Mediterranean fast-casual restaurant chain CAVA (NYSE: CAVA) met Wall Streets revenue expectations in Q3 CY2025, with sales up 19.9% year on year to $292.2 million. Its non-GAAP profit of $0.12 per share was in line with analysts’ consensus estimates.
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CAVA (CAVA) Q3 CY2025 Highlights:
- Revenue: $292.2 million vs analyst estimates of $292 million (19.9% year-on-year growth, in line)
- Adjusted EPS: $0.12 vs analyst estimates of $0.13 (in line)
- Adjusted EBITDA: $40.04 million vs analyst estimates of $40.54 million (13.7% margin, 1.2% miss)
- Lowered full-year guidance same-store sales growth
- EBITDA guidance for the full year is $150 million at the midpoint, below analyst estimates of $156.1 million
- Operating Margin: 5.9%, in line with the same quarter last year
- Locations: 415 at quarter end, up from 363 in the same quarter last year
- Same-Store Sales rose 1.9% year on year (18.1% in the same quarter last year)
- Market Capitalization: $6.1 billion
Company Overview
Starting from a single Washington, D.C. location, CAVA (NYSE: CAVA) operates a fast-casual restaurant chain offering customizable Mediterranean-inspired dishes.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years.
With $1.13 billion in revenue over the past 12 months, CAVA is a mid-sized restaurant chain, which sometimes brings disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale. On the bright side, it can still flex high growth rates because it’s working from a smaller revenue base.
As you can see below, CAVA grew its sales at an incredible 24% compounded annual growth rate over the last four years (we compare to 2019 to normalize for COVID-19 impacts) as it opened new restaurants and increased sales at existing, established dining locations.
This quarter, CAVA’s year-on-year revenue growth was 19.9%, and its $292.2 million of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 21.7% over the next 12 months, a slight deceleration versus the last four years. Despite the slowdown, this projection is commendable and suggests the market is forecasting success for its menu offerings.
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Restaurant Performance
Number of Restaurants
A restaurant chain’s total number of dining locations influences how much it can sell and how quickly revenue can grow.
CAVA operated 415 locations in the latest quarter. It has opened new restaurants at a rapid clip over the last two years, averaging 18% annual growth, much faster than the broader restaurant sector. This gives it a chance to become a large, scaled business over time.
When a chain opens new restaurants, it usually means it’s investing for growth because there’s healthy demand for its meals and there are markets where its concepts have few or no locations.
Same-Store Sales
The change in a company's restaurant base only tells one side of the story. The other is the performance of its existing locations, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales gives us insight into this topic because it measures organic growth at restaurants open for at least a year.
CAVA has been one of the most successful restaurant chains over the last two years thanks to skyrocketing demand within its existing dining locations. On average, the company has posted exceptional year-on-year same-store sales growth of 10.3%. This performance along with its meaningful buildout of new restaurants suggest it’s playing some aggressive offense.
In the latest quarter, CAVA’s same-store sales rose 1.9% year on year. This was a meaningful deceleration from its historical levels. We’ll be watching closely to see if CAVA can reaccelerate growth.
Key Takeaways from CAVA’s Q3 Results
We struggled to find many positives in these results. CAVA's same-store sales fell slightly short of Wall Street’s estimates. Its full-year same-store sales growth was lowered, reflecting dampened topline expectations. The company's full-year EBITDA guidance also missed. Overall, this was a softer quarter. The stock traded down 4.2% to $49.50 immediately following the results.
CAVA didn’t show it’s best hand this quarter, but does that create an opportunity to buy the stock right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
