CAVA (CAVA, Financial) reported an impressive first quarter with revenues totaling $328.5 million, slightly exceeding market expectations of $327.71 million. The company demonstrated a significant same restaurant sales increase of 10.8%, bolstered by a 7.5% rise in guest traffic. Despite facing economic headwinds and adverse weather conditions, CAVA's performance highlights the brand's robust market presence.
The company undertook strategic expansion efforts by opening 15 new locations, including its first entry into Indiana, now operating in 26 states plus the District of Columbia. Significantly, CAVA has achieved over a billion dollars in revenue on a trailing twelve-month basis, underscoring its leadership in the Mediterranean cuisine sector.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 15 analysts, the average target price for Cava Group Inc (CAVA, Financial) is $114.68 with a high estimate of $175.00 and a low estimate of $90.00. The average target implies an upside of 15.77% from the current price of $99.06. More detailed estimate data can be found on the Cava Group Inc (CAVA) Forecast page.
Based on the consensus recommendation from 19 brokerage firms, Cava Group Inc's (CAVA, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
CAVA Key Business Developments
Release Date: February 25, 2025
- Revenue: Fourth quarter 2024 revenue grew 36.8% year over year to $225.1 million.
- Same-Restaurant Sales Growth: Increased by 21.2%, driven by a 15.6% increase in traffic.
- Net New Restaurant Openings: 15 net new restaurants opened in Q4, ending the year with 367 locations.
- Adjusted EBITDA: $25.1 million, a 60% increase over Q4 2023.
- Net Income: $78.6 million for Q4 2024.
- Adjusted Net Income: $6.5 million, a 216% increase over Q4 2023.
- Annual Revenue Growth: Full year 2024 revenue increased by 35%.
- Annual Same-Restaurant Sales Growth: 13.4% for the full year 2024.
- Annual Net New Restaurant Openings: 58 net new restaurants for the full year 2024.
- Annual Adjusted EBITDA: $126.2 million, a 71% increase over 2023.
- Annual Net Income: $130.3 million for the full year 2024.
- Annual Adjusted Net Income: $50.2 million, a 278% increase over 2023.
- Free Cash Flow: $52.9 million generated during 2024.
- Average Unit Volume (AUV): Increased from $2.6 million at the end of 2023 to $2.9 million at the end of 2024.
- Restaurant Level Profit Margin: Increased by 50 basis points to 22.4% of revenue in Q4 2024.
- Cash on Hand: $366.1 million at the end of Q4 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cava Group Inc (CAVA, Financial) reported a 36.8% increase in revenue for Q4 2024, excluding the 53rd week in 2023.
- The company achieved a 21.2% same-restaurant sales growth, driven by a 15.6% increase in traffic.
- Cava Group Inc (CAVA) opened 15 net new restaurants in Q4, ending the year with 367 locations, marking an 18.8% increase year over year.
- Adjusted EBITDA for Q4 2024 was $25.1 million, a 60% increase over the same period in 2023.
- The company reported a net income of $78.6 million and adjusted net income of $6.5 million, a 216% increase over Q4 2023.
Negative Points
- Food, beverage, and packaging costs increased by 110 basis points due to the national rollout of steak.
- Labor and related costs decreased by only 50 basis points, reflecting wage investments that were not offset by menu price increases.
- Cava Group Inc (CAVA) anticipates a 100 basis point impact on food costs due to the steak launch, expected to roll off by summer 2025.
- The company expects stock-based compensation to increase to between $20 million and $22 million in 2025.
- Cava Group Inc (CAVA) plans to make continued investments in team member wages, which may impact margins.
