Is CAVA Positioned to Capture the Fast-Casual Mediterranean Boom?

CAVA Group, Inc. (CAVA) is making a strong case as the leader in fast-casual Mediterranean dining, a category it continues to define and expand.

In the second quarter of 2025, revenues rose 20.3% year over year to $278.2 million, with same-restaurant sales up 2.1% despite difficult comparisons from last year’s steak launch. The company also achieved a restaurant-level profit margin of 26.3% and net income of $18.4 million.

CAVA’s growth strategy hinges on aggressive expansion and menu innovation. The chain now operates nearly 400 restaurants across 28 states, with new openings consistently exceeding sales expectations — recent cohorts are trending above $3 million in average unit volumes (AUVs), far surpassing the company’s $2.3 million target. Management remains confident in reaching at least 1,000 locations by 2032, underscoring the brand’s portability and broad consumer appeal.

Menu innovation is another catalyst. Following the successful introduction of steak, CAVA is preparing to roll out chicken shawarma nationwide this fall, while also testing salmon and expanding its pita chip platform with seasonal variations. These additions not only diversify protein choices but also keep guests engaged with fresh offerings that balance health, flavor and value.

Operational investments, including kitchen display systems, AI-driven food prep and new oven technology, aim to boost consistency, throughput and digital accuracy, enhancing the guest experience at scale.

With robust cash reserves, no debt and guidance for full-year same-restaurant sales growth of 4-6%, CAVA appears well positioned to capitalize on the Mediterranean boom. Its brand equity, innovation pipeline and white-space opportunity indicate a long runway for growth, even amid broader industry headwinds.

Competitive Landscape: Chipotle and Sweetgreen

CAVA faces competition from other fast-casual leaders that thrive on health-forward and customizable dining experiences. Chipotle Mexican Grill (CMG), with more than 3,500 units, offers scale and operational discipline that sets a benchmark for the industry. CMG’s strong digital ecosystem and consistent menu innovation, from lifestyle bowls to plant-based options, mirror CAVA’s strategy of pairing bold flavors with wellness-driven choices. As CAVA expands, CMG remains a formidable rival given its entrenched brand awareness, supply-chain efficiency and ability to sustain high average unit volumes.

Meanwhile, Sweetgreen (SG), though smaller in scale, competes directly with CAVA in urban centers where health-conscious consumers seek fresh, customizable meals. SG’s emphasis on sustainability, technology-enabled ordering and menu transparency resonates with a similar demographic as CAVA. With it pushing to broaden footprint beyond coastal strongholds, head-to-head competition between Sweetgreen and CAVA is intensifying, particularly in cities where Mediterranean and salad-forward dining intersect.

CAVA’s Price Performance, Valuation & Estimates

Shares of CAVA have lost 29.7% in the past six months compared with the industry’s decline of 8.7%.

Price Performance

From a valuation standpoint, CAVA trades at a forward price-to-sales ratio of 5.37X, above the industry’s average of 3.59X.

P/S (F12M)

The Zacks Consensus Estimate for CAVA’s 2025 and 2026 earnings per share (EPS) implies a year-over-year uptick of 33.3% and 18.8%, respectively. EPS estimates for 2025 and 2026 have declined in the past 60 days.

CAVA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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