CAVA Group Earnings on Deck With Stock Down 13% YTD – What To Expect From Here

CAVA is poised to release its first-quarter 2025 financial results after the closing bell, with a conference call scheduled for 5:00 PM Eastern Time. Analysts are looking for earnings per share (EPS) of $0.15, reflecting a 16.7% year-over-year increase, while revenue is expected to reach $327.71 million, up more than 25% from Q1 2024.

CAVA’s historical outperformance, beating on top and bottom lines in each of the past four quarters, has fueled optimism, though concerns over wage inflation and input costs linger.

CAVA's stock price (NYSE: CAVA) has taken a step back this year, with a YTD decline of 13.4% leading into the print a far cry from the 160% gain seen through 2024. Whilst the stock is trading more than 30% below 2025 highs, the rally that has taken place since March 13 lows has now extended to 34%.

Despite solid revenue growth, CAVA faces mounting cost pressures. Wage inflation, driven by regulatory changes like California’s AB 1228, and rising commodity prices, particularly wheat and olive oil (up 18% YTD) are squeezing margins. Q1 2025 gross margin is projected at 27.1%, down 130 basis points year-over-year.

Looking to the previous quarter for clues, CAVA reported EPS of $0.66, surpassing the $0.06 consensus estimate by 10x, as revenue of $227.4 million was also up on the $223.34 million expected. Compared to the September 2024 report however, revenue declined from $243.82 million.

While management has emphasised resilience and operational discipline, sustained same-store sales growth and margin recovery are critical to justifying the company’s premium valuation.

Fiscal 2024 revenue grew 35.1% to $954 million, supported by 58 new restaurant openings and a 13.4% same-store sales increase. CAVA also raised its 2025 adjusted EBITDA guidance to $100–$105 million, up from $86–$92 million, reflecting confidence in unit economics and demand stability.

Looking to the street, and analyst sentiment remains mixed. Piper Sandler’s March 2025 upgrade to “Overweight” cited CAVA’s “pivotal positioning in the fast-casual sector,” while Bernstein raised its target to $115, emphasising long-term scalability. On the other hand, Barclays downgraded CAVA to “Hold” with a $90 target, citing valuation concerns.

The average 12-month price target stands at $114.30, implying a 14% upside from current price action, though post-earnings adjustments are likely.

CAVA’s ambitious expansion plans and brand momentum position it as a standout in the fast-casual landscape. However, the company’s lofty valuation, margin headwinds, and sensitivity to macroeconomic shifts underscore the need for careful investor scrutiny. The upcoming Q1 earnings call will be a crucial inflection point, with particular focus on same-store sales, margin trends, and the effectiveness of loyalty and digital strategies.