CAVA's Q2 Earnings Call: Analyst Insights and Insights from Top 5 Questions.

CAVA's Q2 earnings call highlighted missed revenue expectations, but non-GAAP earnings per share exceeded analyst forecasts. Management attributed the shortfall to a challenging comparison with last year's steak launch and the "honeymoon effect" from newly opened restaurants. Despite macroeconomic headwinds, the brand remains resilient, with new openings driving growth and same-store sales increasing modestly. Analyst questions focused on the impact of macroeconomic pressures, the honeymoon effect, and the sustainability of growth.

Title: CAVA Group Reports Mixed Q2 Earnings; Stock Down 23% Post-Announcement

CAVA Group, Inc. (CAVA) reported its second-quarter 2025 financial results, with adjusted earnings per share (EPS) of 16 cents, beating the Zacks Consensus Estimate of 13 cents. However, the company's revenue of $280.6 million fell short of the consensus estimate of $287 million, resulting in a nearly 23% decline in the stock's after-hours trading session [1].

The slowdown in comparable sales growth was attributed to a challenging comparison with last year's steak launch and the "honeymoon effect" from newly opened restaurants. The company's same-restaurant sales growth moderated to 2.1%, with traffic essentially flat. The slowdown was most pronounced in June, primarily due to the anniversary effect of last year's steak launch, which significantly boosted sales by filling a key menu gap [1].

Despite the revenue shortfall, CAVA Group's restaurant-level profit margin remained strong at 26.3%, and the company opened 16 net new restaurants during the quarter, bringing the total to 398. The company's digital revenue mix also increased to 37.3% [2].

Management acknowledged the impact of macroeconomic pressures and input cost inflation, which have made consumers more cautious with discretionary spending. However, they emphasized the company's strong brand position and promising innovation pipeline, including upcoming launches such as chicken shawarma, cinnamon sugar pita chips, and early-stage salmon testing [1].

Looking ahead, analysts remain cautious about CAVA's short-term growth visibility and the company's premium valuation. The Zacks Consensus Estimate for earnings per share for 2025 and 2026 has remained stable, with the company's earnings likely to witness a gain of 38.1% and 17% year over year, respectively [1].

CAVA's stock has underperformed other industry players like Brinker International, Inc. (EAT), McDonald's Corporation (MCD), and Yum! Brands, Inc. (YUM) in the past six months, with shares losing 35.5% compared to the industry's decline of 10.3% and the S&P 500's gain of 4.3% [1].

References
[1] https://www.nasdaq.com/articles/cava-stock-down-23-post-q2-earnings-should-you-buy-sell-or-hold
[2] https://investor.cava.com/news/news-details/2025/CAVA-Group-Reports-Second-Quarter-2025-Results/default.aspx