Cava Lowers Same-Store Sales Forecast After Slower Q2 Performance

Cava lowers same-store sales forecast after slow Q2 but keeps profit margins and invests in automation tech.

13 August 2025, 13:46 published Updated 13 August 2025, 13:46

Full-Year Same-Store Sales Growth Revised Downward

Cava has adjusted its full-year outlook for same-store sales growth following a weaker-than-expected second quarter. The company now expects same-store sales to grow between 4% and 6% for the year, down from the earlier forecast range of 6% to 8%.

This revision comes after Cava’s shares dropped more than 20% in extended trading, extending the stock’s decline to around 40% year-to-date.

Q2 Results: Earnings Beat, Revenue Slightly Below Expectations

In the second quarter, Cava reported earnings per share (EPS) of 16 cents, beating analyst estimates of 13 cents. However, revenue came in at $280.6 million, just shy of the $285.6 million expected.

Net income for the quarter was $18.4 million, or 16 cents per share, down from $19.7 million, or 17 cents per share, a year earlier.

Sales Growth Driven by New Store Openings, Same-Store Sales Lag Behind

Cava’s net restaurant sales increased 20% to $278.2 million, primarily fueled by new restaurant openings. However, the company’s same-store sales — which track sales at locations open for at least a year — grew just 2.1% during the quarter.

While Cava avoided the industry-wide trend of same-store sales declines, this growth fell short of Wall Street’s projection of 6.1%, according to StreetAccount estimates.

Flat Customer Traffic and Slowing Growth After Menu Launch

Cava described its quarterly customer traffic as “roughly flat.” This contrasts with a year earlier when same-store sales rose 14.4%, supported by nearly double-digit traffic growth.

CEO and co-founder Brett Schulman previously attributed strong traffic to the launch of the grilled steak menu item. However, CFO Tricia Tolivar told CNBC that after celebrating the one-year anniversary of the grilled steak introduction, sales growth slowed down in the second quarter.

Industry Challenges: Similar Struggles Among Competitors

Cava’s performance mirrors difficulties faced by other fast-casual chains this quarter. Chipotle Mexican Grill reported a 4% decline in same-store sales, while Sweetgreen’s shares tumbled after the company lowered its forecast for the second consecutive quarter.

Key Financial Guidance Unchanged Despite Sales Forecast Cut

Despite revising same-store sales guidance downward, Cava reaffirmed other key financial targets for 2025. The company expects adjusted EBITDA to range between $152 million and $159 million.

Cava also maintained its outlook for restaurant-level profit margins, projecting them between 24.8% and 25.2%.

Investment in Automation: Cava Joins $25M Funding Round for Hyphen

In a strategic move, Cava participated in a $25 million Series B funding round for Hyphen, a company specializing in automating plate and bowl portioning. Chipotle led the round and has previously invested in Hyphen.

CEO Schulman highlighted the benefits of automation: “By piloting Hyphen’s automated digital makeline, we aim to improve order accuracy and speed during peak digital hours while reducing operational complexity for our team.”