Cava Group Inc.’s sales rose in the first quarter, which defied dissatisfaction with its competitors, slowing restaurant visits.
Sales at mature restaurants rose 10.8% in the three months ended April 20, consistent with average estimates from analysts surveyed by Bloomberg, mainly due to increased customers. Adjusted EPS is expected in advance.
Cava shares fell 5.1% at 4:21 p.m. in late trading in New York. The company raised its outlook for the full year to measure earnings that exclude taxes, interest and other items, but did not raise its perception of same-store sales. Cava has surpassed its competitors in recent quarters, which has raised expectations for investors.
The first quarter performance was driven from easier comparisons to one year ago, while Cava has seen the smallest same-store sales increase since its public offering in 2023. Nevertheless, these results contrast with fast-casual peers, such as Sweetgreen Inc. and Swipotle Mexican Grill Inc. (Chitote Mexican Grill Inc.), reporting that they attributed to an increasing number of consumers, which led them to an increasing number of cairifce, to a deviant craze.
Fast food chains such as McDonald’s and Wendy also said that consumer sentiment was weak, hurting the latest quarterly results.
Mediterranean-style dishes are often lower than those offered by competitors such as Sweetgreen, a factor that seems to be good for Cava. CEO Brett Schulman said the company raised prices by 1.7% in January, but there was no plan to raise further this year.
“I think relative value is very important to consumers when they face so much uncertainty and the pressure around them,” Schulman said in an interview. He added that customers chose extra features like PITA chips and bought higher-priced proteins like steaks and lambs while still maintaining the “budget range.”
The company’s website says a chicken and rice bowl is $12.25 before tax at the Chicago location in Kava on Thursday. Sweetgreen’s Harvest Bowl also has chicken, which costs $13.95 in a store in the same neighborhood, while the salad-closeed crisp rice bowl is $14.25.
Cava’s fiscal first quarter included a turbulent period when President Donald Trump announced widespread tariffs. According to the company, the trend stabilized throughout the period with no obvious customer pullback. The fires in the U.S. and Los Angeles also hurt the industry in the first few months of the year.
“Our business and our guests are resilient,” Schulman said, although obstacles include challenging weather, fires and tariffs.
The chain slightly raises the prospect of how many locations it will open this year. According to Schulman, last year it purchased all equipment for the new restaurant, so the tariffs should not meet its construction costs.
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