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Research Alert: Cava: Q1 Beats Estimates; Same-store Sales And Ebitda Guidance Raised

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

CAVA delivered a clean beat-and-raise quarter, with revenue growing 32.2% to $434M vs. $416M consensus and same-store sales (SSS) of 9.7% vs. 6.1% estimated, while Q1 EPS of $0.20 beat the $0.17 consensus. The company added 20 net new openings to 459 total restaurants (+20% Y/Y), with restaurant-level margins holding flat at 25.1% despite headwinds. Traffic growth of 6.8% drove the majority of SSS, with only 2.9% from price/mix, suggesting genuine demand strength, while new Midwest markets are exceeding performance expectations. Management lifted full-year SSS guidance to 4.5%-6.5% from 3.0%-5.0%, net openings to 75-77 from 74-76, and adjusted EBITDA to $181M-$191M from $176M-$184M. The guidance raise should support the premium multiple and drive modest estimate revisions higher. However, we believe the stock trades at a significant premium that assumes continued flawless execution on both unit growth and comparable sales, leaving limited room for error in our view.

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