Latest news with #SaraSenatore
Axios
2 days ago
- Business
- Axios
Fast-casual restaurants face a slowdown
Fast-casual restaurants are suddenly immersed in a sales slowdown as consumers — especially cash-strapped Gen Zers — grow wary of the economy and become more price sensitive. Why it matters: The fast-food industry had already taken a turn for the worse as low-income consumers shy away — but fast-casual restaurants typically have more insulation from a downturn because they target higher-income customers. "Greater pressure on lower income consumers" is hurting the entire restaurant industry, according to Bank of America analyst Sara Senatore. The fast-casual fallout is widespread: Sweetgreen's same-store sales plunged 7.2% in its most recent quarter. Chipotle reported a 4% decline. Cava — which is still growing rapidly via new locations — reported a huge slowdown in same-store sales growth to 2.1% in its most recent quarter from 10.8% the previous quarter. Its stock tumbled 16% Wednesday morning. Wingstop posted a 1.9% decline in U.S. same-store sales. What they're saying: "It's a cause for concern because traffic declines have been the main contributor to these results, raising questions on the consumer environment," Alex Fascino, equity analyst at CFRA Research, tells Axios. State of play: A big reason for the "softening state of fast casual in recent months" is that Gen Z consumers are facing rising unemployment and a reduction in discretionary income, according to TD Cowen analyst Andrew Charles. Charles pointed to the recent resumption of federal student loan payments as a driving force in reduced restaurant spending among Gen Z. Of all the major fast-casual and fast-food chains, Cava and Sweetgreen rely the most on 18-to-24-year-old consumers, deriving 19% and 18% of their business, respectively, from that demographic, according to TD Cowen. Wingstop relies the fourth most on that group of consumers, getting 16% of its sales from them. "Pressure on consumer spending for many of our consumers has persisted longer than we expected," Sweetgreen CEO Jonathan Neman told investors on an earnings call last week. "I think it's pretty obvious that the consumer is not in a great place overall." "We're operating in a fluid macroeconomic environment, and it's one that sort of creates a fog for consumers where things are changing constantly," Cava CFO Tricia Tolivar said Tuesday on an earnings call. "During those times, they tend to step off the gas." The intrigue: Ordinarily, a slowdown in fast casual would lead to an uptick in fast food as consumers trade down — but "our most recent franchisee checks suggest this does not appear to be the case," Charles said. Same-store sales in the most recent quarter declined 3.6% at Wendy's, 5% at KFC and 0.9% at Popeyes. McDonald's posted 2.5% growth, but needed a huge marketing campaign, $5 value meal and new products like chicken strips to get there. "Visits across the industry by low-income consumers once again declined by double digits versus the prior year period," CEO Christopher Kempczinski said last week on an earnings call. Reality check: The accumulation of price increases over the last few years may finally be exerting pressure on restaurant sales. Campbell's CEO Mick Beekhuizen said in June that '"consumers are cooking at home at the highest levels since early 2020."
Yahoo
01-08-2025
- Business
- Yahoo
BofA Affirms Buy on Wingstop (WING), Cites Strong Growth and Brand Loyalty
Wingstop Inc. (NASDAQ:WING) is one of the high growth stocks outside tech analysts are bullish on. On July 18, Bank of America analyst Sara Senatore lowered the firm's price target on Wingstop Inc. (NASDAQ:WING) from $430 to $420 while maintaining a Buy rating on the stock. At the current market price of $289.80, the revised target implies a potential upside of approximately 45%. The change in price target comes as part of a broader adjustment by BofA, which is updating estimates and valuation multiples for over 20 restaurant stocks ahead of earnings season. While the reduction in Wingstop's target is modest, it reflects shifts in both sector expectations and general market conditions rather than a negative view of the company's fundamentals. Despite the slight trim in target price, Wingstop remains one of the firm's top picks in the restaurant space. Investors continue to view it favorably due to its consistent same-store sales growth, digital ordering strength, and strong brand loyalty. Additionally, Wingstop's asset-light business model, based on franchising, offers steady margins and scalability with relatively low capital risk. As the earnings season approaches, analysts will be closely watching for updates on international expansion, pricing power, and how the company is navigating cost pressures. Wingstop is a fast-casual restaurant chain focused on chicken wings, primarily operating through a franchise model. While we acknowledge the potential of WING as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and . Disclosure: None.
