Cava stock plummets after company lowers forecast on disappointing same-store sales growth
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Cava also announced an investment in Hyphen, a restaurant automation startup.
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August 12, 2025
08:26 PM
CNBC
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In this articleCAVA your favorite stocksCREATE FREE ACCOUNTCustomers arrive at a Cava restaurant in New York City on June 22, 2023.Brendan Mcdermid | ReutersCava on Tuesday lowered its full-year forecast for same-store sales growth after a disappointing second quarter.For the full year, Cava now anticipates same-store sales growth of 4% to 6%, down from its prior range of 6% to 8%.s of the company plunged more than 20% in ext trading
The stock has fallen 40% this year, including the after-hours move.Here's what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:Earnings per : 16 cents vs. 13 cents expectedRevenue: $280.6 million vs. $285.6 million expectedThe restaurant company reported second-quarter net income of $18.4 million, or 16 cents per , down from $19.7 million, or 17 cents per , a year earlier.Net restaurant sales climbed 20% to $278.2 million, largely thanks to new restaurant openings.The chain's same-store sales, a metric that only tracks the performance of restaurants that have been open at least a year, rose 2.1% during the quarter
While Cava managed to buck the industry trend of same-store sales declines, Wall Street was jecting growth of 6.1%, according to StreetAccount estimates.Cava said its quarterly traffic was "roughly flat." A year earlier, the company's same-store sales climbed 14.4%, fueled by nearly double-digit traffic growth
At the time, Cava CEO and co-founder Brett Schulman credited the introduction of its grilled steak option as one reason customers kept coming to restaurants during the quarter.CFO Tricia Tolivar told CNBC on Tuesday that the second quarter started off with strong same-store sales growth, which led the company to reiterate its prior outlook when it reported its first-quarter results
However, she said, once the chain celebrated the one-year launch of grilled steak, it saw that growth slow.Rival fast-casual chains have also struggled this quarter with slumping sales
Chipotle Mexican Grill reported same-store sales declines of 4%, while salad chain Sweetgreen saw its stock plummet after the company cut its outlook for the second straight quarter.Aside from lowering its same-store sales forecast, Cava reiterated other key financial jections for the full year
The company still anticipates adjusted earnings before interest, taxes, depreciation and amortization of $152 million to $159 million
Cava also maintained its forecast for restaurant-level fit margins of 24.8% to 25.2%.Cava on Tuesday also announced that it participated in a $25 million Series B funding round for Hyphen, which automates plate and bowl portioning
Chipotle Mexican Grill, which has already invested in Hyphen, led the funding round with Cava."By piloting Hyphen's automated digital makeline, we have the opportunity to increase order accuracy and speed during peak digital hours, while reducing complexity for our team members," Schulman said in a statement.
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