The company reported Wednesday that third-quarter Cava segment revenue rose 22.1% year over year to $353.7 million, while same-restaurant sales increased 3.1%, with guest traffic slightly positive. Consolidated revenue totaled $356.4 million, short of analysts' estimate of about $358.4 million.
Cava has been one of the restaurant industry's strongest performers in recent years, particularly in growth and sales momentum. The challenge now is balancing expansion with operational discipline, particularly as the chain enters new markets and consumers become more cautious about spending.
Chief financial officer Tricia Tolivar said Cava's newest restaurants are operating at roughly 100% productivity, suggesting the company has room to expand into new markets without sacrificing sales performance. "Even more encouraging is the strength of those new restaurant openings," she said.
Tolivar attributed about 150 basis points of the same-restaurant sales impact to consumer concerns about fresh produce following a Cyclospora outbreak, even though Cava was not among the chains linked to it. Excluding that impact, same-restaurant sales would have grown roughly 4.6%. The company nevertheless raised its full-year same-restaurant sales guidance to 6% to 7%, up from 4.5% to 6.5%.
Tolivar said Cava has kept price increases below inflation over the past six years while investing in technology and employee development, including a new operator portal that lets general managers manage digital orders and update out-of-stock items in real time, and an in-house command center that consolidates restaurant performance data.
For a chain that now operates in 31 states and Washington, D.C., running 1,000 restaurants will require maintaining consistent execution, controlling costs and protecting the customer experience across a much larger operation. Tolivar said Cava reached the milestone through long-term planning, performance tracking and adapting as circumstances changed. "When curveballs come your way, how do you then pivot and adjust so that you can continue to meet, if not exceed, expectations?" She added that Cava is investing "not for the next 12 weeks, but for the next 12 years and beyond."