December 28, 2025 and December 29, 2024, the Company had reserved shares of common stock for issuance in connection with the following:

Shares reserved for achievement of Spyce milestones 250,000 500,000

10.STOCK-BASED COMPENSATION

2021 Equity Incentive Plan

During the fiscal year ended December 26, 2021, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”), which allows for issuance of stock options (including incentive stock options and non-qualified stock options), restricted stock units (“RSUs”), including performance-based awards, and other types of awards. The maximum number of shares of common stock that may be issued under the 2021 Plan is 35,166,753, which is the sum of (i) 11,500,000 new shares, plus (ii) an additional number of shares consisting of (a) shares that were available for the issuance of awards under any prior equity incentive plans in place (which include the Company’s 2009 Stock Plan and 2019 Equity Incentive Plan (collectively, the “Prior Stock Plans”)) prior to the time the Company’s 2021 Plan became effective and (b) any shares of the Company’s common stock subject to outstanding stock options or other stock awards granted under the Prior Stock Plans that on or after the Company’s 2021 Plan became effective, terminate or expire prior to the exercise or settlement; are not issued because the award is settled in cash; are forfeited because of the failure to vest; or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price. The total number of shares available for grant as of December 28, 2025, was 6,652,380. Options granted generally have vesting terms between twelve months and four years and have a contractual life of 10 years.

The Company issues shares of Class A common stock upon the vesting and settlement of RSUs and upon the exercises of stock options under the 2021 Plan. The 2021 Plan is administered by the Company’s board of directors (the “Board”), or a duly authorized committee of the Board. Options granted to members of the Board generally vest immediately.

2009 Stock Plan and 2019 Equity Incentive Plan

Prior to the Company’s IPO, the Company granted stock options, RSUs and performance-based restricted stock awards (“PSUs”) to its employees, as well as non-employees (including directors and others who provide substantial services to the Company) under the Prior Stock Plans. Under the Prior Stock Plans, the Company was permitted to grant incentive stock options to the Company’s employees and non-qualified stock options to the Company’s employees and non-employees, as well as stock appreciation rights, restricted stock awards, RSUs (including PSUs), and other forms of stock awards to the Company’s employees, directors and consultants and any of the Company’s affiliated employees and consultants.

Options granted in the fiscal year ended December 26, 2021 and prior generally have vesting terms between one year and four years and have a contractual life of 10 years. No further stock awards will be granted under the Prior Stock Plans now that the 2021 Plan is effective; however, awards outstanding under the Prior Stock Plans continue to be governed by their existing terms.

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Spyce Acquisition

In conjunction with the Spyce acquisition, the Company issued shares of restricted stock that were issued to certain Spyce employees. As the value is fixed, the grant date fair value of these shares represents the fair value of the shares on the acquisition date. For the fiscal year endedDecember 31, 2023, the Company recognized stock-based compensation expense of $2.4 million related to the vested portion of such shares.

2021 Employee Stock Purchase Plan

In conjunction with the IPO, the Board adopted, and the Company’s stockholders approved, the Company’s 2021 employee stock purchase plan (the “ESPP”). The Company’s ESPP authorizes the issuance of 3,000,000 shares of common stock under purchase rights granted to the Company’s employees or to the employees of any of its designated affiliates. The number of shares of the Company’s common stock reserved for issuance will automatically increase on January 1 of each year for a period of 10 years, beginning January 1, 2023, by the lesser of (i) 1% of the total number of shares of the Company’s common stock outstanding on December 31 of the immediately preceding year; and (ii) 4,300,000 shares, except before the date of any such increase, the Board may determine that such increase will be less than the amount set forth in clauses (i) and (ii). On January 1, 2023, the ESPP authorized shares increased by 1,111,331 shares to 4,111,331 in accordance with the above. The Board delegated the authority to manage the ESPP to the Compensation Committee of the Board, which determined that there would be no increase in the share reserve under the ESPP in 2024 or 2025.

As of December 28, 2025, there had been no offering period or purchase period under the ESPP, and no such period will begin unless and until determined by the administrator.

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Stock Options

The Company grants stock options to its employees, as well as nonemployees (including directors and others who provide substantial services to the Company) under the 2021 Plan.

The following table summarizes the Company’s stock option activity for the fiscal years ended December 28, 2025 and December 29, 2024:

The total intrinsic value of options exercised in fiscal years 2025, 2024 and 2023 was $4.3 million, $50.8 million and $7.5 million, respectively. The weighted-average fair value of options granted in fiscal years 2025, 2024 and 2023 was $8.24, $9.72, and $9.07, respectively, all of which were granted to employees.

The fair value of each option granted has been estimated as of the date of the grant using the Black-Scholes option-pricing model with the assumptions during the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023 included in the table below. The Company has elected to account for forfeitures as they occur.

