The second quarter was a speed bump, even for Cava.
The fast-casual Mediterranean chain’s path of strong same-store sales growth since going public in 2023 slowed in the July 13-ended quarter, sending its stock price down more than 20% in after-hours trading to $66.20 per share, lower than it has been for the past 12 months.
Comparable store sales grew 2.1%, which was Cava’s lowest increase since its June 2023 initial public offering. Traffic was flat for the quarter.
It marked a tough comparison. A year ago, Cava reported same-store sales up 14.4%, including traffic increasing 9.5%, reflecting a huge boost from the introduction of steak as a protein on the menu.
CEO Brett Schulman also said Cava in 2024 was enjoying something of a honeymoon effect from the IPO, with restaurants that year opening at record levels, which impacted the 12-month comparable restaurant base.
It’s a good problem to have, and Schulman noted that the 2025 class of new restaurants are also outperforming expectations, with average unit volumes exceeding $3 million. Cava’s AUV in the second quarter was $2.9 million, up from $2.7 million a year ago.
But the sales slowdown also reflected consumer headwinds, noted by most public restaurant chains in the second quarter.
Schulman described the “fluid macroeconomic climate” as a “fog” that consumers are trying to find their way through.
“Sometimes that fog gets denser, and sometimes it gets lighter,” he said in an interview. “And now we’ve got tariff whiplash again. And I think that has the consumer less firm-footed, less ebullient than they were last year, and looking for that clarity so they can be confident in the decisions they make, or what the landscape is going to be going forward.”
Despite the uncertainty, Schulman noted that consumers at Cava were not trading down on the menu.
“We are not seeing any check management or deterioration in premium items and attachments,” he said. “So consumers are continuing to find a great everyday value when they do go out to eat at a Cava.”
He added that sales and traffic were re-accelerating toward the end of the quarter in July, as the chain moved past the introductory period for steak last year.
And there is new menu news coming to further drive traffic in the second half.
Rolling out systemwide in September as a limited-time offer is Chicken Shawarma, which will be made with marinated spit-roasted breast meat, which he described as a healthful option for protein seekers. The dish has been tested in Dallas and Tampa since April.
And Schulman said Cava is testing the addition of salmon as a protein at restaurants in Atlanta and Tampa, which would add to the protein options on the menu.
For dessert, Cava this fall is planning to introduce a cinnamon-sugar-dusted version of its pita chips, spiked with a hint of cardamom, with a side of honey for dipping.
Still, Cava downgraded its expectations for the year, saying same-store sales are expected to increase between 4% to 6%, down from earlier projections of between 6% and 8%.
But Cava also said the chain expects to add more restaurants this year, projecting growth of 68 to 70 new units, up from earlier estimates of between 64 to 68.
Cava added a net of 16 new units during the second quarter, ending with 398 restaurants. Schulman said the chain is on track to reach 1,000 units by 2032.
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