Yahoo
23-05-2025
- Business
- Yahoo
BofA Reiterates a Buy Rating on Cava Group (CAVA), Lifts PT
On May 19, analyst Sara Senatore of Bank of America Securities reiterated a Buy rating on CAVA Group, Inc. (NYSE:CAVA) and raised the price target to $121 from $112. The analyst gave the buy rating based on CAVA Group, Inc.'s (NYSE:CAVA) growth potential and strong fiscal Q1 2025 results, which surpassed expectations on May 15. A close-up image of a colorful salad platter with toppings and dressings. The company underwent a 10.8% growth in same-restaurant sales in the quarter, driven by higher customer traffic. It also opened 15 net new restaurants. CAVA Group, Inc. (NYSE:CAVA) attained this growth despite external challenges, including Los Angeles fires and adverse weather conditions. This reflects the company's effective management strategies and resilience, supporting the Buy rating. The analyst expects the company to sustain its positive momentum in the coming quarters, supported by strategic initiatives such as successful advertising campaigns and menu innovations. Another cause of the positive outlook for CAVA Group, Inc. (NYSE:CAVA) for the analyst is the company's ability to manage operating costs and labor effectively, even while investing in employee and store development. While we acknowledge the potential of CAVA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CAVA and that has 100x upside potential, check out our report about the . READ NEXT: and . Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
22-05-2025
- Business
- Yahoo
BofA Reiterates a Buy Rating on Cava Group (CAVA), Lifts PT
On May 19, analyst Sara Senatore of Bank of America Securities reiterated a Buy rating on CAVA Group, Inc. (NYSE:CAVA) and raised the price target to $121 from $112. The analyst gave the buy rating based on CAVA Group, Inc.'s (NYSE:CAVA) growth potential and strong fiscal Q1 2025 results, which surpassed expectations on May 15. A close-up image of a colorful salad platter with toppings and dressings. The company underwent a 10.8% growth in same-restaurant sales in the quarter, driven by higher customer traffic. It also opened 15 net new restaurants. CAVA Group, Inc. (NYSE:CAVA) attained this growth despite external challenges, including Los Angeles fires and adverse weather conditions. This reflects the company's effective management strategies and resilience, supporting the Buy rating. The analyst expects the company to sustain its positive momentum in the coming quarters, supported by strategic initiatives such as successful advertising campaigns and menu innovations. Another cause of the positive outlook for CAVA Group, Inc. (NYSE:CAVA) for the analyst is the company's ability to manage operating costs and labor effectively, even while investing in employee and store development. While we acknowledge the potential of CAVA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CAVA and that has 100x upside potential, check out our report about the . READ NEXT: and . Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
19-05-2025
- Business
- Yahoo
CAVA's Traffic-Driven Growth, Price Discipline Is Better Than Broader Market: Analyst
B Of A Securities analyst Sara Senatore increased the price forecast for CAVA Group, Inc. (NYSE:CAVA) from $112 to $121 while reiterating a Buy rating. On Friday, CAVA's first-quarter revenue increased 28.2% year-over-year to $331.83 million, beating the consensus estimate of $326.88 million, and adjusted EPS of 22 cents, beating analyst estimates of 14 cents. CAVA expects full-year same-restaurant sales (SSS) growth to be between 6% and 8%, unchanged from prior analyst notes that first-quarter 2025 SSS growth of 10.8% modestly exceeded BofA's estimate of 9.7% and the Visible Alpha consensus of 10.4%. This makes it particularly noteworthy due to its traffic-driven nature (+7.5%) as CAVA maintained pricing discipline (~1.7% compared to the broader food-away-from-home Consumer Price Index (FAFH CPI) of 3.6%), adds the analyst. Considering the headwinds from weather and LA fires, the analyst estimates the implied 3-year stacked SSS growth was 3-5+ percentage points ahead of CAVA's high-30s guidance (reported additive stack was ~+41.5%, including weather impact). The analyst believes CAVA's FY25 SSS guidance is likely conservative, citing the strong performance of recent menu innovations and advertising, along with upcoming catalysts such as menu news (chicken shawarma testing in Dallas, Texas and Western Florida) and the loyalty program. The analyst maintained the FY25 SSS growth estimate at 7.4%, with stronger traffic growth (+5.2% versus +3.5% previously) offset by a lower mix (+0.5% versus +1.8% previously). Senatore estimates FY25 Restaurant Level Margin (RLM) of 25.3% and has raised pre-opening costs estimates to $15.2 million from $13.3 million previously, reflecting the new guidance for faster unit growth. As a result, the analyst revised FY25 EPS estimates to 58 cents from 61 cents previously. Last week, TD Cowen analyst Andrew M. Charles reiterated a Buy rating and maintained a $120 price forecast on the stock. He noted the company's unique advantage from organic brand discovery and meaningful sales catalysts. He sees potential upside to 2025 SSS and adjusted EBITDA guidance, maintains estimates, and a 'Top Pick' rating. Price Action: CAVA shares are trading lower by 4.65% to $92.30 at last check Monday. Image by Nicole Glass Photography via Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? This article CAVA's Traffic-Driven Growth, Price Discipline Is Better Than Broader Market: Analyst originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
