Cava Stock Plunges on Lowered Sales Growth Outlook

The fast-casual restaurant operator reported revenue growth of 20.3% in the second quarter. (Courtesy CAVA)

Cava Group, the Mediterranean-themed fast casual restaurant chain, missed expectations for second-quarter revenue and cut its full-year outlook for same-store sales growth, sending its stock plunging 22% in after-hours trading.

The company now sees full-year 2025 same restaurant sales growth of 4% to 6%, from previous guidance of 6% to 8%.

Shares fell to $65.60 each in late trading. They are down 25% so far this year. The late-afternoon stock drop would be the biggest decrease on record, according to Dow Jones Market Data.

Cava reported 2.1% same restaurant sales growth for the second quarter, and revenue of $278.2 million. While up 20.3% from a year ago, the revenue fell short of the expected $285.4 million, according to FactSet. Earnings of 16 cents a share beat the expected 14 cents a share.

Revenue rose “despite the fluid macroeconomic environment,” said CEO and co-founder Brett Schulman in a statement.

Cava opened 16 net new restaurants in the quarter, and it expects to open 68 to 70 for the full year, up from an earlier forecast for 64 to 68 net new restaurants.

It raised its estimated pre-opening costs for the year to $15.5 million to $16.5 million, up from $14.5 million to $15.5 million. It didn’t adjust its outlook for earnings before interest, taxes, depreciation, and amortization. It expects adjusted Ebitda of $152 million to $159 million for the full year.

Write to Liz Moyer at liz.moyer@barrons.com