Cava Group restaurant sales are up, but the stock is tanking. Steak lovers might be part of the reason why

Cava Group is not having a good week. On Tuesday, August 12, the fast casual restaurant chain announced its second-quarter results and a decline in net income to $18.4 million from $19.7 million year-over-year (YOY). 

The drop brought Cava’s earnings (NYSE: CAVA) to 16 cents per share. Notably, this was above Wall Street’s predicted 13 cents per share, but other figures missed the mark, according to consensus estimates cited by CNBC. 

Take Cava’s revenue, which increased to $280.6 million from $233.5 million YOY. Despite the growth on paper, it fell short of the $285.6 million figure predicted. Then there’s the company’s same restaurant sales, which grew 2.1%, compared to a projected 6.1%. 

This low single-digit increase represented a significant decline from 2024’s fourth-quarter jump of 21.2% and even quarter one’s 10.8%. 

Protein sets a high bar

Cava attributes the 2.1% to “menu price and product mix,” while foot traffic was stagnant. Meanwhile, in a post-earnings report call, Cava CEO Brett Schulman attributed the slow growth YOY in part to 2024’s successful “launch of steak, our most significant protein launch in a number of years.” 

Investors don’t seem to accept last year’s steak addition as a good enough excuse. But crucially, Cava also cut its sales outlook for the full year.  

Cava’s stock plummeted over 24% after-hours and into premarket trading on Wednesday morning. It’s a significant turnaround from last November, when Cava led most of its competitors with an impressive 255% stock growth year-to-date for 2024. 

Schulman also acknowledged an uncertain macroeconomic climate, which he described as a “fog,” noted Restaurant Business.

Still, the CEO had a full-speed-ahead attitude when discussing the second-quarter results. 

He noted that Cava opened 16 new restaurants—with a total of 398—and that “long lines and warm welcomes” in new markets gave him confidence that Cava will have 1,000 restaurants by 2032. He also highlighted the successful testing of chicken shawarma in Dallas and Tampa. 

Schulman further shared that Cava’s Project Soul prototype should be done this fall. The fast casual chain announced Project Soul in 2024, an initiative focused on warmer color palettes, comfier seating, greenery, and an overall more welcoming environment in its restaurants. 

It’s expected to launch across new restaurants starting in 2026. Cava will have to wait until then to see if the redesign parlays into another boost in same restaurant sales.