Cava cuts sales outlook after soft second quarter… what this means for customers

Cava Group Inc. lowered its full-year same-store sales forecast on Tuesday after posting weaker-than-expected results for the second quarter, sending its stock tumbling more than 20% in after-hours trading. The decline adds to what has already been a difficult year for the Mediterranean fast-casual chain, with shares now down roughly 40% in 2025.

The company now expects same-store sales to rise between 4% and 6% for the year, down from its previous range of 6% to 8%.

Earnings Miss Expectations
For the quarter, Cava reported net income of $18.4 million, or 16 cents per share, compared with $19.7 million, or 17 cents per share, in the same period a year earlier. Analysts surveyed by LSEG were looking for 13 cents per share.

Revenue came in at $280.6 million, falling short of the $285.6 million Wall Street forecast. Net restaurant sales jumped 20% to $278.2 million, largely fueled by new store openings.

Same-store sales — which measure growth at locations open for at least 12 months — increased 2.1% in the quarter. While Cava avoided the broader industry’s trend of declining comparable sales, the result still fell well short of the 6.1% growth analysts expected.

Traffic Flat After Steak Launch Anniversary
CFO Tricia Tolivar told CNBC the quarter began with solid sales momentum, prompting Cava to stick with its original forecast earlier in the year. However, once the chain marked the one-year anniversary of its popular grilled steak menu item — a key driver of last year’s 14.4% same-store sales surge — traffic gains tapered off.

“Quarterly traffic was roughly flat,” the company noted. This contrasts sharply with last year’s nearly double-digit traffic growth during the same period.

Industry-Wide Challenges
Cava’s struggles mirror a broader slowdown hitting fast-casual dining. Chipotle reported a 4% drop in same-store sales for the quarter, and salad chain Sweetgreen has cut its full-year outlook for the second quarter in a row, triggering a selloff in its stock.

Outlook and Investments
Despite trimming its sales forecast, Cava reaffirmed other key guidance for 2025, including adjusted EBITDA of $152 million to $159 million and restaurant-level profit margins of 24.8% to 25.2%.

The company also revealed it had joined a $25 million Series B funding round for Hyphen, a food automation startup specializing in robotic plate and bowl assembly. Chipotle, already an investor, led the round.

“By piloting Hyphen’s automated digital makeline, we have the opportunity to increase order accuracy and speed during peak digital hours, while reducing complexity for our team members,” CEO Brett Schulman said.

What This Means for Customers

For regular diners, the impact of Cava’s slowdown is likely to be subtle in the short term but could influence the chain’s menu strategy and service model going forward. With traffic growth flattening, customers might see more frequent promotions, loyalty program incentives, and limited-time menu offerings aimed at driving visits.

The investment in Hyphen’s automation could mean faster order turnaround and fewer mistakes during peak hours, especially for online and app-based orders. However, cost pressures from slower growth could also limit how aggressively Cava expands or upgrades restaurant interiors. In essence, the company will be looking to boost perceived value and convenience to keep diners coming back in a more competitive fast-casual environment.