Cava’s Steak High Wears Off… Stock Gets Skewered After Comps Come in Cold

So much for the Greek Chipotle…

Remember when Cava was being referred to by every analyst under the sun as “Chipotle’s Greek Cousin?” (Guilty as charged). The healthy, but fun lunch spot your coworker wouldn’t shut the f*** up about after discovering harissa. The IPO sweetheart that doubled in a year and made every investor thinking “I missed out on Chipotle, and buying the dip after the Salmonella scandal, this is my opportunity.”

Yeah… about that. Cava shares are getting absolutely yeeted into another century… currently down (checks notes) 15%, putting them on track for their worst day ever since going public. And possibly, the biggest Greek tragedy since that one rat snitched on where Leonidas and his 300 Spartans were hiding. The beating came after the chain posted an earnings report that made Wall Street suits about as excited as a WNBA game (don’t take it too seriously, it’s a joke… although it’s true).

And let’s just say the numbers were rougher than Great Value brand toilet paper. For starters, same-store sales were up 2.1% while the “suits” were expecting over 6%. You don’t have to be Warren Buffett to know that’s bad. Now revenue did grow 20% year-over-year to $280.6M… but still missed estimates by $5M. Net income was also $18.4M, down from $19.7M a year ago. EPS was $0.16, which technically beat the $0.13 forecast… but try telling that to a bagholder who just watched their portfolio get Cava’d.

So what’s the excuse this time? Because there always has to be an excuse. Well, you’re gonna get a tickle from this: CEO Brett Schulman blamed “a fog” over the economy. A fog. (Is that executive-speak for “people are broke”?) Back in March, blaming tariffs might have been a genius move (“just say the T word and that’ll stop the slide”). Now the market hears “tariffs” and reacts exactly like me when my friend told me he was starting a podcast (he’s unemployed).

Another massive “oh f*** me” moment for Cava was that their steak launch last year was too successful. As in, their big steak launch last year crushed so hard that it juiced sales in Q2 2024 (especially dinner orders and male customers)... and now the year-over-year comps are impossible. It’s like dropping “Old Town Road” in 2019 and then wondering why your 2020 single didn’t break Spotify.

(Source: Fast Company)

To make matters worse, full-year same-store sales growth is now expected to be 4–6%, down from the 6–8% they’d been promising. For a stock that’s been priced like it’s the second coming of Apple (in fast casual restaurant form), that’s a brutal reality check and middle finger from Mr. Market.

Even after taking this L, they’re still opening restaurants like crazy… 16 last quarter, now at 398 total, with plans to hit 1,000 by 2032. They’re also pouring money into “Project Soul,” a redesign with comfier seats, more greenery, and “warmer tones” (not sure that’s gonna roid up EPS growth, but it’s worth a shot). Oh, and they just dumped cash into a $25 million round for Hyphen (a robot bowl-making startup backed alongside Chipotle) banking automation can crank out online orders faster without firing the humans.

With all that said, even after this 15% hiccup, the stock’s still more than doubled from IPO price. But this just goes to show, you can’t run forever on IPO hype, a “healthy Chipotle” tagline, and last year’s steak sales. Eventually, the numbers gotta match the fairy tale you’ve been selling, and right now the market’s looking at them like a pissed-off parent who just found weed in their teenager’s sock drawer: “We’re not mad… we’re just really disappointed.”

At the time of publishing this article, Stocks.News holds positions in Apple and Spotify as mentioned in the article.