CAVA Group (CAVA) Is Down 17.8% After Lowering 2025 Sales Growth Outlook and Reporting Q2 Results

• CAVA Group recently lowered its 2025 same-restaurant sales growth guidance to 4.0% to 6.0%, down from 6.0% to 8.0%, alongside reporting second quarter results with US$280.62 million in sales and a slight year-over-year decline in net income to US$18.37 million.
• The updated outlook coincided with ongoing expansion efforts, highlighted by CAVA’s entrance into the Pittsburgh market and a continued push toward reaching at least 1,000 restaurants by 2032.
• We’ll examine how the reduced sales outlook may shift the narrative around CAVA Group’s growth trajectory and long-term valuation.

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CAVA Group Investment Narrative Recap

To be a CAVA Group shareholder, you need to believe in the company’s ability to sustain long-term restaurant expansion, strong brand appeal, and growth in healthy, Mediterranean-inspired fast-casual dining, despite evolving consumer preferences and profitability pressures. The lowered 2025 same-restaurant sales growth guidance moderately impacts near-term expectations, but has limited effect on the most important short-term catalyst: successful restaurant expansion. The material risk remains that slower same-restaurant sales could signal broader demand issues or brand fatigue if not offset by new openings.

The recent opening of CAVA's first Pittsburgh restaurant is a relevant expansion milestone. This move reinforces the company’s growth ambitions and goal to reach at least 1,000 locations by 2032, which is central to offsetting sales volatility at existing restaurants and keeping overall revenue growth on track.

However, it is important for investors to be aware that, despite this growth, there remains a meaningful risk if the company’s core menu focus leads to ...

Read the full narrative on CAVA Group (it's free!)

CAVA Group's narrative projects $1.8 billion in revenue and $117.0 million in earnings by 2028. This requires 20.9% yearly revenue growth and a $25.0 million decrease in earnings from $142.0 million currently.

Uncover how CAVA Group's forecasts yield a $94.21 fair value, a 35% upside to its current price.

Exploring Other Perspectives

Eight individual fair value estimates from the Simply Wall St Community range widely, from US$17.63 to US$115.63 per share. While you see this broad spectrum of expectations, keep in mind that CAVA’s ability to maintain consistent same-restaurant sales growth is a pivotal performance driver that could impact perceptions moving forward.

Explore 8 other fair value estimates on CAVA Group - why the stock might be worth less than half the current price!

Build Your Own CAVA Group Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your CAVA Group research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free CAVA Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate CAVA Group's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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