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Cava Cuts Full-Year Same-Store Sales Forecast After Q2 Slowdown

Shares fell 21% following a reduced sales outlook with profit targets unchanged.

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The logo for Cava Group, a Mediterranean restaurant chain, is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 22, 2023. REUTERS/Brendan McDermid/File Photo
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Overview

  • After reporting 2.1% same-store sales growth in Q2, Cava lowered its full-year sales forecast to 4%–6% from 6%–8%.
  • The guidance revision triggered a roughly 20–21% drop in after-hours trading, reversing years of post-IPO share gains.
  • Cava delivered Q2 earnings per share of $0.16 on $280.6 million in revenue, beating EPS estimates but narrowly missing sales projections and posting net income of $18.4 million.
  • Management reaffirmed its full-year adjusted EBITDA target of $152 million–$159 million and restaurant-level margin guidance of 24.8%–25.2% while raising its annual opening goal to 68–70 new units.
  • Executives pointed to traffic softness after the one-year anniversary of their grilled steak launch and committed to piloting Hyphen’s automation technology to improve throughput and order accuracy as visits recover.