![Jim Cramer digs into Sweetgreen](https://freeamericanetwork.com/wp-content/uploads/2024/08/cramer-says-it-might-be-time-to-start-building-a-position-in-sweetgreen.jpg)
CNBC’s Jim Cramer told investors it could be wise to start buying stock of Sweetgreen, a salad chain that has been the best-performing restaurant company on the Russell 3000, according to FactSet.
The stock took a dip on Tuesday after a downgrade from Piper Sandler. But Cramer wasn’t deterred, saying thye report was part of a broader bearish outlook on the fast casual dining space. And despite the downgrade, the firm said its long-term outlook on the stock “remains bright.”
“If Sweetgreen stock keeps getting slammed like it has earlier this week, I think you should pounce, because this is no longer the unprofitable salad chain of two or three years ago,” Cramer said. “Not only did Sweetgreen get religion on profitability, it eagerly slaughtered the sacred cow of being a pure salad chain, and now it’s serving that cow for dinner. You’ve got my blessing to pick at the stock here and then maybe buy some more if there’s additional weakness.”
Sweetgreen is up about 193% year-to-date, followed by Cava up more than 128% and Brinker International — which owns several casual restaurants including Chili’s — up more than 54%.
Cramer had been wary of Sweetgreen since it went public in 2021, but he said much has changed since then, noting its same-store sales growth has returned after a Covid slowdown. According to Cramer, the company owes much of its success to new offerings in addition to salads — like protein-filled bowls and other meals. He said these non-salad options brought in new customers and improved traffic during dinner hours and on weekends. During its earnings call earlier this month, management cited these protein plates — specifically a new “caramelized garlic steak” dish — as growth drivers.
The company also has had a “structural advantage” because of its focus on healthy meals and higher-income customers, Cramer said, as the broader fast food landscape faces pushback from lower-income consumers. He also said Sweetgreen has done well to improve its loyalty program and digital ordering system.
“I’d be tempted to start building a small position in Sweetgreen here,” Cramer said. “However, considering that we’re headed into a seasonally choppy period for stocks, I wouldn’t be surprised if this one gets knocked around a bit.”
Sweetgreen did not immediately respond to a request for comment.
![Sweetgreen's pullback is the reason i'm willing to endorse it, says Jim Cramer](https://freeamericanetwork.com/wp-content/uploads/2024/08/cramer-says-it-might-be-time-to-start-building-a-position-in-sweetgreen-1.jpg)