Cava’s actions fell 16% in the afternoon trade on Wednesday, making it the last fast channel to feel the anger of Wall Street after reporting disappointing quarterly sales.
A year ago, restaurants like Mexican grill chipotle And Cava pointed out a two -digit sales growth growth, even if the wider catering industry posted a drop in traffic and falling sales. But times have changed. This spring, the fast channels saw the swivel traffic decrease while sales slowed down or even shrink.
To explain the slowdown, the leaders said that the guests are “cautious”, in the words of Sweetgreen CEO Jonathan Neman, or dealing with an economic “fog”, according to the financial director of Cava Tricia Tolivar.
And just as guests find reasons why Shake Burgers or Chipotle Bowls, investors cut their assets in the event of a quick box after rewarding companies last year for outperforming the rest of the industry. Until now in 2025, Shake Shack stocks have dropped by 16%; The chipotle stock slipped 28%; Cava shares fell 37%; And Sweetgreen’s stock plunged 70%. Among the notable channels listed on the stock market, only Wingstop managed to stay in green this year, with 20%gains.
More broadly, investors have become more cautious about bets on all restaurants, given the low traffic trends and concerns about consumer spending, according to a research note on Sunday UBS. Even fast food companies have experienced traffic declining and slow sales growth, despite their historic reputation for betting during economic uncertainty.
While some rapid channels have reported specific reasons for the company for their weakest than expected results, managers also said that economic uncertainty weighed on consumers – and affects their sales.
Generally, guests in the event of rapid pace are higher income and more likely to have white collar jobs. However, the CEO of Chipotle, Scott Boatwright, blamed a low -income consumers’ decline for sales drops with comparable 4% chain in the second quarter.
“You should not seek further than what happens with our competitors with snacks or meals of $ 5. This is where the consumer drifts, towards, [with] Value as a price, due to the low feeling of consumers. I think that when the feeling improves, the company will improve. I think it is probably the biggest front wind that we are facing, “he told analysts at the company Conference on the company’s results on June 23.
The feeling of consumer feeling of the University of Michigan slipped in April to 52.2, one of its lowest recorded readings. It was held at this level in May before rising in June to 60.7.
The chains in case of fast fasting also see the economic anxieties of consumers in their own research.
“Thanks to our regular consumer research, we hear concerns about high prices, future job prospects and general anxiety about the future”, ” Wingstop CEO Michael Skipworth said at the company’s results conference in late July.
The chicken wing chain said that comparable store sales decreased 1.9% for the quarter, a spectacular reversal compared to its growth of 28.7% during the period of the previous year.
During the Conference Conference of the company’s results on Thursday, Neman de Sweetgreen said that the chain had seen “a more prudent consumption environment from April” – coinciding with the drop in consumer feeling. A “backdrop of the moderate industry”, in particular in several of the largest urban markets in the chain, has contributed to the “really, really difficult neighborhood” in Sweetgreen, according to Neman.
This is one of the reasons why the salad chain has reported a steer than expected decrease in its sales with comparable stores and reduced its annual forecasts for the second consecutive quarter. Sweetgreen leaders also attributed the low quarterly performance to a difficult comparison to launching Steak from last year and the transition of its loyalty program.
To improve its perception of value among customers, Sweetgreen increases its 25%chicken and tofu portions, improving its chicken and salmon revenues and implementing promotional prices, such as $ 13 menu drop drops for its members of the loyalty program.
As for Cava, the company experienced investors with impressive sales growth in comparable stores since its initial public offer two years ago. But this quarter, the Mediterranean chain brought in sales growth at 2.1%comparable stores, well below 6.1%Wall Street projections. The leaders said that he was confronted with difficult comparisons for sales growth of 14.4% of the previous year, which was fed by its own Steak launch and its high demand in the new restaurant locations that have decreased this year.
“Cava is not so special after all. After having breathtaking the same store sales in the first quarter of 10.8%, it fell online with the industry 2.1% in the second quarter. It is not negative, so this is useful,” said Tracey Rynic, Stage of shares at Zacks Investment Research.
Cava leaders have also recognized that economic concerns weigh on the guests.
“Admittedly, we operate in a fluid macroeconomic environment and it is the one that creates a fog for consumers where things are constantly changing and it is difficult to see clear. And during these periods, they tend to descend from gas,” said Tolivar during the Society’s call conference on Tuesday evening.
However, Cava does not see consumers negotiating with cheaper protein options, or the experience of any other deeper commercial concern, said the co-founder and CEO Brett Schulman. And while entering the third quarter, his sales with comparable stores have improved, said Tolivar.
And Cava is not the only fast restaurant in the event of a return to form in the second half of the year, especially since the feeling of consumers has improved in June and July.
Chipotle said its traffic started to increase while the Burrito chain left the quarter and continued in July. Sweetgreen has experienced a “modest” improvement in its sales at comparable stores so far in the third quarter, according to Neman.
And while Wingstop leaders have said they always saw a lower demand for consumers, the chain is facing easier comparisons for last year’s performance.