Key Stats for Cava Stock
- 1-Day Price Change for Cava stock: 9.4%
- $CAVA Share Price as of Nov. 5: $639.53
- 52-Week High: $886
- $CAVA Stock Price Target: $879.60
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What Happened?
Cava (CAVA) stock dropped almost 3% yesterday after the Mediterranean fast-casual chain cut its full-year guidance for the second consecutive quarter, citing weakness among younger diners.
The company reported third-quarter earnings of $0.12 per share, in line with expectations. Revenue came in at $292.4 million, marginally above the $291.9 million consensus.
Same-store sales rose 1.9%, missing Wall Street’s 2.8% estimate, with flat traffic offset by menu price increases and mix shift toward premium proteins.
For the full year, Cava lowered its same-store sales growth outlook to 3% to 4% from a prior range of 4% to 6%. The company also reduced its restaurant-level profit margin guidance to 24.4% to 24.8% from 24.8% to 25.2%.
CFO Tricia Tolivar pointed specifically to the 25-to-34 age demographic as the weak spot. “When you look at different age demographics of fast casual, the 25- to 34-year-old consumer seems to be impacted a bit more than others,” she said in an interview.
Tolivar attributed the pullback to higher unemployment rates among younger consumers, resumed student loan payments, and general uncertainty created by tariffs. She noted demand fell further as the company entered the fourth quarter.
Despite the slowdown, Cava opened 17 net new locations in Q3, bringing its total count to 415 restaurants across 28 states. Net sales grew 20% year-over-year to $292.2 million, driven entirely by new unit growth.
Net income fell to $14.7 million, or $0.12 per share, from $18 million a year earlier as the company invested in operations, technology and people development.
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What the Market Is Telling Us About Cava Stock
The sharp decline in Cava stock reflects investor concerns about slowing momentum in same-store sales, after the company delivered double-digit comps for most of 2024. The stock has now fallen 54% year-to-date as growth has decelerated.
What’s notable is that Cava is still gaining market share despite the slower traffic. Tolivar suggested younger consumers may be cooking at home or packing lunches rather than trading down to cheaper fast food.
“It appears that the consumer is being more thoughtful around their dining occasions, and how frequently they are doing that,” she said.
Fast-casual rival Chipotle reported similar weakness among 25-to-34 year-olds when it released earnings this week, suggesting this is an industry-wide issue rather than a Cava-specific problem.
However, Cava is seeing stronger sales growth from lower-income consumers, which Tolivar credited to the chain’s decision to keep menu prices below inflation.
Since 2019, Cava has taken less than 17% in cumulative price increases compared to a 34% industry average.
CEO Brett Schulman emphasized the company’s long-term positioning and noted that while restaurant industry transactions are down 7% since 2019, Cava’s transactions are up in the mid-20% range over that period.
The company has gained significant market share by delivering Mediterranean cuisine at accessible price points—bowls range from $10.65 to $12.95 in New York City, the most expensive market.
New restaurant performance remains strong, with the 2025 class trending above $3 million in average unit volumes and productivity exceeding 100%.
Same-store sales accelerated on a two-year basis by 350 basis points to 20%, suggesting the underlying business remains healthy despite near-term headwinds.
Management is doubling down on operational execution and guest experience rather than discounting to drive traffic.
The company rolled out a new kitchen display system to 200-plus locations, installed TurboChef ovens across all restaurants, and launched an Assistant General Manager program to strengthen leadership depth.
Product innovation continues with chicken shawarma performing to expectations and salmon testing showing promising results. If the salmon test continues to gain traction, Cava plans a broader rollout in late spring 2026.
The loyalty program grew 36% year-over-year, and Cava introduced tiered status levels to deepen engagement. Management also sees opportunities in catering, which is currently testing in Houston with plans to expand to a second market in 2026.
For 2026, Cava expects at least 16% unit growth with low-to-mid single-digit same-store sales growth. It plans modest pricing well below 2025 levels as it continues prioritizing accessibility over near-term margin expansion.
While Cava stock has been under pressure, the company is still gaining share in a declining traffic environment and maintaining healthy unit economics.
The question is whether younger consumers return as macro pressures ease or if the behavioral shift toward cooking at home proves more durable.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
