Latest news with #CAVAGroup
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2 days ago
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CAVA Stock Down 23% Post Q2 Earnings: Should You Buy, Sell or Hold?
CAVA Group, Inc. CAVA reported second-quarter 2025 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. Following the results, the company's shares declined nearly 23% in the after-hours trading session yesterday. The decline can be primarily attributed to a notable slowdown in comparable sales the second quarter, the company reported adjusted earnings per share of 16 cents, beating the Zacks Consensus Estimate of 13 cents. In the prior-year quarter, the company reported earnings per share of 17 cents. The company's revenues were $280.6 million, missing the consensus estimate of $287 million. The metric increased 20.2% year over year. CAVA Stock Down 36% in Six Months Shares of the company have lost 35.5% in the past six months compared with the industry's decline of 10.3%. In the same time frame, the S&P 500 gained 4.3%. The stock has underperformed other industry players like Brinker International, Inc. EAT, McDonald's Corporation MCD and Yum! Brands, Inc. YUM in the same time frame. Image Source: Zacks Investment Research Factors Hurting CAVA Despite its strong fundamentals, CAVA's same-restaurant sales growth moderated in second-quarter 2025, rising just 2.1% with traffic essentially flat. The slowdown was most pronounced in June, primarily due to lapping last year's steak launch, which significantly boosted sales by filling a key menu gap. This anniversary effect created a tough comparison for the quarter. Another factor weighing on comps was the 'honeymoon effect' from the 2024 new restaurant class. These units opened at unusually high volumes, making year-two comps appear negative or flat despite their strong absolute performance. This dynamic could continue to mask underlying growth in reported results over the next two like its peers, faces macroeconomic pressures that have made consumers more cautious with discretionary spending. While the company has not observed any trade-down behavior or deterioration in value perception, broader industry softness could limit upside in traffic gains. Input cost pressures also remain a consideration, with food, beverage and packaging costs rising slightly year over year due to steak's higher ingredient costs. In addition, modest tariff impacts are expected in the second half of the year as some products are sourced from affected countries, though management has already factored these into while CAVA has achieved national scale with more than $1 billion in trailing 12-month revenues, it has yet to fully leverage marketing spend as a growth lever. Management is testing media mix models and has identified marketing as a tool it can 'lean into' if macro headwinds persist. Until broader campaigns are deployed, however, awareness growth in new and competitive markets may be more dependent on organic word-of-mouth and new store openings than on targeted promotional activity. What Might Bring the Stock Back on Track? The company continues to dominate the Mediterranean fast-casual category, which benefits from strong long-term consumer trends favoring flavorful, healthy and authentic food. With no scaled direct competitor, CAVA enjoys a defensible competitive position and growing market share. Its disciplined innovation pipeline remains a growth engine, with upcoming launches such as chicken shawarma, cinnamon sugar pita chips and early-stage salmon testing expected to maintain customer excitement. Past product launches, like steak in 2024, have demonstrated the company's ability to meaningfully lift traffic and check efficiency is another area of strength. CAVA is rolling out kitchen display systems and TurboChef ovens to improve order accuracy, speed and consistency, while testing AI camera vision technology to reduce waste and ensure freshness. An investment in Hyphen automated make lines aims to enhance digital order throughput without sacrificing the human connection in-store. These initiatives improve scalability and restaurant-level execution, which, combined with a debt-free balance sheet and $385.8 million in cash and investments, give CAVA the financial flexibility to continue expanding aggressively. Customer engagement is also strengthening through creative loyalty campaigns and the upcoming introduction of a tiered rewards program designed to deepen guest relationships and drive repeat visits. CAVA's Estimate Trend The Zacks Consensus Estimate for earnings per share for 2025 and 2026 has remained stable. The company's earnings in 2025 and 2026 are likely to witness a gain of 38.1% and 17% year over year, respectively. Image Source: Zacks Investment Research Then again, Brinker, McDonald's and Yum! Brands' earnings for the current year are likely to