Cava Stock Plunges Amid Sales Slowdown, Revised Forecast
August 13, 2025, 9:52 am
Location: United States, California, Los Angeles
Employees: 1001-5000
Founded date: 2007
Total raised: $789.5M
Cava’s shares plummeted after lowering its annual sales forecast. Same-store growth severely missed projections. Economic pressures and flat customer traffic are key factors. Despite setbacks, Cava maintains profit targets and boosts expansion plans. An investment in automation underscores a focus on future efficiency. The fast-casual market faces a reckoning.
Cava shares plummeted. The Mediterranean restaurant chain faced a harsh market reaction. Its stock dropped more than 20% in extended trading. This followed a disappointing financial report. The company lowered its full-year sales forecast. This marks a significant recalibration.
Revenue missed analyst estimates. Cava reported $280.6 million. Experts expected $285.6 million. The miss was modest but impactful. Earnings per share, however, beat expectations. Cava posted 16 cents per share. This surpassed the 13 cents projected.
Same-store sales growth disappointed investors most. This metric tracks performance at established locations. Cava reported 2.1% growth. Wall Street had anticipated much stronger results. Estimates ranged from 6.1% to 6.47%. The gap was substantial. This signals a slowdown in core business.
Customer traffic remained largely flat. This contrasts sharply with prior periods. A year earlier, traffic surged. Double-digit growth was common. This was partly fueled by a popular grilled steak option. The anniversary of this launch created a difficult comparison. Growth decelerated significantly after this high benchmark.
The broader economic environment plays a role. Consumers face mounting uncertainties. Inflationary pressures persist. Many opt for more affordable meals. Dining out frequency has decreased. This trend impacts the entire restaurant sector. Discretionary spending shifts.
Cava is not alone in its struggles. Other fast-casual chains feel the pinch. Chipotle Mexican Grill reported sales declines. Its same-store sales dropped 4%. Sweetgreen also faced headwinds. The salad chain cut its outlook. The industry grapples with slowing demand. This indicates a challenging landscape for quick-service dining.
Despite the revised sales outlook, Cava holds firm on other targets. The company reiterated its adjusted EBITDA forecast. It expects $152 million to $159 million. Restaurant-level profit margins also held steady. Cava projects 24.8% to 25.2%. This suggests confidence in operational efficiency.
Expansion remains a key strategy. Cava raised its target for new restaurant openings. It now anticipates 68 to 70 new locations this year. This is up from an earlier range of 64 to 68. The company aims to capitalize on resilient demand for its menu. Growth through new footprints is critical.
Investment in technology marks a forward step. Cava announced participation in a funding round for Hyphen. Hyphen is a restaurant automation startup. It automates plate and bowl portioning. This aims to boost order accuracy. It also seeks to increase speed during peak digital hours. The technology reduces complexity for team members. Chipotle Mexican Grill also backed Hyphen. This suggests a broader industry trend towards automation.
Pricing strategy remains disciplined. Cava does not plan to increase menu prices. The company aims to absorb inflationary costs. This approach prioritizes customer affordability. It seeks to maintain value perception. This can be challenging in a rising cost environment.
The market reacted swiftly and harshly. Cava’s stock decline was steep. It reflects investor concern. This is the first time Cava cut its annual sales growth target since its IPO. The company went public in June 2023. Its shares had more than doubled since then. The recent plunge erased much of those gains.
Investor confidence faces a test. The company’s ability to execute its revised strategy is paramount. New store openings must perform strongly. Operational efficiencies will be vital. The fast-casual segment demands adaptability. Cava must navigate a shifting consumer landscape. Its performance in coming quarters will reveal its resilience. The industry watches closely. The path ahead is clear: focus on growth, efficiency, and customer value.
Cava shares plummeted. The Mediterranean restaurant chain faced a harsh market reaction. Its stock dropped more than 20% in extended trading. This followed a disappointing financial report. The company lowered its full-year sales forecast. This marks a significant recalibration.
Revenue missed analyst estimates. Cava reported $280.6 million. Experts expected $285.6 million. The miss was modest but impactful. Earnings per share, however, beat expectations. Cava posted 16 cents per share. This surpassed the 13 cents projected.
Same-store sales growth disappointed investors most. This metric tracks performance at established locations. Cava reported 2.1% growth. Wall Street had anticipated much stronger results. Estimates ranged from 6.1% to 6.47%. The gap was substantial. This signals a slowdown in core business.
Customer traffic remained largely flat. This contrasts sharply with prior periods. A year earlier, traffic surged. Double-digit growth was common. This was partly fueled by a popular grilled steak option. The anniversary of this launch created a difficult comparison. Growth decelerated significantly after this high benchmark.
The broader economic environment plays a role. Consumers face mounting uncertainties. Inflationary pressures persist. Many opt for more affordable meals. Dining out frequency has decreased. This trend impacts the entire restaurant sector. Discretionary spending shifts.
Cava is not alone in its struggles. Other fast-casual chains feel the pinch. Chipotle Mexican Grill reported sales declines. Its same-store sales dropped 4%. Sweetgreen also faced headwinds. The salad chain cut its outlook. The industry grapples with slowing demand. This indicates a challenging landscape for quick-service dining.
Despite the revised sales outlook, Cava holds firm on other targets. The company reiterated its adjusted EBITDA forecast. It expects $152 million to $159 million. Restaurant-level profit margins also held steady. Cava projects 24.8% to 25.2%. This suggests confidence in operational efficiency.
Expansion remains a key strategy. Cava raised its target for new restaurant openings. It now anticipates 68 to 70 new locations this year. This is up from an earlier range of 64 to 68. The company aims to capitalize on resilient demand for its menu. Growth through new footprints is critical.
Investment in technology marks a forward step. Cava announced participation in a funding round for Hyphen. Hyphen is a restaurant automation startup. It automates plate and bowl portioning. This aims to boost order accuracy. It also seeks to increase speed during peak digital hours. The technology reduces complexity for team members. Chipotle Mexican Grill also backed Hyphen. This suggests a broader industry trend towards automation.
Pricing strategy remains disciplined. Cava does not plan to increase menu prices. The company aims to absorb inflationary costs. This approach prioritizes customer affordability. It seeks to maintain value perception. This can be challenging in a rising cost environment.
The market reacted swiftly and harshly. Cava’s stock decline was steep. It reflects investor concern. This is the first time Cava cut its annual sales growth target since its IPO. The company went public in June 2023. Its shares had more than doubled since then. The recent plunge erased much of those gains.
Investor confidence faces a test. The company’s ability to execute its revised strategy is paramount. New store openings must perform strongly. Operational efficiencies will be vital. The fast-casual segment demands adaptability. Cava must navigate a shifting consumer landscape. Its performance in coming quarters will reveal its resilience. The industry watches closely. The path ahead is clear: focus on growth, efficiency, and customer value.