Mediterranean restaurant chain Cava forecasts annual sales above estimates

Mcdonalds

24/02/2026 21:11

Feb 24 (Reuters) - Cava Group  CAVA.N  forecast annual
same-store sales above Wall Street estimates on Tuesday, betting
on resilient demand for its healthy Mediterranean bowls, even as
higher commodity and tariff-related costs pressure its margins.
    The company's customizable protein and fiber-rich
Mediterranean bowls, pitas and salads priced roughly between $11
and $16 were appealing to consumers as diets change in light of
increased adoption of appetite-supressing weight-loss drugs, CEO
Brett Schulman told Reuters.
    Cava expects a 1.4% price hike on some premium and side
items, but would keep prices unchanged on its main chicken and
falafel bowls and pitas, and launch its first seafood protein
bowl at the end of the current quarter, Schulman added.
    "There's certainly a lot of anxiety around the impact of AI
on entry level jobs, which would directly affect Gen-Z, but
diving in underneath the data that consumer still spending ...
they have a heightened sensitivity to where they're spending
their dollars," Schulman said.
    Cava expects fiscal 2026 same-restaurant sales to increase
between 3% and 5%, above analysts' average estimate of a 3.16%
rise, according to data compiled by LSEG.
    Higher prices of commodities such as beef, as well as
elevated packaging costs, due to U.S. import tariffs, led to a
decline of 60 basis points in restaurant-level profit margin to
24.4% in fiscal year 2025.
    The company expects a profit margin for fiscal 2026 to be
below that level, between 23.7% and 24.2%.
    Rival Chipotle Mexican Grill  CMG.N  also flagged margin
pressure earlier this month due to higher prices of key
ingredients such as beef, as well as choppy spending.
    Cava's fourth-quarter same-store sales rose 0.5%, compared
with estimates of a fall of 0.85%.

 (Reporting by Sanskriti Shekhar and Juveria Tabassum in
Bengaluru)
 ((Juveria.Tabassum@thomsonreuters.com))