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Stock Rally Follows Earnings Beat

Cava’s stock soared roughly 26% after the company posted stronger-than-expected quarterly results and issued an upbeat outlook, surprising investors who had anticipated softer demand across the restaurant sector. The rally reflects growing confidence in the brand’s ability to sustain growth despite a challenging consumer spending environment.

The company exceeded Wall Street expectations on both revenue and earnings, reinforcing its position as one of the fastest-growing concepts in the fast-casual dining space.

Revenue Milestone and Financial Performance

For the fourth quarter, Cava reported revenue of about $275 million, representing nearly 21% year-over-year growth and topping analyst estimates. Earnings came in at 4 cents per share, slightly ahead of projections, while quarterly net income totaled approximately $4.9 million.

On a full-year basis, the company crossed the $1 billion revenue mark for the first time, posting more than 20% annual growth and same-store sales gains of around 4%. The milestone highlights the brand’s expanding footprint and increasing consumer awareness.

Same-Store Sales Defy Expectations

Comparable restaurant sales rose 0.5% in the fourth quarter, outperforming forecasts that had called for a decline. The increase was primarily driven by menu pricing and product mix improvements, which offset a modest 1.4% drop in customer traffic.

Leadership noted that pricing adjustments of roughly 1.7% implemented earlier in the year helped protect margins while maintaining a strong value perception among guests. Future price increases are expected to remain minimal.

Strategy in a Changing Consumer Landscape

Chief Financial Officer Tricia Tolivar said the company’s approach has allowed it to appeal to customers across income levels, effectively navigating what economists often describe as a “K-shaped” recovery.

The brand has seen improving demand across demographics and regions, including strong performance in markets with lower median household incomes, indicating broad consumer appeal.

CEO Brett Schulman emphasized that Cava’s focus on fresh ingredients, bold flavors, and hospitality continues to differentiate it in a crowded fast-casual segment.

Expansion Fuels Long-Term Growth

Cava opened 72 net new restaurants during the fiscal year, bringing its total footprint to 439 locations nationwide. For 2026, the company plans to add approximately 74 to 76 new restaurants, maintaining a steady expansion pace.

Management also forecast same-store sales growth between 3% and 5% for the upcoming year, signaling confidence in sustained demand.

Menu Innovation and Future Outlook

Looking ahead, Cava expects incremental growth from new menu initiatives, including the introduction of a salmon offering that marks its first entry into seafood. Product innovation, combined with disciplined pricing and expansion, is expected to support revenue momentum.

The company’s recent performance suggests that even in a cautious spending environment, brands that balance perceived value with quality and experience can continue to capture market share.

Investor Takeaway

The sharp stock move underscores how sensitive the market is to signs of resilience in consumer-facing businesses. With strong revenue growth, continued unit expansion, and improving sales trends, Cava is positioning itself as a standout performer within the fast-casual restaurant industry heading into 2026.