CNBC Television
Cava CEO Brett Schulman on Q3 results: Seen a moderation in sales with younger consumers this year
11/5/2025, 12:33:27 PM
Economic Summary
- Cava reported 20% year-over-year revenue growth and two-year same-restaurant sales comps rose from 16.5% to 20%, but the most recent quarter's same-store sales were 1.9% versus 2.8% expected, leading management to trim guidance and signal near-term softness despite underlying growth.
- Younger consumers (age 25-34) have reduced visit frequency—cited causes include resumed student loan repayments, housing costs, local political impacts (mayoral election) and broader inflation—creating demographic headwinds for fast-casual chains like CAVA, CMG, and SG.
- Pricing dynamics: the restaurant industry raised prices about 34% since 2019 while CPI rose ~27%; Cava increased prices under 17% in the same period, which management says has improved Cava's relative value proposition as industry transactions fell ~7% since 2019, implying potential competitive advantage on price sensitivity.
- Margin outlook: management absorbed roughly 20 basis points of tariff impact and incurred extra repairs/maintenance spend; they expect low- to mid-single-digit COGS inflation next year and are choosing to absorb some costs to maintain value for guests.
Bullish
- Revenue grew 20% year-over-year.
- Two-year same-restaurant-sales comps accelerated to ~20%.
- Cava raised prices less than peers, improving its relative value proposition since 2019.
Bearish
- Younger diners (25-34) are visiting less due to student loan repayments and inflationary pressures.
- Same-store sales missed expectations (1.9% vs 2.8%), prompting a trimmed outlook.
- Margins pressured by unexpected repair/maintenance spend and tariff impacts.
- Guidance trimmed because of macro uncertainty including government shutdown effects on traffic.
Bullish tickers
CAVA
Bearish tickers
CAVACMGSG
CAVA
Bullish
20% revenue growth YoY, improved two-year comps (~20%), and a more competitive price position versus peers.
Bearish
Foot traffic weakness among younger diners, same-store sales miss, margin pressure from tariffs and maintenance, and a guidance cut.
CMG
Bullish
Historically strong growth franchise but cited as part of the cohort experiencing slowed momentum.
Bearish
Mentioned as an example of growth stocks seeing moderation in growth and traffic.
SG
Bullish
Part of fast-casual growth group with long-term upside but near-term frequency headwinds.
Bearish
Cited alongside peers as seeing deceleration among young consumers.
People mentioned
Brett Schulman