Cava Group Inc. (NYSE:CAVA) shares tumbled on Wednesday as investors reacted to a quarterly revenue miss, lowered full-year sales forecast, and news of a fresh investment in food automation technology.
The Mediterranean fast-casual chain posted second-quarter revenue of $278.25 million, below the $286.58 million consensus estimate. Adjusted earnings of 16 cents per share beat forecasts of 14 cents. Total revenue rose 20.3% from a year ago, driven by menu pricing and product mix, while guest traffic remained flat.
The company opened 16 new restaurants in the quarter, bringing its total to 398, up 16.7% year-over-year. CEO Brett Schulman said Cava recently celebrated its 400th opening and remains on track toward a goal of 1,000 locations by 2032.
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For 2025, Cava cut its same-restaurant sales growth outlook to 4%–6% from 6%–8% while raising its forecast for new restaurant openings to 68–70 from 64–68. Full-year adjusted EBITDA guidance remained unchanged at $152 million to $159 million.
During the earnings call, CFO Tricia Tolivar described the macroeconomic backdrop as “fluid” and “creating a fog for consumers,” though she noted no significant changes in premium purchase patterns or other key buying behaviors. Schulman added that spending habits remain stable across demographics and regions, with “no trade down, no check management,” but said the company is closely monitoring the situation.
In a separate announcement, Cava said it participated in Hyphen’s $25 million Series B funding round to accelerate production and deployment of the food automation company’s AI-powered makeline.
Hyphen, the company behind Chipotle's automated make line prototype, develops AI-powered food automation systems.
Schulman said the pilot program offers “the opportunity to increase order accuracy and speed during peak digital hours, while reducing complexity for our team members.”
He added that the investment is “a meaningful step in our commitment to operational excellence and innovation that supports both our growth and our people.”
The sharp sell-off stood in contrast to Brinker International Inc. (NYSE:EAT), owner of Chili’s, which on Wednesday reported stronger-than-expected earnings and revenue growth.
Brinker posted a 21% year-over-year sales increase in its fourth quarter, driven by higher traffic and menu innovation, and raised its fiscal 2026 outlook above analyst expectations. Brinker shares rose more than 9% in premarket trading.
Price Action: At last check Wednesday, CAVA shares were trading lower by 17.36% to $69.83.
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