Cava beats quarterly revenue estimates on strong demand
May 15 (Reuters) - Cava Group (CAVA.N), opens new tab beat estimates for first-quarter revenue on Thursday, helped by robust demand for its Mediterranean cuisine despite a broader slowdown in dining out across the United States.
Cava also maintained its annual forecasts for same-store sales growth and margin at a time when companies are withdrawing or cutting their outlooks as President Donald Trump's shifting trade policy fuels economic uncertainty.
The company has been able to temper its price hikes amid fast-food chains raising menu prices significantly over the last few years, increasing consumers' appetite for Cava's fast-casual outlets.
First-quarter revenue grew 28.2% to $328.5 million, compared with estimates of $326.9 million, according to data compiled by LSEG.
Cava's same-store sales grew 10.8% in the quarter ended April 20, while analysts expected growth of 10.3%.
A refreshed loyalty program, more drive-thru lanes as well as new menu items such as its grilled steak have also kept demand steady at Cava.
In contrast, burrito chain Chipotle Mexican Grill (CMG.N), opens new tab lowered its annual sales target and said consumers were starting to reduce restaurant visits due to economic uncertainty.
Cava also has limited exposure to tariffs on products such as olives from Greece and some beef from Australia, while most other ingredients are sourced domestically. It imports, however, some packaging material from China.
CEO Brett Schulman told Reuters that the company has no plans to further raise prices as it is able to offset the tariff impact with better supply-chain management.
Cava raised its target of net new restaurants for the year to 64 to 68, from 62 to 66 earlier. The company opened 58 new restaurants last year.
Cava had advanced purchases for its kitchen equipment and store fixtures for these new outlets, so its capital expenditure wouldn't be impacted by the duties, Schulman added.
The Washington, D.C.-based company maintained its annual same-restaurant growth target of 6% to 8%, and profit margin of 24.8% to 25.2%.
It reported a quarterly profit margin of 25.1%, compared with 22.4% in the prior quarter.
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