Key Takeaways
- Cava Group shares climbed more than 21% following fourth-quarter 2025 results that exceeded analyst projections
- Fourth-quarter revenue reached $272.8–$275 million, representing 21.2% year-over-year growth, while EPS of $0.04 topped forecasts
- Same-store sales increased a modest 0.5% in Q4 with customer traffic declining 1.4%, though 2026 outlook projects 3–5% comparable growth
- Bernstein upgraded its price target to $84, joining UBS, Needham, TD Cowen, and Telsey in raising their projections
- The company’s loyalty initiative now represents approximately one-third of total sales, while catering pilots continue in Houston with broader rollout ahead
The Mediterranean fast-casual chain faced significant headwinds during the twelve months preceding Tuesday’s quarterly report. Shares had declined 32% over that period, pressured by inconsistent comparable store performance and weakening customer visits.
Then the fourth-quarter results arrived.
Quarterly revenue for the period ending in December totaled $272.8–$275 million, reflecting 21.2% annual growth. The figure exceeded the Street’s consensus projection of approximately $268 million.
Adjusted earnings per share came in at $0.04, surpassing expectations of $0.00–$0.03, though representing a slight decline from $0.05 during the year-ago period.
Same-store sales posted growth of only 0.5% — marking the slowest performance since Cava completed its 2023 initial public offering. Customer traffic decreased 1.4% compared to the prior year, with pricing increases largely offsetting the negative traffic trend.
Despite the lackluster traffic metric, the market’s attention shifted to forward expectations. The company projected comparable sales expansion of 3% to 5% throughout 2026, exceeding what most analysts had anticipated.
Shares reacted enthusiastically, climbing more than 21% in Wednesday trading.
Wall Street Responds
J.P. Morgan analyst John Ivankoe suggested the Q4 performance likely represents a “bottom,” reiterating an Overweight rating. He characterized Cava as “an economically advantaged business model with high-potential for full national penetration.”
Bernstein increased its price objective to $84 from $75, maintaining an Outperform stance. The firm highlighted brand recognition expansion, loyalty member engagement, menu development, and operational enhancements as sustained growth catalysts.
UBS elevated its target to $75. Both Needham and TD Cowen advanced their targets to $90. Telsey Advisory Group pushed its projection to $88, referencing Cava’s objective to operate more than 1,000 locations by 2032.
Executives also emphasized that consumer spending patterns remained consistent across various income segments, despite some weather-induced challenges throughout the quarter.
Loyalty Platform and Catering Expansion
Cava’s rewards program currently generates approximately one-third of system-wide sales, with preliminary indicators showing enhanced visit frequency. A premium tier named OASIS is under development to strengthen member engagement as the platform expands.
Catering represents another growth avenue receiving management focus. Pilot programs continue in Houston, with a second test market scheduled to launch this year and a comprehensive rollout anticipated during fiscal 2027.
Bernstein’s analyst said catering represents “a meaningful, incremental channel that is not yet contemplated in numbers.”
During the trailing twelve-month period, Cava generated revenue growth of 23.9%. The restaurant operator carries a market capitalization of approximately $7.86 billion and trades at a P/E multiple of 46.44, though certain analysts suggest the valuation appears elevated compared to fair value calculations.
Unit expansion remained central to the Q4 discussion, with additional restaurant debuts during the quarter and continued development scheduled ahead. Cava maintains its target of exceeding 1,000 locations by 2032.
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