Cava income beats estimates as Mediterranean chain experiences double-digit same-store gross sales expansion

Cava on Thursday reported better-than-expected gross sales in its newest fiscal quarter, shaking off the malaise the wider eating place business has felt as customers have reduce on eating.

The Mediterranean chain stated its same-store gross sales grew 10.8% within the 3 months that ended April 20, lifted by way of site visitors expansion of 7.5%. Analysts surveyed by way of StreetAccount have been projecting same-store gross sales expansion of 10.3%.

“When we look at our consumers in the quarter, we saw an increase in premium attachment on higher priced items, like our pita chips or amazing housemade juices. We also saw that our per person average continued to increase, and then when we look at our results, there’s positive traffic across all of our geographies, across all of our income cohorts, as well as the different formats of our restaurants and dayparts,” Chief Financial Officer Tricia Tolivar advised CNBC.

She added that diners had been buying and selling up from instant meals and down from casual-dining eating places into Cava’s bowls and pitas, a development the corporate has observed for a number of quarters.

Elsewhere within the eating place business, firms had been reporting very other habits from customers, even if many firms’ effects didn’t come with any time in April, when the business’s gross sales and site visitors efficiency advanced.

Fast-casual rival Chipotle stated its transactions fell 2.3% within the first quarter as customers pulled again their spending in February, spooked by way of financial uncertainty. Sweetgreen reported its first quarterly same-store gross sales decline because it went public in 2021. McDonald’s CEO Chris Kempczinski stated fast-food business information confirmed each low- and middle-income customers spending much less. The burger large stated U.S. same-store gross sales declined 3.6% for the primary quarter.

Despite the sturdy quarterly efficiency, Cava reiterated its same-store gross sales forecast, sticking with its projections of a 6% to 8% building up. The chain stated remaining quarter that it’s anticipating slower expansion within the again part of its fiscal 2025.

The inventory fell 5% in prolonged buying and selling. As of Thursday’s shut, Cava stocks have slid 11% up to now this yr, harm by way of investor considerations over its conservative outlook for the fiscal yr and the commercial fallout from the Trump management’s price lists.

Here’s what the corporate reported in comparison with what Wall Street was once anticipating, in line with a survey of analysts by way of LSEG:

• Earnings in step with percentage: 22 cents. That would possibly not examine with the 14 cents in step with percentage anticipated by way of LSEG.
• Revenue: $332 million vs. $327 million anticipated

The corporate reported fiscal first-quarter web revenue of $25.71 million, or 22 cents in step with percentage, up from $13.99 million, or 12 cents in step with percentage, a yr previous. Cava reported an revenue tax good thing about $10.7 million associated with stock-based repayment, which boosted its income this quarter.

Net gross sales climbed 28% to $332 million. On a 12-month trailing foundation, Cava’s income has surpassed $1 billion, representing a big milestone for the corporate.

The corporate did elevate a few of its projections for the fiscal yr.

Cava now anticipates adjusted income earlier than hobby, taxes, depreciation and amortization of $152 million to $159 million, up from its prior forecast of $150 million to $157 million. The corporate additionally plans to open between 64 and 68 new places, upper than its earlier outlook of between 62 and 66 eating place openings.