Dividend yield 0 % 0 % 0 %

During the fiscal year ended December 28, 2025, the Company approved a modification to certain stock option awards in connection with the transition of a former executive from an employee to a non-employee consultant. The modification provided for (i) accelerated vesting of unvested awards, (ii) continued vesting of certain awards during the consulting period, and (iii) an extension of the post-termination exercise period, pertaining to a total of 924,097 options. The incremental expense related to each modified option has been estimated as of the modification date using the Black-Scholes option-pricing model and will be recognized as additional stock-based compensation expense over the remaining requisite service period. During the fiscal year ended December 28, 2025 the Company recognized $1.5 million of incremental expense related to this modification, which was recorded within total stock-based compensation expense for the year. These options have a weighted-average exercise price of $10.39. The Company expects to recognize the remaining incremental stock option expense of $1.4 million related to this modification across the remaining three month consulting period in fiscal year 2026.

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Additionally, during the fiscal year ended December 28, 2025, the Company approved a modification to certain stock option awards in connection with the resignation of a former executive. The modification provided for an extension of the post-termination exercise period of certain stock options through their respective maturity dates. In total, 2,471,052 options were subject to these changes. As a result of the modification, the Company recognized an incremental stock-based compensation expense of $6.1 million, which was recognized in full on the date of modification within fiscal year 2025. The options have a weighted-average exercise price of $6.77.

Fair Value of Common Stock—The Board determines the fair market value of its common stock based on its closing price as reported on close of business the day immediately preceding the date of grant on the New York Stock Exchange.

Risk-Free Interest Rate—The yield on actively traded non-inflation indexed U.S. Treasury notes with the same maturity as the expected term of the underlying options was used as the average risk-free interest rate.

Expected Term—The expected term of options granted to was determined based on management’s expectations of the options granted, which are expected to remain outstanding. The Company calculated the expected term using the simplified method for “plain vanilla” stock option awards.

Expected Volatility—Given the timing of the IPO occurring in 2021, there is not sufficient share price history that extends through the expected term of the options, as such, the Company has elected to use an approximation based on the volatility of other comparable public companies, which compete directly with the Company, over the expected term of the options.

Dividend Yield—The Company has not issued regular dividends on common shares in the past nor does the Company expect to issue dividends in the foreseeable future. As such, the dividend yield has been estimated to be zero.

As of December 28, 2025, there was $22.5 million in unrecognized compensation expense related to unvested stock options arrangements which is expected to be recognized over a weighted-average period 2.26 years.

Restricted Stock Units and Performance Stock Units

Restricted stock units

During the fiscal years ended December 28, 2025 and December 29, 2024, the Company issued 752,781 and 535,789 RSUs, respectively, to certain employees, which vest upon the satisfaction of certain service periods. The fair value of these RSUs was determined based on the Company’s closing stock price the business day immediately preceding the date of grant. The service period of these RSUs is satisfied over a range of 0 to 4 years. The RSUs are excluded from common stock issued and outstanding until the satisfaction of these vesting conditions and are not considered a participating security for purposes of calculating net loss per share attributable to common stockholders.

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The following table summarizes the Company’s RSU activity for fiscal year ended December 28, 2025:

During the fiscal year ended December 28, 2025, the Company approved a modification to certain restricted stock units awards in connection with the transition of a former executive from an employee to a non-employee consultant. The modification provided for (i) continued vesting of certain awards during the consulting period and (ii) immediate vesting of any remaining unvested restricted stock units at the completion of the consulting period. The fair value of each modified RSU has been estimated using the current stock price as of the modification date. During the fiscal year ended December 28, 2025 the Company recognized $0.15 million of incremental expense related to this modification, which was recorded within total stock-based compensation expense for the year. The Company expects to recognize the remaining incremental stock option expense of $0.15 million related to this modification across the remaining three month consulting period in fiscal year 2026.

The weighted-average grant date fair value per RSU granted during the fiscal years ended December 29, 2024 and December 31, 2023 was $20.81and$9.07, respectively. As of December 28, 2025, unrecognized compensation expense related to RSUs was $7.3 million and is expected to be recognized over a weighted-average period of 2.61 years. The fair value of shares earned as of the vesting date during the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023 was $12.7 million,$13.7 million, and $6.3 million, respectively.

Performance stock units

In October 2021, the Company granted 2,100,000 PSUs to each founder (the “founder PSUs”) for a total of 6,300,000 PSUs, under the 2019 Equity Incentive Plan. The founder PSUs vest upon the satisfaction of a service condition and the achievement of certain stock price goals. The founder PSUs are excluded from common stock issued and outstanding until the satisfaction of these vesting conditions and are not considered a participating security for purposes of calculating net loss per share attributable to common stockholders.

The founder PSUs are eligible to vest beginning on the one-year anniversary of the effective date of the registration statement of the Company’s IPO, and expire ten years after the IPO date. The founder PSUs are comprised of seven tranches that are eligible to vest based on the achievement of stock price goals, ranging from $30.0 - $75.0 per share, measured over a consecutive 90-calendar day trailing trading period during the performance period as set forth below.

