U.S. stocks lower as investors rotate out of tech ahead of Jackson Hole
Investing.com -- CAVA Group Inc (NYSE:CAVA) reported better-than-expected first quarter earnings and revenue on Wednesday, but shares fell 2.4% in after-hours trading as the company’s outlook disappointed investors.
The Mediterranean fast-casual restaurant chain posted adjusted earnings per share of $0.22 for the first quarter, significantly beating analyst estimates of $0.02. Revenue surged 29.5% YoY to $331.83 million, also topping the consensus forecast of $280.93 million.
CAVA’s same restaurant sales grew 10.8% in Q1, including 7.5% traffic growth. The company opened 15 net new restaurants during the quarter, bringing its total to 382 locations across 26 states and Washington D.C.
"In spite of economic uncertainty and challenging weather, CAVA’s first quarter results demonstrate the continued strength of our category-defining brand," said CEO Brett Schulman.
Despite the strong Q1 performance, CAVA’s outlook for the full fiscal year 2025 fell short of expectations. The company slightly raised its net new restaurant opening target to 64-68 from 62-66 previously, but maintained its same restaurant sales growth forecast of 6-8%.
CAVA now expects adjusted EBITDA of $152-$159 million for fiscal 2025, up marginally from its prior guidance of $150-$157 million. However, investors appeared to view the outlook as conservative given the robust Q1 results.
The company’s restaurant-level profit margin was 25.1% in Q1, down slightly from 25.2% a year ago due to higher input costs and wage investments.
CAVA’s digital revenue mix stood at 38% for the quarter as the chain continues to focus on omnichannel growth.