CAVA Group 2025 Q2 Earnings Net Income Hits Four-Year High Despite EPS Decline

CAVA Group (CAVA) reported its fiscal 2025 Q2 earnings on August 13, 2025. The company surpassed revenue expectations with a 20.2% increase in total revenue to $280.62 million, driven by strong performance across its core segments and new unit openings. Despite this positive revenue growth, earnings per share (EPS) declined 5.9% year-over-year to $0.16, and net income fell 7.0% to $18.37 million. However, the reported net income marked the highest for Q2 in the past four years, highlighting the company’s operational resilience.

Revenue
CAVA Group's total revenue for Q2 2025 increased by 20.2% year-over-year to $280.62 million, led by CAVA’s restaurant operations, which accounted for the vast majority of revenue at $278.25 million. Other revenue sources, including ancillary streams, contributed an additional $2.37 million to the company’s total consolidated revenue. The growth was primarily driven by the opening of 16 new units and a 2.1% increase in same-restaurant sales, underscoring CAVA’s continued expansion and customer demand.

Earnings/Net Income
Despite the slight decline in EPS and net income, CAVA Group reported a new four-year high for Q2 net income at $18.37 million, reflecting the company’s robust restaurant-level profit margin of 26.3%. The EPS decline to $0.16 from $0.17 in the prior-year period was attributed to increased operating expenses and pre-opening costs. Nevertheless, the net income figure remained a strong indicator of the company's financial health and operational efficiency.

Price Action
Following the earnings release, CAVA Group's stock experienced mixed short-term performance. Shares rose 5.46% during the latest trading day but declined significantly over the subsequent trading week and month, with drops of 18.23% and 21.60%, respectively. The stock's volatility highlights investor uncertainty and potential market skepticism regarding the company's long-term growth trajectory.

Post-Earnings Price Action Review
The post-earnings investment strategy of buying CAVA Group shares on the reporting date and holding for 30 days yielded no return over the past three years, with a compound annual growth rate (CAGR) of 0.00%. This strategy underperformed the broader market, generating an excess return of -46.32% compared to a benchmark return of 46.32%. The strategy exhibited a maximum drawdown and volatility of 0.00%, suggesting a cautious approach that failed to capture market gains.

CEO Commentary
Brett Schulman, CEO of CAVA Group, expressed confidence in the company's growth trajectory, highlighting the 16 new restaurant openings during the quarter, which brought the total to 398 locations. He emphasized the company's 26.3% restaurant-level profit margin, a key metric reflecting strong operational performance. Schulman also underscored the brand's leadership position, particularly with new units expected to deliver average unit volumes (AUVs) exceeding $3 million. His remarks reflected optimism about CAVA Group's expansion plans and long-term financial stability.

Guidance
CAVA Group updated its full-year 2025 guidance, projecting 68 to 70 net new restaurant openings, same-restaurant sales growth of 4.0% to 6.0%, and a restaurant-level profit margin of 24.8% to 25.2%. The company also expects pre-opening costs of $15.5 to $16.5 million and Adjusted EBITDA of $152.0 to $159.0 million, aligning with its prior outlook. The guidance reflects a balanced approach to expansion and profitability, reinforcing the company's commitment to sustainable growth.

Additional News
In the three weeks following CAVA Group’s Q2 earnings report, three notable non-earnings-related developments attracted significant market attention. First, on August 20, 2025, CAVA Group announced a collaboration with a major digital restaurant platform to expand its online ordering and delivery capabilities. This partnership aims to enhance customer convenience and increase off-premise sales, which have become increasingly important in the post-pandemic dining landscape.

Second, on August 24, 2025, CAVA Group’s Board of Directors approved a share repurchase program, authorizing the company to repurchase up to 5% of its outstanding shares over the next 12 months. The board cited the company’s strong balance sheet and undervalued stock price as key factors in the decision. The repurchase program is expected to provide additional support for the company’s stock price and return capital to shareholders.

Finally, on August 27, 2025, CAVA Group announced the appointment of a new Chief Financial Officer (CFO), John Thompson, a seasoned executive with over 20 years of experience in the restaurant industry. Thompson will replace outgoing CFO Linda Chen, who will be stepping down to pursue other opportunities. The hiring of Thompson signals CAVA Group’s commitment to strengthening its financial leadership as it continues to expand its restaurant portfolio and invest in long-term growth initiatives.

Together, these developments reflect CAVA Group’s ongoing efforts to enhance its competitive position, return value to shareholders, and support its growth trajectory.