CAVA (NYSE:CAVA) shares were set to open more than 10% higher at about $87 on Wednesday after the Mediterranean restaurant chain reported first quarter results that topped Wall Street expectations and raised its full-year outlook.
The company reported revenue of $438.3 million for the quarter, exceeding analyst estimates of $418.5 million.
Earnings came in at $0.20 per share, ahead of consensus expectations of $0.17 per share.
The restaurant chain opened 20 net new locations during the quarter, bringing its total restaurant count to 459, up 20.2% from a year earlier.
Same-restaurant sales increased 9.7%, well above analyst expectations of 6.2%, driven in part by guest traffic growth of 6.8%.
Average unit volume rose to $3 million from $2.9 million in the prior-year quarter.
Restaurant-level profit increased 32.3% year over year to $108.9 million, while restaurant-level profit margin came in at 25.1%. Digital sales accounted for 39.9% of revenue during the quarter.
Net income totaled $23.6 million, while adjusted EBITDA rose 37.6% to $61.7 million, ahead of analyst expectations of about $57 million. The company reported year-to-date operating cash flow of $64.1 million and free cash flow of $15.5 million.
“Amid today's broader macroeconomic environment and geopolitical uncertainty, our first quarter results reflect our position as a clear industry leader and our ability to meet the moment for the modern consumer," CAVA CEO Brett Schulman said in a statement.
“These results, which include the lap of strong prior year comparisons, speak to the structural strength of our business, the resonance of our compelling value proposition, and our position as the dominant leader in Mediterranean – all of which fuel our confidence to sustain this momentum going forward."
Alongside the quarterly results, CAVA raised portions of its fiscal 2026 outlook. The company now expects same-restaurant sales growth of 4.5% to 6.5%, up from its prior forecast of 3% to 5%.
Adjusted EBITDA guidance was increased to a range of $181 million to $191 million, compared with previous guidance of $176 million to $184 million.
CAVA also slightly raised its expected number of net new restaurant openings to 75 to 77 locations, from its earlier forecast of 74 to 76.
The company updated its restaurant-level profit margin guidance to 23.7% to 24.3%, compared with its prior range of 23.7% to 24.2%. Pre-opening cost guidance was also raised to between $22 million and $22.5 million.
Following the results, Jefferies reiterated its ‘Buy’ rating on CAVA and raised its price target to $95 from $85.
Jefferies wrote that the quarter demonstrated “on-trend brand and team layering drivers in place to continue,” highlighting the stronger-than-expected same-store sales growth and continued momentum into the second quarter.
The firm noted that Q2 same-store sales trends are tracking at levels similar to the first quarter and above the company’s updated full-year guidance range, which Jefferies described as conservative.
The analysts also pointed to resilient consumer demand despite broader industry softness, writing that CAVA saw growth across all income cohorts, led by lower-income consumers. Jefferies cited factors including relative value pricing, operational initiatives, digital engagement, loyalty efforts, and menu innovation, including the recent launch of salmon, as supporting demand trends.
Jefferies raised its second-quarter same-store sales forecast to 8% from 4% and now models 6.8% growth for fiscal 2026.
The firm also noted that recent restaurant openings in newer markets such as Cincinnati, St. Louis, and Columbus, Ohio, are performing above internal productivity targets and supporting margins.