MW Cava's stock rockets, as people are returning to food they like - not just what's cheap

By Bill Peters

Restaurant chain's CEO suggests customers might be getting tired of chasing discounts and deals, and are going back to the food they like

Cava reported fourth-quarter earnings after the closing bell Tuesday.

Shares of Cava Group were soaring toward a record gain on Wednesday, after the Mediterranean fast-casual chain issued an upbeat sales forecast for this year - a sign people may be getting a little less cautious about how they spend their money.

The effects of snowstorms and last year's government shutdown had kept consumers selective, leading to a drop in foot traffic at Cava restaurants. But CEO Brett Schulman told MarketWatch in a late-Tuesday interview that he expects this year to be better than last year, as customers appeared to feel better about spending again.

Schulman said that, despite some weakness in the job market, people are returning to food that they like. He said the current backdrop for restaurants "may be getting a little less deal-driven," and that people could be "getting fatigued with going for every discount and deal."

The company's shares $(CAVA)$ shot up 23.6% in recent morning trading, and were headed toward their highest close since Aug. 12, 2025. It was also on track to break the previous record for a one-day gain of 19.6% set on Dec. 12, 2023.

While economists worry about a "K-shaped" economy - where things get better for wealthier shoppers but worse for everyone else - Schulman said trends improved across all customer income levels for Cava, including lower-income diners hit harder by inflation.

"We're bridging the gap of that K," he said.

Still, Schulman's comments come as other restaurants have said consumers remain cautious because the cost of living has risen over the past several years. Fast-food chains have been discounting more aggressively to reclaim customers they lost after raising menu prices in the wake of supply shocks and the pandemic's economic disruptions. McDonald's $(MCD)$ this month said its value deals were bringing back customers, but forecast a bumpy ride in 2026.

Results earlier this month from Chipotle $(CMG)$, one of Cava's fast-casual restaurant rivals, also suggested the year ahead would bring challenges similar to last year. Fast-casual chains have faced steeper competition from sit-down chains, some of which have tried to offer their own value deals, and signs of "slop bowl" fatigue.

Even accounting for Wednesday's rally, Cava's stock has lost 15.6% over the past 12 months. Meanwhile, Chipotle shares have dropped 29.4% over the past year, while the S&P 500 index SPX has advanced 16.5%.

Cava said late Tuesday that it expects same-store sales to grow 3% to 5% this year. The midpoint of that range was above Wall Street analysts' expectations for 3.2%. The company raised menu prices by 1.4% last month, but said it didn't plan to raise them again this year.

For the fourth quarter, Cava's sales were $274.9 million, with same-store sales up 0.5% and earnings per share coming in at 4 cents. All were above Wall Street's estimates. Higher menu prices, in part, lifted same-store sales.

The company said that foot traffic slipped 1.4% during the fourth quarter. Ahead of the results, retail-analytics firm Placer.ai estimated a bigger jump in visits during the period, helped by a more-refined loyalty program.

Following the results, analysts said new menu items, such as a pomegranate-glazed salmon offering and white sweet potatoes, would help drive traffic. Stifel analysts, in a note on Tuesday, cited improvements to oven equipment and staffing, including recent steps to fill assistant general-manager roles.

Some of those moves would put pressure on margins, the Stifel analysts said. But they liked the company's positioning nonetheless.

"We believe part of Cava's success stems from management'scareful attention to areas in need of investment and a willingness to sacrifice short-term margin performance to set the business up for success," the analysts said.

-Bill Peters

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February 25, 2026 12:01 ET (17:01 GMT)

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