Sweetgreen Inc. shares jumped on Friday, recovering from a four-day decline, after U.S. regulators linked a cyclospora parasite outbreak to shredded iceberg lettuce served at Taco Bell restaurants. The salad chain's stock rose as much as 21% by 11:55 a.m. in New York, marking its largest intraday gain since August 2024. This surge helped to offset a 26% slump in the stock from Monday through Thursday's close. Earlier, Sweetgreen's shares had fallen due to fears that the growing outbreak of the diarrhea-causing cyclospora parasite would reduce demand for fresh produce and greens.
The Centers for Disease Control and Prevention (CDC) announced late Thursday that the outbreak was traced to shredded iceberg lettuce served at Taco Bell locations in Indiana, Kentucky, Michigan, Ohio, and West Virginia. Following this, lettuce supplier Taylor Farms informed U.S. regulators on Friday that it was preparing a recall of ingredients associated with the outbreak. A Sweetgreen spokesperson stated on Wednesday that discussions with suppliers indicated no ingredients in its supply chain had been implicated in the investigation.
In response to the news, shares of Taco Bell's parent company, Yum! Brands Inc., also saw a recovery, paring their approximately 6% drop for the week. Taco Bell had already voluntarily removed lettuce from the affected supplier nationwide. Despite Friday's rally, Sweetgreen's stock is still down nearly 12% for the week and trades approximately 86% below its 2021 record high.
