Cava, the fast-casual Mediterranean restaurant chain, reported record-breaking income for fiscal yr 2025 on Tuesday and forecast gross sales progress for fiscal yr 2026.
Shares closed greater than 25% greater on Wednesday.
“Whereas there are a variety of elements round us which might be creating pressures from a margin perspective, our mannequin has allowed us to be very considerate and decrease value will increase to our visitors and to customers basically, which actually helps elevate our price notion,” Chief Monetary Officer Tricia Tolivar advised CNBC.
Although the corporate stated final quarter that it noticed a pullback amongst youthful customers, Tolivar stated that pattern got here to an finish within the last three months of its fiscal yr.
“We really noticed firming in that class, and total [we’re] seeing enchancment in our tendencies throughout earnings cohorts, age cohorts, completely different elements of the nation,” Tolivar stated. “And actually, we consider there’s slightly little bit of a bridge that we have been capable of create on this Ok-shaped economic system, the place we wish to be accessible for everybody, and we’re doing our greatest to make sure that our superb culinary and unbelievable hospitality is there for all clients throughout the nation.”
She added that a few of Cava’s best-performing eating places are in markets the place median family incomes are decrease.
The restaurant chain reported same-store gross sales up 0.5% in its fiscal fourth quarter, in comparison with Wall Road estimates of a 1.1% decline, in line with StreetAccount. A lot of that progress was due to menu costs and product combine, and partially offset by a 1.4% decline in foot visitors, the corporate stated.
Tolivar stated Cava raised costs about 1.7% originally of 2025 and that 2026 would see “very modest will increase.”
The corporate additionally recorded 72 internet new restaurant openings in fiscal 2025 for a complete of 439 areas.
Here is how Cava carried out within the interval ended Dec. 28 in contrast with what Wall Road was anticipating, primarily based on a survey of analysts by LSEG:
- Earnings per share: 4 cents vs. 3 cents anticipated
- Income: $275 million vs. $268 million anticipated
Within the fourth quarter, Cava reported internet earnings of $4.9 million, or 4 cents per share, in comparison with $78.6 million, or 66 cents per share, within the fourth quarter of 2024.
Income of $275 million marked a rise of almost 21% yr over yr.
For the total fiscal yr, the corporate reported record-breaking income surpassing $1 billion, a progress of greater than 20% in comparison with the yr prior. Similar-restaurant gross sales for the yr elevated by 4%.
“We consider our momentum displays extra than simply growth,” CEO Brett Schulman stated on a name with analysts. “It alerts that our price proposition is resonating with right this moment’s more and more discerning client, and as visitors develop into extra intentional with their spend, they’re selecting manufacturers like Cava that ship actual differentiation by way of daring flavors, wholesome meals and hospitality that creates significant human connection.”
For fiscal yr 2026, Cava stated it expects 74 to 76 internet new restaurant openings, along with same-store gross sales progress of three% to five%.
Tolivar stated the corporate is anticipating sturdy outcomes from its upcoming menu additions, together with a salmon providing, which can mark Cava’s entry into seafood.