Real-Time BNB Signal Analytics
Real-Time BNB Signal Analytics
CAVA Group's Q3 2025 results are in, and the headline numbers look decent enough. Revenue jumped 20% year-over-year to $289.8 million. Net new restaurants are up, AUV (Average Unit Volume) ticked upwards, and they're still talking about being a "category-defining Mediterranean fast-casual restaurant brand." But let's dig a little deeper, shall we?
That 20% revenue growth? It's primarily fueled by new restaurant openings. They added 17 net new locations during the quarter, bringing the total to 415. That’s a 17.9% increase in the number of stores. So, the revenue growth is almost entirely explained by adding more restaurants. It’s like saying you’re getting richer because you’re working more hours, not because you're getting paid more per hour.
The more concerning figure is the Same Restaurant Sales Growth, which limped in at 1.9%. That's practically flat. And it’s worth remembering that the prior year's quarter included an extra week, which artificially inflated the comparable AUV. Without that extra week in 2024, the AUV growth looks even less impressive. Is this a sign that the CAVA concept is reaching saturation, or are they just not innovating enough to keep customers coming back? What new menu items are genuinely driving excitement (and repeat visits), and which are just window dressing?
The digital revenue mix is holding steady at 37.6%. That's a good sign – it suggests they've successfully integrated online ordering and delivery into their business model. But it also begs the question: how much more can they squeeze out of digital? Are they hitting a ceiling?
Restaurant-level profit margin is 24.6%. That's a solid number, but it's also down from previous guidance. They’ve revised their full-year outlook downwards, from 24.8%-25.2% to 24.4%-24.8%. It’s a small change, about 0.4%, but it's a downward revision nonetheless. And they've also increased their projected pre-opening costs—from $15.5-$16.5 million to $18.0-$19.0 million. This could indicate increasing competition for prime real estate, or perhaps difficulties in managing the logistics of opening new locations.
Adjusted EBITDA is up, from $33.5 million to $40.0 million. But again, they've lowered their full-year guidance, from $152.0-$159.0 million to $148.0-$152.0 million. This pattern of lowering expectations raises a red flag. What unforeseen costs or challenges are they encountering that are forcing them to dial back their projections?
And this is the part of the report that I find genuinely puzzling. CEO Brett Schulman boasts that new restaurant productivity remains above 100%, with the 2025 cohort trending above $3 million in average unit volumes. If that's true, why are overall same-store sales growth so anemic? Are the older restaurants dragging down the average? If so, what's the plan to revitalize those underperforming locations? Are they considering menu revamps, targeted marketing campaigns, or even strategic closures? The report offers no answers.
