CAVA Group Set to Release Q1 2025 Results Amid Cost Pressures

Rockville, MD — CAVA Group, Inc. is scheduled to release its first-quarter 2025 financial results on May 15, 2025. Analysts anticipate an earnings per share (EPS) of 14 cents, reflecting a 16.7% increase compared to the same quarter last year when earnings were reported at 12 cents.

The Zacks Consensus Estimate for first-quarter revenues stands at $330.6 million, signaling a growth of 27.7% from the previous year’s figures. CAVA has demonstrated a solid history of earnings surprises, exceeding estimates in three out of the last four quarters. The average earnings surprise across these quarters has been approximately 62.6%.

However, current indicators suggest that CAVA may face challenges this quarter. According to Zacks, the company has an Earnings ESP of -2.00% and a Zacks Rank of #4, indicating a ‘Sell’ recommendation.

Despite these challenges, there are factors expected to positively influence CAVA’s performance. The company has seen strong momentum in customer traffic, focusing on expanding its locations and enhancing both digital and in-restaurant experiences. CAVA’s management anticipates that sales growth will be highest in the first quarter before moderating later in the year, aligning with its forecast of 6-8% growth for the full year.

The company’s loyalty program has played a crucial role in increasing customer engagement and sales, particularly among less frequent diners. CAVA’s recent menu innovations, like garlic ranch pita chips and other seasonal items, have also contributed to this momentum.

Nonetheless, CAVA faces potential headwinds from heightened input costs. Expenses for food and packaging, notably due to adding steak as a core menu item, could impact profit margins. Labor costs have also risen in compliance with legislative changes, such as California’s AB 1228.

CAVA Group’s stock has underperformed in recent months, dropping 23.9% compared to a 7.1% decline in the broader restaurant sector, and a 4.3% dip in the S&P 500. The stock is currently trading at a price-to-sales ratio of 8.96X, significantly higher than the industry average of 4.07X.

Looking ahead, CAVA continues to focus on capitalizing on the growing demand for Mediterranean cuisine while seeking to maintain efficient operations. Despite the strategic investments in growth and innovation, rising costs pose substantial concerns for future profitability. Analysts suggest investors may want to proceed cautiously until clearer signs of margin recovery appear.