Cava (NYSE:CAVA) has reported its second quarter earnings, with investors reacting negatively to a miss on same-store sales growth and revenue for the period.
The Mediterranean fast-casual restaurant chain posted same-store sales growth of 2.1%, far below estimates of 6.3%.
Revenue of $280.6 million was also short of estimates of $285.6 million.
Earnings per share of $0.16, however, topped Street estimates of $0.13.
“Despite the fluid macroeconomic environment, we grew Cava revenue 20.3%, and our 2025 new restaurant class is on track to deliver Average Unit Volumes (AUVs) above $3 million,” Cava CEO Brett Schulman said in a statement.
“We recently opened our 400th restaurant, marking a meaningful milestone on our path to 1,000 restaurants by 2032, reinforcing the proven portability and underlying strength fueling our continued growth.”
Jefferies analyst reiterated their ‘Buy’ rating and $100 price target following Cava’s Q2 report, noting that some noise in tough comparisons overshadowed other healthy underlying demand during the quarter.
“We think investor skepticism remains overblown with optics around same-store sales deceleration overshadowing broader strength of the model and growth algorithm that remains well above peers,” they wrote.
They see mid-single-digit same-store growth for 2025 as a realistic, if not conservative, bar. “Multiple tangible drivers over the near to medium term could support upside relative to the low-to-mid-single-digit algorithm,” they wrote.
Shares of Cava fell 15% following the release of its earnings to trade hands at $72 on Wednesday morning.