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Investing.com -- Shares of Cava (NYSE:CAVA) fell 22% in premarket U.S. trading after the group slashed its annual restaurant sales forecast.
The eatery chain known for its Mediterranean cuisine posted earnings of $0.16 per share for the three months ended in June, compared with analysts’ consensus estimates of $0.13 a share.
Revenue rose by 20% versus a year earlier to $280.6 million. Analysts had projected a top-line figure of $285.6 million.
Cava also outlined plans to invest up to $10 million in Hyphen, a food service platform that uses robotics and artificial intelligence to automate the production of digital orders. Burrito group and key competitor Chipotle (NYSE:CMG) also contributed an investment of $15 million.
But Cava lowered its same store restaurant sales growth outlook to a range of 4% to 6%, down from 6% to 8% previously, as the CEO Brett Schulman flagged a "fluid macroeconomic environment."
President Donald Trump’s aggressive tariff agenda has led to an uptick in economic uncertainty that has threatened to persuade many would-be customers to rein in splurges on pricier activities like dining out.
In a post-earnings call, executives also said they expect to see "some very modest [...] impacts" from the levies because some of its products are sourced from countries facing elevated U.S. import duties.
Despite the reduced sales forecast, analysts at Jefferies said "investor skepticism remains overblown," adding that there is "broader strength" in Cava’s business model.
(Pratyush Thakur contributed reporting.)