Cava Q3 2025 Earnings Review
Photo by Anna Pelzer / Unsplash

Cava Q3 2025 Earnings Review

10 min read

Table of Contents

In case you missed it:

a. Cava 101

Cava is a quick-service restaurant chain that sells Mediterranean food, with a focus on strong value, quality ingredients and a warm, in-store ambiance.

My Cava Deep Dive can be found here.

b. Key Points

  • Underwhelming results.
  • Poor macro and tough Y/Y comps.
  • New stores performed quite well.
  • 16%+ store growth for 2026.

c. Demand

  • Missed revenue estimates by 0.8%.
    • Traffic rose by 0% Y/Y vs. 0% last quarter and 7.5% 2 quarters ago.
  • Missed 2.7% same store sales (SSS) growth estimates with 1.9% growth.

d. Profits

  • Missed 25.5% restaurant-level margin (RLM) estimates by 90 bps.
  • Met EBITDA estimates.
  • Met $0.12 GAAP EPS estimates.

RLM was pressured by a few items. Food, beverage and packing (FBP) costs rose very slightly as a percent of revenue due to chicken shawarma. 2% wage inflation also led to labor rising from 25.4% of revenue to 25.5% Y/Y. Notably, other operating expenses rose 80 bps as a percent of revenue and drove most of the RLM decline. This is due to elevated maintenance and repair expenses, which they’re exploring how to curb. Mix-shift towards 3P delivery, insurance costs and tariffs all weighed on the metric as well. Taken together, these factors powered the 100 bps of Y/Y deleveraging. EBITDA margin was still able to stay flat thanks to 140 bps of Y/Y corporate G&A leverage. This was fostered by lower legal fees.

Net income fell Y/Y due to a 28.5% effective tax rate compared to zero taxes paid last year. Earnings before tax (EBT) rose by 15.4% Y/Y.

e. Balance Sheet

  • $385M in cash & equivalents.
  • Diluted shares fell slightly Y/Y.
  • No debt.

f. Guidance & Valuation