Cava Beats Q1 Expectations, Analyst Names It A 'Top Pick' Amid Expansion Push

TD Cowen analyst Andrew M. Charles reiterates Cava Group CAVA with a Buy and maintains a $120 price forecast.

On Thursday, the company reported its quarterly earnings results, where the first-quarter revenue increased 28.2% year-over-year to $331.83 million, beating the consensus estimate of $326.88 million, according to Benzinga Pro.

The Mediterranean fast-casual restaurant chain company reported first-quarter adjusted earnings of 22 cents per share, beating analyst estimates of 14 cents per share. The company noted that net income included an income tax benefit of $10.7 million related to equity-based compensation.

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Charles views Cava Group, along with Dutch Bros Inc. BROS, as one of the most compelling names under coverage, highlighting solid first-quarter sales that met investor expectations.

The analyst noted that the company’s unique advantage from organic brand discovery and meaningful sales catalysts, sees potential upside to 2025 same-store sales and adjusted EBITDA guidance, maintains estimates, and a “Top Pick” rating.

Charles emphasized that organic brand discovery remains Cava Group’s most distinctive growth driver, contributing to a 7.5% traffic increase in first quarter, despite widespread declines across the restaurant industry.

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The analyst added that this momentum is supported by tangible sales catalysts such as 2025 menu innovation—featuring seasonal LTOs and a fall launch of chicken shawarma—operational enhancements to boost service speed, and a stronger loyalty program, which drove a 340 basis point increase in data-rich sales during Q1.

Charles remains optimistic about Cava Group’s long-term plan to scale to over 1,000 locations by the end of 2032, citing the brand's geographic flexibility.

With the Zoës Kitchen conversion now complete, the analyst sees sharper execution on digital growth, loyalty programs, catering, and menu innovation—fueled by a strong founder-led leadership team and strategic guidance from Chair Ron Shaich, positioning the company for continued outperformance in 2025.

Price Action: CAVA shares are trading lower by 1.6% to $97.42 at last check Friday.

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