Nov 4 (Reuters) - Mediterranean restaurant chain Cava
Group ( CAVA ) cut annual same-store sales growth forecast for
the second time this year on Tuesday, signaling softer
dining-out demand, especially from lower-income and younger
customers.
Shares of the Washington, D.C.-based company were down 4%
after the bell.
Cava ( CAVA ) now expects full-year same-restaurant sales to rise
between 3% and 4%, down from its prior forecast of 4% to 6%.
Fast-casual brands such as Chipotle Mexican Grill ( CMG )
and Cava ( CAVA ) have warned of margin pressures and slowing demand from
the crucial segment of younger, lower-to-middle-income consumers
who are cutting back on discretionary spending.
Last week, Chipotle shares fell after the burrito chain
cut its sales forecast for the third time this year, while
fast-food chains such as Burger King and Domino's Pizza
have gained from their focus on value menu items.
Customers aged 25 to 35 are also under strain and pulling
back on spending amid rising unemployment, resumed student loan
payments and higher rents, Cava CFO Tricia Tolivar told Reuters.
The company also lowered its annual restaurant-level profit
margin forecast to 24.4%-24.8% from 24.8%-25.2%.
"In the current quarter, there's about a 20 basis point
impact related to tariffs, largely for our imported beef that
we've served to our guests every day," Tolivar added.
Revenue for the reported third quarter was $289.8 million,
below estimates of $292.59 million, helped by demand for its
dinner and lunch menu.
The company posted quarterly earnings of 12 cents per share
for the period ended October 5, compared with analysts'
estimates of 13 cents, according to data compiled by LSEG.