Jim Cramer: CAVA Group's High Prices Are a Major Turnoff

CAVA Group, Inc.'s shares have lost 40% YTD due to high prices, with CEO Brett Schulman acknowledging a "fluid" macroeconomic climate. Jim Cramer believes the company needs to lower prices or offer more affordable options to turn things around. Cramer also mentioned that CAVA and Sweetgreen are "pricing themselves out of this American market."

CAVA Group, Inc. (NYSE: CAVA) has been facing a significant challenge in the first half of 2025, with its shares losing 40% year-to-date (YTD) due to high prices and a "fluid" macroeconomic climate, as acknowledged by CEO Brett Schulman [1]. Jim Cramer has suggested that CAVA needs to lower prices or offer more affordable options to turn things around, noting that both CAVA and Sweetgreen are "pricing themselves out of this American market" [2].

Despite the current challenges, CAVA Group has been actively expanding its footprint and converting Zoe’s Kitchen locations to its Cava concept. The company has been converting 12 Zoe’s Kitchen locations to Cava in the first half of 2025 and plans to reveal "ambitious growth plans" for the second half of 2025 and beyond [1]. This strategic move aims to leverage the existing restaurant infrastructure and cost-effective real estate conversions to bring Cava to more communities, particularly suburban areas where there has been a shift in living patterns due to the pandemic [1].

The company's digital capabilities have also been a significant advantage, with Schulman noting that Cava has been well-positioned for the demands of the pandemic. Cava's extensive digital capabilities, including dedicated kitchens for digital off-premise orders and digitally enabled drive-thru windows, have enabled the company to meet multi-channel demand fluctuations effectively [1]. The company launched three new digital access points last year, contributing to a significant increase in digital revenue [1].

Analysts have also been cautiously optimistic about CAVA Group's future prospects. William Blair analysts raised their FY2026 earnings forecast for CAVA Group from $0.63 to $0.64 per share, surpassing the current consensus estimate of $0.50 per share [2]. Multiple brokerages have updated their price targets for CAVA, with a consensus rating of "Moderate Buy" and an average target price of $100.44 [2]. Despite some analysts reducing their targets, the overall sentiment remains positive, with most analysts rating the stock as a "Buy" or "Strong Buy."

However, CAVA Group faces competition from other fast-casual restaurants, such as Sweetgreen, which has also been struggling with high prices and market competition. Cramer's suggestion for CAVA to lower prices or offer more affordable options may be a viable strategy to attract price-sensitive consumers and turn around the current market challenges.

References:
[1] https://www.nrn.com/emerging-chains/cava-ceo-brett-schulman-on-leaning-in-to-zoe-s-kitchen-conversions
[2] https://www.marketbeat.com/instant-alerts/analysts-set-expectations-for-cava-group-fy2026-earnings-2025-08-15/