Company Stock Price Target Number of PSUs Eligible to Vest

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The Company estimated the grant date fair value of the founder PSUs based on multiple stock price paths developed through the use of a Monte Carlo simulation model within a hybrid framework with two possible scenarios (IPO and Change of Control). A Monte Carlo simulation model also calculates a derived service period for each of the seven vesting tranches, which is the measure of the expected time to achieve each Company stock price target, as described above. A Monte Carlo simulation model requires the use of various assumptions, including the underlying stock price, volatility, expiration term, and the risk-free interest rate as of the valuation date, corresponding to the length of time remaining in the performance period, and expected dividend yield. The derived service period calculation also requires the cost of equity assumption to be used in the Monte Carlo simulation model. Term and volatility are typically the primary drivers of this valuation. An expiration term of 10 years (as defined in the grant agreements) was considered in the IPO scenario while an expiration term of 3 years was considered in the Change of Control scenario. A volatility of 52.0 percent was considered within the IPO scenario consistent with the maximum term to expiration; whereas, a common stock volatility of 90.5 percent was considered in the Change of Control scenario, which is based on the ASC 718 analysis. The weighted-average grant date fair value of the founders PSUs was $16.35 per share. The Company continues to recognize the total stock-based compensation expense of $103.0 million over the derived service period of each tranche, which is between 1.7 to 4.4 years, using the accelerated attribution method as long as the founders satisfy the service-based vesting condition.

As of December 28, 2025 unrecognized compensation expense related to PSUs was $0.6 million and is expected to be recognized over a weighted-average period of 0.22 years.

During the fiscal year ended December 29, 2024, the service condition and stock price goal for the first two tranches were met, resulting in 600,000 PSUs vesting and being released for each founder during that period (for a total of 1,800,000 PSUs vesting). The fair value of the total shares released as of the vesting date during the fiscal year ended December 29, 2024 was $67.8 million, solely related to the founder PSUs, and the Company incurred $1.1 million in payroll taxes associated with the transactions which are included in general and administrative expenses within the accompanying consolidated statement of operations.

Subsequent to the Company’s IPO, the Company issued 321,428 PSUs to the Spyce founders based on three separate performance-based milestone targets. The Company will recognize stock compensation expense related to each performance-based milestone target as it becomes probable of occurring, based on the stock price on the date of grant. During the fiscal year ended December 29, 2024, the Company modified the number of shares underlying these grants and the vesting terms to remove the performance-based component, resulting in the total number of shares decreasing to 85,395, all of which vested on March 15, 2025. The expense related to these RSUs is included within the RSU section above.

For both of the fiscal years ended December 28, 2025 and December 29, 2024 there were 4,500,000 PSUs outstanding, with a weighted-average grant date fair value of $15.62. There was no PSU activity during the fiscal year ended December 28, 2025.

A summary of stock-based compensation expense recognized fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023 is as follows:

11.INCOME TAXES

The Company’s entire pretax loss for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023 was from its U.S domestic operations. For the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023, the Company recorded an income tax expense (benefit) of $0.05 million, $(1.3) million, and $0.4 million, respectively.

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The components of the provision for income taxes for the fiscal year ended December 28, 2025, December 29, 2024, and December 31, 2023 are as follows (in thousands):

Current:

Deferred:

Total provision for income taxes (benefit) expense $ 46 $ (1,301) $ 379

The following table provides the updated requirements of ASU 2023-09 for 2025. See Note 1: Description of business and summary of significant accounting policies - recently adopted accounting pronouncements.

The effective income tax rate for the fiscal year ended December 28, 2025 differs from the statutory federal income tax rate as follows (dollars in thousands):

(dollar amounts in thousands) December 28,2025

U.S. federal income tax at statutory rate $ (28,320) 21.0 %

State and local income taxes, net of federal income tax effect(1) (342) 0.3 %

Changes in valuation allowance 29,020 (21.5 %)

Nontaxable or nondeductible items

Officer compensation 4,072 (3.0 %)

Changes in unrecognized tax benefits 1,897 (1.4 %)

Other Adjustments

Federal net operating loss true-up (1,437) 1.1 %

Outside basis difference in Spyce Foods (6,990) 5.2 %

Effective income tax rate $ 46 — %

(1)For the fiscal year ended December 28, 2025, the state of Texas contributes to the majority (greater than 50%) of the tax effect in this category.

As previously disclosed for the fiscal years ended December 29, 2024 and December 31, 2023, prior to the adoption of ASU 2023-09, the Company’s effective income tax rate differs from the statutory federal income tax rate as follows:

Federal statutory rate 21.0 % 21.0 %

Effect of:

State taxes, net of federal benefit 4.2 % 6.7 %

Permanent differences (1.9 %) (0.8 %)

Change in valuation allowance (19.5 %) (18.5 %)