Sweetgreen shares jump 15% after Taco Bell linked to explosive diarrhea parasite

Sweetgreen shares jumped 15% Friday, paring back a massive four-day slump, after regulators traced an explosive diarrhea outbreak back to Taco Bell restaurants – sparing the salad bowl chain’s reputation.

The fast-casual salad chain – known for its so-called “slop bowls” – saw its stock soar as much as 21% Friday for its biggest intraday gain since August 2024. It plummeted nearly 26% from Monday through Thursday’s close as investors feared consumers would steer clear of fresh produce as thousands of people across several US states were sickened by cyclosporiasis.

The Centers for Disease Control and Prevention and the Food and Drug Administration said late Thursday that they had linked the outbreak to shredded iceberg lettuce served at a handful of Taco Bell restaurants in Indiana, Kentucky, Michigan, Ohio and West Virginia. On Friday, Bloomberg reported that Taylor Farms, a California-based fresh produce supplier, is preparing to recall ingredients linked to the outbreak.

Shares of Sweetgreen are still down nearly 15% this week, while Taco Bell has fallen about roughly 8% during the same timeframe – similarly regaining some losses after the fast-food giant said it has removed lettuce from the tainted supplier nationwide.

The FDA said it was able to link the outbreak to the burrito-and-taco chain after more than 1,644 sick people suffering from cyclosporiasis reported eating at Taco Bell locations in five states.

Regulators said they are working directly with the unnamed supplier – now reportedly believed to be Taylor Farms – to determine if the contaminated iceberg lettuce was sent to any other partners.

Cyclospora is a microscopic parasite that is typically transmitted when infected feces contaminates food or water, according to the FDA. It can cause an intestinal illness called cyclosporiasis, characterized by symptoms like watery diarrhea, loss of appetite, weight loss, stomach cramps or pain, bloating, gas, nausea and fatigue, according to food safety regulators. Some people may become infected and be asymptomatic.

The main risk from cyclosporiasis is dehydration that can lead to more serious complications. Those most at risk include people with weakened immune systems, the elderly and children.