CAVA Group Inc. (CAVA) stock fell Thursday after the Mediterranean restaurant chain missed third-quarter earnings and revenue estimates. CEO Brett Schulman cited “broader industry pressures” that weighed on customer traffic.

During Wednesday’s earnings call, Schulman said traffic pressures eased toward the end of the quarter.

Management also highlighted restaurant upgrades, loyalty programs and menu innovation as key growth priorities.

CAVA Misses Third-Quarter Estimates

CAVA reported earnings of 11 cents per share, missing Wall Street’s estimate of 12 cents. Revenue reached $356.44 million, below analysts’ estimate of $358.54 million.

Same-restaurant sales rose 3.1%, while average unit volume increased to $3.1 million from $2.9 million a year earlier.

Restaurant-level profit climbed 16.2% to $82.7 million, with a 23.4% margin.

CAVA opened 24 net new restaurants, bringing its total to 500 locations, up 20.5% year over year. Digital sales accounted for 38.5% of revenue.

Traffic Pressures Show Signs of Easing

Schulman blamed weaker traffic on consumer concerns about fresh produce and rising gasoline prices.

However, he described these pressures as temporary and said they did not weaken CAVA’s long-term growth prospects.

CAVA Focuses on Remodels and Loyalty

CAVA is upgrading older restaurants through Project Sunkist, which brings elements of its Project Sol design to existing locations.

Schulman said loyalty purchases rose 8% in one local market following a promotional event.

Meanwhile, about two-thirds of restaurants improved their guest experience during a companywide operational review.

CAVA is also simplifying kitchen operations. Its rollout of pre-marinated chicken aims to give employees more time to serve customers.

Salmon Stays Longer As Shrimp Launch Nears

CAVA is taking a measured approach to menu expansion to avoid disrupting restaurant operations.

“So salmon will stay on the menu through spring. We had originally said through the end of the year,” Schulman said.

He added that CAVA would provide more details next quarter about the official launch date for shrimp.

CAVA Price Action: CAVA shares fell 10.65% to $55.38 in Thursday’s premarket trading, according to market data.