Good morning. As client strain turns into extra seen within the restaurant business, Cava stays targeted on development and constructing its management pipeline.
Cava, the Mediterranean-inspired fast-casual restaurant, reported its Q3 earnings final week. Income elevated 20% to $289.8 million. Nonetheless, the corporate its full-year gross sales development steering, reporting flat foot site visitors and a 1.9% enhance in comparable gross sales—wanting Wall Road expectations for two.7%.
Cava’s discount in expectations for the remainder of the 12 months components in a really unsure client financial dynamic, CFO Tricia Tolivar informed me. Amid a authorities shutdown, customers are feeling extra strain. “We took a really considerate and even handed method to our steering,” Tolivar mentioned.
In current earnings calls, the CEOs of Chipotle, Cava, and McDonald’s every pointed to client stress—significantly amongst youthful or lower-income prospects—as a headwind. These remarks assist the concept of a Okay-shaped financial system, the place high-income earners proceed spending broadly whereas lower-income households are tightening their belts, Fortune reported.
Cava has been very measured on worth will increase, Tolivar mentioned. For the reason that finish of 2019, Cava has elevated menu costs by roughly 15%—a charge under each inflation (about 23%) and typical menu will increase throughout quick-service eating places (about 30%+). The corporate raised menu costs by only one.7% in January and doesn’t anticipate vital will increase subsequent 12 months. “There’s strain on prices for us, however we don’t assume in at this time’s setting it’s applicable to move that each one on to the patron,” Tolivar added.
Deal with development and expertise pipeline
“Regardless of the challenges the patron is going through, now we have been capable of considerably develop market share, and that basically underscores the ability of the model and the white area alternative forward of us,” Tolivar mentioned.
Cava’s income has grown from roughly $564 million in 2022 to $954 million in 2024. The corporate’s momentum comes from the power of its model within the fast-growing Mediterranean class, which has been ranked the highest food plan for eight consecutive years, she mentioned.
Presently in 28 states with over 400 eating places, new areas are opening with common unit volumes above $3 million, greater than the general chain common, Tolivar mentioned. To assist development, Cava launched its “Taste Your Future” initiative to develop inner expertise for brand new management roles. The launch of a brand new assistant common supervisor program is likely one of the first actions underneath this initiative. Present common managers and space leaders consider high-performing candidates in Cava’s eating places to evaluate future management potential, Tolivar mentioned.
“After I was in New York not too long ago, Brett and I visited totally different eating places,” Tolivar mentioned. “After we walked into the Wall Road restaurant, our common supervisor mentioned, ‘Hey, let me introduce you to my new assistant common supervisor; she’s a high-potential staff member.’ It was inspiring to see the fervour for growing leaders.”
After I requested how she maintains deal with development amid unsure occasions, Tolivar emphasised agility and a gradual deal with technique. “Staying dedicated to our long-term targets—whereas adapting when wanted—will guarantee lasting success for our model and groups,” she mentioned.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
David G. Anderson was promoted to VP, CFO, treasurer and assistant secretary of Ampco-Pittsburgh Company (NYSE: AP), efficient January 1, 2026. Anderson will succeed Michael G. McAuley, who will assume the function of strategic advisor to the CEO till his deliberate retirement on June 30, 2026. Anderson may also retain his present function as president of Air and Liquid Programs Company, a wholly-owned subsidiary of Ampco-Pittsburgh. He joined the company in 2010 and brings over 35 years of expertise in finance and operations management to his new, expanded function.
Reza Taleghani was appointed EVP and CFO of Beneath Armour, Inc. (NYSE: UAA, UA), efficient February 2026. He’ll succeed David Bergman, a 21-year Beneath Armour veteran, who will step down as CFO. Taleghani has greater than 25 years of expertise. He joins Beneath Armour from Samsonite Group S.A., the place he has served as EVP and CFO since 2018. Earlier than becoming a member of Samsonite, Taleghani served as President and CFO at Brightstar Corp. He spent over 15 years at J.P. Morgan, holding senior roles in funding banking, industrial banking and asset administration, and served as President and CEO of Sterling Airways A/S in Copenhagen.
Huge Deal
The College of Michigan’s Shopper Sentiment Index fell to 50.3 within the preliminary November studying, down 3.3 factors (6%) from October. The decline was led by a 17% drop in present private funds and an 11% decline in year-ahead anticipated enterprise situations, in line with Joanne Hsu, director of surveys of customers on the College of Michigan.
“With the federal authorities shutdown dragging on for over a month, customers at the moment are expressing worries about potential unfavourable penalties for the financial system,” Hsu mentioned in a press release. “This month’s decline in sentiment was widespread throughout age, revenue, and political affiliation.”
The index is now at its lowest degree since June 2022, when it reached an all-time low of fifty, in line with an evaluation by S&P International Market Intelligence. Shoppers are struggling to construct and keep confidence in each the longer term and the current. The extended authorities shutdown has intensified considerations in regards to the financial system, the info present.
“The distinction between client emotions and client spending stays the story of 2025,” in line with S&P International Market Intelligence. “Had customers adopted their fears, the financial system would have been in recession way back.”
Going deeper
“Dow futures rise as sufficient Democrats be a part of Republicans to finish the shutdown and ‘give up’ on ACA subsidies” is a Fortune report by Jason Ma.
From the report: “U.S. inventory futures had been constructive on Sunday night as a invoice that may finish the longest-ever authorities shutdown superior within the Senate. A brief-term spending invoice cleared a procedural hurdle after seven Democratic senators and one unbiased voted with Republicans. Futures tied to the Dow Jones industrial common climbed 66 factors, or 0.14%. S&P 500 futures had been up 0.68%, and Nasdaq futures jumped 1.19%.”
The invoice would lengthen present funding by Jan. 30 and pay for SNAP and Veterans Affairs for the remainder of the fiscal 12 months, which ends subsequent September, Ma writes. There is not a provision within the invoice for an extension for Inexpensive Care Act subsidies. As an alternative, a promise that the Senate will vote on extending the subsidies by December. You’ll be able to learn extra right here.
Overheard
“That is an ‘AI Arms Race’ and what’s fueling this subsequent chapter of development is Huge Tech spending, and that isn’t slowing down into 2026.”
—Wedbush Securities analysts wrote in a Sunday business be aware. The analysts additionally mentioned that they imagine Nvidia’s earnings subsequent week will likely be a “constructive catalyst for tech shares into year-end as buyers proceed to underestimate the dimensions and scope of this transformational spending pattern over the subsequent few years.”
