CAVA Group, Inc. (NYSE: CAVA) saw its stock price jump over 21% following the release of its fourth-quarter 2025 earnings, which surpassed Wall Street expectations and provided strong guidance for 2026. The Mediterranean fast-casual restaurant chain reported Q4 revenue in the range of $272.8 to $275 million, representing a 21.2% year-over-year increase and beating the consensus estimate of approximately $268 million.
Adjusted earnings per share (EPS) came in at $0.04, exceeding the expected range of $0.00 to $0.03, though it was slightly down from $0.05 in the same quarter the previous year. A key point of concern was comparable sales growth, which slowed to just 0.5%—the weakest performance since CAVA's initial public offering in 2023. This was driven by a 1.4% year-over-year decline in guest traffic, with higher menu prices largely responsible for keeping comparable sales positive.
Investor optimism was primarily fueled by the company's forward-looking guidance. CAVA projected comparable sales growth of 3% to 5% for the full year 2026, a figure that was stronger than many Wall Street models had anticipated. This positive outlook helped the stock recover from a difficult 12-month period during which it had fallen 32%, weighed down by volatile same-store sales and softer consumer traffic.
The earnings beat triggered a wave of analyst upgrades. Bernstein raised its price target to $84 from $75, maintaining an Outperform rating and citing brand awareness, loyalty engagement, and menu innovation as long-term drivers. Stifel was notably bullish, raising its target to $90 with a "buy" rating, while UBS lifted its target to $75. Needham, TD Cowen, and Telsey Advisory Group also increased their targets to $90, $90, and $88, respectively. J.P. Morgan analyst John Ivankoe maintained an Overweight rating, stating Q4 results appeared to have "bottomed" and describing CAVA as "an economically advantaged business model."
Management highlighted several growth initiatives. The company's loyalty program now drives roughly one-third of total sales, with a new tier called OASIS in development to deepen engagement. Catering is being tested in Houston, with plans to launch in a second market this year and a broader rollout expected in fiscal 2027. Bernstein analysts noted catering represents "a meaningful, incremental channel."
On the operational front, CAVA ended 2025 with 439 locations and plans to open up to 76 new units in 2026, many in untapped Midwest markets. The company is targeting over 1,000 restaurants by 2032. Menu innovation continues with the planned Q1 2026 launch of "Pomegranate-glazed Salmon," the brand's first seafood offering, aimed at broadening its consumer base.
