A pedestrian carries a Hippo bag on Wall Street near the New York Stock Exchange (NYSE) on Monday, August 18, 2025 in New York, USA.
Michael Nagle | Bloomberg | Getty Images
hippopotamus on Tuesday cut its full-year forecast for the second straight quarter as younger consumers visit its restaurants less frequently.
“If you look at the different age groups in fast casual, it seems like consumers between 25 and 34 have been impacted a little bit more than other consumers, and fast casual tends to have a higher concentration of these consumers within its guest portfolio,” CFO Tricia Tolliver said in an interview, adding that the company has seen a decline in demand entering the final quarter of the year.
He cited the rising unemployment rate among young people as reasons for the shift away from spending, as well as the increased likelihood of facing student loan repayments that resumed in the spring. Additionally, the tariffs imposed by President Donald Trump “created a general fog for consumers,” Tolliver said.
fast casual competitors Chipotle Mexican Grill reported similar behavior from its age group when it released its third-quarter results on Wednesday.
Cava now expects same-store sales to increase 3% to 4% in 2025, a downward revision from its previous outlook of 4% to 6% growth. The company also expects restaurant-level profit margins to decline, lowering its previous forecast to a range of 24.4% to 24.8% from 24.8% to 25.2%.
Kava shares fell 5% in extended trading. As of Tuesday’s close, the stock had fallen 54% since the beginning of the year.
Here’s how the company reported for the quarter ended Oct. 5 compared to Wall Street expectations, based on a survey of analysts by LSEG.
Earnings per share: Adjusted 12 cents, in line with estimates Earnings: $292.2 million vs. $292.6 million expected
Cava’s same-store sales rose 1.9%, according to StreetAccount estimates, below Wall Street’s 2.8% estimate. The chain’s foot traffic was flat compared to the same period last year, but higher menu prices and an increase in combinations of premium protein options boosted sales.
Tribal said Cava is gaining market share despite slowing same-store sales growth. This fact suggests that consumers between the ages of 25 and 34 may be cooking or preparing lunches at home instead of relying on fast food.
“Consumers seem to be more cautious about their eating occasions and how often they eat,” Tolliver said.
Unlike Chipotle and the broader restaurant industry, Cava has seen much of its same-store sales growth from low-income consumers. Tolliver credited the chain’s choice to keep menu prices below inflation and provide more affordable options for budget-conscious consumers.
Cava’s net sales increased 20% to $292.2 million due to new restaurant openings. Since the third quarter of last year, Cava has opened a net 74 stores, bringing the total number of stores to 415 as of October 5th.
The Mediterranean chain reported third-quarter net income of $14.7 million, or 12 cents per share, down from $18 million, or 15 cents per share, in the year-ago period.
Excluding executive succession costs and other items, Cava earned 12 cents per share.
