What Happened?
Shares of mediterranean fast-casual restaurant chain CAVA (NYSE: CAVA) jumped 20.7% in the morning session after the company reported fourth-quarter results that topped Wall Street's expectations for revenue and profit.
The fast-casual eatery posted revenue of $275 million, up 20.9% from the previous year, and ahead of the $268.6 million analysts had forecast. Its profit of $0.04 per share also edged out the consensus estimate of $0.03. This performance was driven by continued expansion, with the company ending the year with 439 locations, up from 378 a year earlier. However, the results were not entirely positive, as same-store sales were flat year on year, a notable deceleration. Additionally, the company's full-year EBITDA guidance of $180 million was slightly below expectations. Despite the mixed outlook, investors appeared to focus on the top- and bottom-line beats for the quarter.
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What Is The Market Telling Us
CAVA’s shares are extremely volatile and have had 32 moves greater than 5% over the last year. But moves this big are rare even for CAVA and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 2 days ago when the stock dropped 3% on the news that the Trump administration's announcement of new global tariffs, reignited trade policy uncertainty.
The move came swiftly after the Supreme Court ruled the previous week that the president could not use the International Emergency Economic Powers Act (IEEPA) for such duties, a decision that had initially sent markets higher. However, the administration invoked a different authority, the Trade Act of 1974, to impose a 15% global tariff for up to 150 days. The rapid reimposition of trade barriers creates significant uncertainty for companies across multiple sectors that depend on international supply chains and global trade. Investors are now weighing the potential impact of these new duties on corporate earnings and broader economic activity.
CAVA is up 38.9% since the beginning of the year, but at $84.09 per share, it is still trading 15.7% below its 52-week high of $99.70 from May 2025. Investors who bought $1,000 worth of CAVA’s shares at the IPO in June 2023 would now be looking at an investment worth $1,921.
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