CAVA Group (NYSE:CAVA) shares fell 11% to $54.59 after the Mediterranean restaurant chain reported third-quarter earnings and revenue below analyst estimates.
Earnings of $0.11 per share missed the consensus estimate of $0.12, while revenue of $356.44 million fell 0.28% short of expectations, according to Zacks.
CAVA Group also reported lower net income of $13.2 million, compared with $14.7 million a year earlier, for the quarter ended Oct. 4, 2026.
At the restaurant level, profit margin narrowed to 23.4% from 24.6%, reflecting additional labor investment, more third-party delivery and spending on repairs and maintenance.
Sales growth also slowed, with same-restaurant sales rising 3.1% versus 9% in the previous quarter, while menu prices and product mix contributed 3% growth.
The chain attributed an approximately 1.5-percentage-point drag on same-restaurant sales to Cyclospora and broader concerns about consuming fresh produce.
Despite the slowdown, CAVA Group raised its fiscal year 2026 same-restaurant sales growth forecast to 6%–7% from 4.5%–6.5%, while narrowing its restaurant-level margin outlook to 23.7%–24% from 23.7%–24.3%.
Expansion continued with 24 net new restaurants, bringing the total to 500, as the chain raised its annual opening forecast to 76–78 from 75–77.
