CAVA Group surpasses revenue estimates, strong traffic growth, and pricing discipline driving impressive performance.

From Yahoo Finance: 2025-05-19 13:12:00

B Of A Securities analyst Sara Senatore increased CAVA Group’s price forecast from $112 to $121 while reiterating a Buy rating. CAVA’s first-quarter revenue of $331.83 million beat estimates, with adjusted EPS of 22 cents exceeding analyst estimates of 14 cents. Full-year same-restaurant sales growth guidance remains unchanged at 6-8%.

First-quarter 2025 SSS growth of 10.8% exceeded estimates, driven by traffic (+7.5%) and pricing discipline (~1.7%). Despite headwinds, CAVA’s performance exceeded guidance, with stacked SSS growth of +41.5%, including weather impact. Analyst believes FY25 SSS guidance is conservative with strong performance in recent menu innovations and advertising.

Analyst estimates FY25 SSS growth at 7.4%, with stronger traffic growth offsetting a lower mix. FY25 Restaurant Level Margin is estimated at 25.3%, with revised EPS estimates of 58 cents due to increased pre-opening costs for faster unit growth. TD Cowen analyst Andrew M. Charles reiterated a Buy rating with a $120 price forecast.

CAVA shares are trading 4.65% lower at $92.30. Charles noted the company’s unique advantage from organic brand discovery and meaningful sales catalysts, potential upside to 2025 SSS and adjusted EBITDA guidance, maintaining estimates and a “Top Pick” rating.

Read more: CAVA’s Traffic-Driven Growth, Price Discipline Is Better Than Broader Market: Analyst