Cava Group Inc. Reduces Annual Sales Forecast Amid Slowing Same-Store Sales Growth and Consumer Caution

On Tuesday, Cava Group Inc. shares dropped sharply after the Mediterranean fast-casual restaurant chain reduced its full-year sales forecast for the first time since its initial public offering (IPO). The adjustment was prompted by weaker-than-expected same-store sales growth.

For the current fiscal year, Cava now expects same-store sales to grow between 5.5% and 6.5%, down from its previous forecast of 7% to 9% growth. This revision follows the company's latest quarterly results, which showed second-quarter same-store sales increasing by 6.1%, below analysts’ expectations.

CEO Brett Schulman said on the company’s earnings call that softer traffic and spending patterns were impacting results, describing the current environment as consumers navigating through a “fog.” He noted that while the company remains confident in its growth strategy, near-term headwinds prompted the forecast revision.

The company’s total revenue for the quarter reached $196.3 million, reflecting a year-over-year increase, but was still short of Wall Street estimates. Cava also posted net income of $7.9 million for the quarter.

Following the announcement, Cava’s stock price fell as much as 12% in intraday trading. This marks the first time since going public that the company has lowered its annual same-store sales outlook.

Cava operates more than 330 locations across the U.S. and has been expanding its footprint aggressively since its IPO. The company reiterated that it plans to open between 48 and 52 new restaurants this year.

Cava Group Inc.'s stock fell sharply after the company downgraded its annual sales forecast, citing weaker than expected same-store sales growth. The Mediterranean fast-casual restaurant chain pointed to cautious consumer spending and the difficulty of sustaining high levels of growth as factors influencing the revision. The actual same-store sales growth came in below the company's projections, prompting adjustments to its revenue expectations for the year. Investors reacted negatively, sending the company's share price significantly lower following the announcement.

Cava Group Inc. shares dropped sharply after the company lowered its sales growth forecast, attributing the revision to weaker-than-expected same-store sales growth. During its latest earnings update, the company reported that same-store sales, a key indicator of performance at established locations, fell short of both internal and analyst expectations. The underwhelming results prompted management to adjust full-year growth projections downward.

The market reacted negatively to the downgrade, sending Cava’s stock price lower during trading. The company emphasized that the adjustment stemmed directly from sales trends, rather than other operational concerns. No specific recovery strategies were announced, with management focusing primarily on resetting expectations based on current performance data.

While the announcement coincided with broader market responses to various corporate earnings releases, the scale of Cava’s guidance cut stood out. The company did not disclose exact percentage figures for the shortfall or detailed remedial plans at this time.