witness year-over-year growth of 115.6%, 5.2% and 9.3%, respectively. CAVA's Valuation Looks Expensive The company is currently valued at a premium compared with its industry on a forward 12-month P/S basis. Its forward 12-month price-to-sales ratio is 7.23, significantly higher than the industry's 3.77. P/S (F12M) Image Source: Zacks Investment Research Conversely, other industry players like Brinker, McDonald's and Yum! Brands are trading at 1.22X, 7.82X and 4.7X, respectively. Final Thought on CAVA Stock CAVA's latest results highlight a solid long-term growth story, but near-term challenges make the stock less attractive at current levels. The slowdown in comparable sales momentum, caused by tough menu comparisons and the honeymoon effect from prior openings, raises questions about short-term growth visibility. Macroeconomic pressures and modest input cost inflation add another layer of uncertainty, while the company's premium valuation leaves little room for error. Despite a strong brand position and promising innovation pipeline, the combination of operational headwinds and elevated market expectations suggests that investors may benefit from waiting for a clearer inflection point in sales trends before committing fresh capital. CAVA currently has a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report McDonald's Corporation (MCD) : Free Stock Analysis Report Yum! Brands, Inc. (YUM) : Free Stock Analysis Report Brinker International, Inc. (EAT) : Free Stock Analysis Report CAVA Group, Inc. (CAVA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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2 days ago
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Top Stock Movers Now: Lennar, Gildan Activewear, CAVA Group, and More
Key Takeaways U.S. equities edged higher at midday, with the S&P 500 and Nasdaq adding to their record closes, on optimism the Federal Reserve will lower interest rates next month. The hope of falling borrowing costs lifted shares of Lennar and rival home builders. CAVA Group's same-store sales came in well below expectations, sending shares of the Mediterranean-themed restaurant lower.U.S. equities edged higher at midday on continuing optimism the latest consumer inflation data will open the door to the Federal Reserve to cut interest rates next month. The S&P 500 and Nasdaq added to their record closes yesterday, and the Dow Jones Industrial Average was higher as well. Speculation that the Fed may make a large reduction in borrowing costs sent the 10-year Treasury yield lower and lifted shares of home builders Lennar (LEN), D.H. Horton (DHI), and PulteGroup (PHM). Shares of Gildan Activewear (GIL) jumped when the T-shirt manufacturer agreed to purchase undergarment maker Hanesbrands (HBI) for $2.2 billion, less than what was reported earlier. Hanesbrands shares gained as well. V2X (VVX) shares advanced on an upgrade from Bank of America, which said it was optimistic about the defense contractor's growth. CAVA Group (CAVA) shares tumbled when the Mediterranean-themed restaurant chain reported weaker-than-anticipated same-restaurant sales and reduced its guidance as consumers pulled back spending at its locations. Shares of CoreWeave (CRWV) tumbled after the provider of artificial intelligence computing posted a much larger-than-expected loss as expenses soared, and it warned it would continue to face higher costs to keep up with demand for its products. Circle Internet Group (CRCL) shares slid when the distributor of the USDC stablecoin announced a sale of 10 million Class A shares that includes 2 million from the company and 8 million from investors. Oil futures declined. Gold prices rose. The U.S. dollar lost ground to the euro, pound, and yen. Major cryptocurrencies were mixed. Read the original article on Investopedia Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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2 days ago
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Foodservice platform Hyphen gains $25m with CAVA participation
Foodservice automation platform company Hyphen has closed a Series B funding round, raising $25m with participation from the CAVA Group to expedite Automated Makeline. The investment is set to accelerate the platform from factories to restaurants, enhancing production and deployment throughout the US. The Automated Makeline platform reduces waiting times and assists staff members so they can focus more on customer service. As part of its expansion strategy, Hyphen is collaborating with US-based Re:Build Manufacturing. Hyphen has chosen Ricoh USA as its field service partner to support the nationwide installation. This partnership leverages the network of more than 15,000 certified technicians, ensuring reliable field service support across the country. For the first time, CAVA has invested alongside current investors to bolster