Key Takeaways
- Cava Group shares surged more than 21% following a fourth-quarter earnings report that exceeded analyst expectations
- Fourth-quarter revenue reached $272.8–$275 million, marking 21.2% year-over-year growth, while EPS of $0.04 surpassed forecasts
- Comp sales rose a modest 0.5% in Q4 with guest traffic declining 1.4%, yet management projects 3–5% comparable sales growth for 2026
- Multiple firms boosted price targets: Bernstein to $84, UBS to $75, Needham and TD Cowen to $90, and Telsey to $88
- The company’s loyalty initiative now represents approximately one-third of total sales, while catering pilots continue in Houston
Cava Group entered its latest earnings announcement facing headwinds. Shares had tumbled 32% during the preceding 12-month period amid inconsistent same-store sales performance and declining foot traffic.
Then the fourth-quarter results arrived and changed the narrative.
Quarterly revenue for the period ending in December totaled $272.8–$275 million, representing a 21.2% increase versus the prior-year quarter. The figure exceeded Street consensus projections of approximately $268 million.
Adjusted earnings per share came in at $0.04, surpassing analyst estimates ranging from $0.00 to $0.03, though declining modestly from $0.05 posted in the year-ago period.
Comparable restaurant sales expanded by only 0.5% — marking the slowest growth rate since Cava completed its public offering in 2023. Customer traffic declined 1.4% on a year-over-year basis, with menu price increases offsetting the traffic shortfall to maintain positive comp growth.
Yet investors looked past the sluggish traffic metrics and focused on forward guidance. The Mediterranean fast-casual chain projected comparable sales growth between 3% and 5% for 2026, exceeding many Wall Street forecasts.
Shares responded enthusiastically, climbing more than 21% in Wednesday trading.
Wall Street Weighs In
J.P. Morgan analyst John Ivankoe suggested the Q4 performance represents a trough, reiterating an Overweight rating. He characterized Cava as possessing “an economically advantaged business model with high-potential for full national penetration.”
Bernstein elevated its price target from $75 to $84 while maintaining an Outperform rating. The investment firm highlighted expanding brand recognition, loyalty program traction, menu development, and operational enhancements as sustained growth catalysts.
UBS increased its target to $75. Both Needham and TD Cowen established $90 targets. Telsey Advisory Group upgraded its price objective to $88, referencing the company’s ambition to operate more than 1,000 restaurants by 2032.
Executives also emphasized that consumer spending patterns remained stable across various income segments, despite weather-related challenges that affected parts of the quarter.
Loyalty Program and Catering Expansion
Cava’s customer loyalty platform currently generates around one-third of system-wide sales, with initial data suggesting increased visit frequency among members. A premium tier named OASIS is under development to strengthen customer relationships as the program matures.
The catering channel represents an additional growth opportunity receiving management attention. Houston serves as the initial test market, with a second location planned for launch this year and broader deployment anticipated during fiscal 2027.
According to Bernstein’s analyst, catering constitutes “a meaningful, incremental channel that is not yet contemplated in numbers.”
Throughout the trailing 12-month period, Cava generated revenue growth of 23.9%. The restaurant operator carries a market capitalization near $7.86 billion and currently trades at a P/E multiple of 46.44, though certain analysts suggest the valuation may exceed fair value calculations.
Unit expansion remained central to the fourth-quarter narrative, with additional restaurant openings completed during the period and continued development planned ahead. Cava maintains its long-term objective of exceeding 1,000 locations by the year 2032.
