Why Cava Stock Surged Today
Key Points
Cava Group is opening restaurants at a steady clip.
Sales are also rising at its older stores.
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Shares of Cava Group (NYSE: CAVA) climbed on Wednesday after the Mediterranean-style restaurant chain showed progress on its expansion initiatives.
By the close of trading, Cava's stock price was up over 26%.
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Cava's concept is resonating with diners
Cava's revenue rose 21.2% year over year to $272.8 million in its fiscal fourth quarter, which ended on Dec. 28. The gains were driven by store openings and higher sales at its existing locations.
The fast-casual restaurant brand opened 24 stores in the fourth quarter and a total of 72 in fiscal 2025. That brought its store count to 439 as of Dec. 28.
Cava's same-restaurant sales, which track revenue for stores open for at least 365 days, inched up by 0.5%. Menu price increases and a favorable product mix more than offset a 1.4% decline in guest traffic.
"As guests become more intentional with their spend, they are choosing brands like Cava that deliver real differentiation through bold flavors, healthy food, and hospitality that creates meaningful human connection," CEO Brett Schulman said during a conference call with analysts.
All told, Cava's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 2.6% to $25.8 million. The company's revenue gains were partially offset by store opening costs and other growth investments.
Cava's expansion will continue in 2026
Management plans to open about 75 new restaurants in fiscal 2026. Cava also sees sales at its existing locations rising by roughly 4%. Together, this should help to drive the restaurant chain's adjusted EBITDA to between $176 million and $184 million, up from $152.8 million in 2025.
"Our momentum and market share gains underscore the strength of our value proposition and reflect how deeply our brand is resonating with today's increasingly discerning consumer," Schulman said.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cava Group. The Motley Fool has a disclosure policy.
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