Hyphen's production increase in collaboration with Re:Build Manufacturing and to promote the expansion of its field service across the country. Hyphen CEO and co‑founder Stephen Klein stated: "This new funding is a testament to the impact Hyphen's team and technology are having on restaurant operations. "We are galvanised by this investment to scale our manufacturing, support our growing customer base and continue innovating as we build the future of foodservice." In 2023, Chipotle Mexican Grill joined forces with Hyphen to test the automated digital makeline for the preparation of bowls and salads. In a separate announcement, CAVA Group has reported a revenue increase of 20.3% to $278.2m for the fiscal second quarter (Q2) ended 13 July 2025, compared to $231.4m in the same quarter of the previous year. This growth is attributed to the opening of 75 new CAVA restaurants that have surpassed performance expectations, and a 2.1% rise in same-restaurant sales, driven mainly by menu pricing and product mix. A slight dip in restaurant-level profit margin was observed from 26.5% to 26.3%, due to input costs and wage investments. CAVA Group posted a net income of $18.4m, or 6.5% of revenue, in comparison to the $19.7m registered in Q2 fiscal 2024. "Foodservice platform Hyphen gains $25m with CAVA participation" was originally created and published by Verdict Food Service, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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2 days ago
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CAVA Group Stock Tumbles as Chain's Same-Restaurant Sales Come Up Short
Key Takeaways CAVA Group's same-restaurant sales came in well short of estimates as diners pulled back on spending. The Mediterranean-themed fast-casual chain also missed revenue forecasts and slashed its same-restaurant sales growth outlook. CAVA Group blamed the shortfall on a fluid macroeconomic environment causing a "fog" for of CAVA Group (CAVA) sank nearly 25% in premarket trading Wednesday, a day after the fast-casual restaurant chain posted weaker-than-expected results and cut its outlook on slowing sales. The operator of its namesake Mediterranean-themed eateries reported second-quarter same-restaurant sales increased 2.1% year-over-year, while analysts surveyed by Visible Alpha were looking for a gain of 6.25%. Revenue rose 20% to $280.6 million, also short of forecasts. Adjusted earnings per share of $0.16 was above estimates. CFO Tricia Tolivar told analysts during the earnings call that the industry was facing "a fluid macroeconomic environment and it's one that sort of creates a fog for consumers where things are changing constantly and it's hard to see the clear. And during those times, they tend to step off of the gas," according to an AlphaSense transcript. Tolivar added that while CAVA entered the quarter with momentum, "as we moved through June, we saw a deceleration in same-restaurant sales, driven in part by the timing of our steak launch last year." The company now sees full-year same-restaurant sales growth to be 4.0% to 6.0%, versus its earlier outlook of 6.0% to 8.0%. Even before today's trading, CAVA Group shares had lost about a quarter of their value in 2025. Read the original article on Investopedia Sign in to access your portfolio
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2 days ago
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Restaurant Stocks Slip After CAVA's Sales Growth Falls Short of Forecasts
Aug 13 - Shares of CAVA Group (NYSE:CAVA) fell 24% in early trading on Wednesday after the company took a hit after its latest earnings update fell short of Wall Street's expectations for same-restaurant sales growth. The Mediterranean fast-casual chain posted Q2 revenue of $278.2 million, up 20.3% from last year. That jump came from opening 16 new restaurants and modest same-restaurant sales growth of 2.1%. Warning! GuruFocus has detected 5 Warning Sign with CAVA. Here's the problem: analysts were looking for a 6.1% increase in same-restaurant sales, so CAVA's numbers landed well below the mark. Investors reacted quickly, pushing shares lower in afternoon trading. CAVA wasn't alone in the slump. Several restaurant peers also saw their stocks dip on the day, including Chipotle Mexican Grill (NYSE:CMG), Noodles & Company (NASDAQ:NDLS), and Portillo's (NASDAQ:PTLO). While those companies weren't reporting earnings, the disappointment from CAVA's report seemed to spill over into the broader restaurant sector. The results highlight the pressure restaurant operators are feeling as consumer spending shifts and competition intensifies. For CAVA, the focus now is on driving stronger traffic growth to match its rapid store expansion. Investors will be watching closely to see if the chain can close that gap in the coming quarters. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
