CAVA is raising its full-year outlook as traffic growth drives an earnings beat

First-quarter revenue of $438.3 million represented a 32.2% year-over-year increase and cleared the analyst consensus of $418.5 million, according to The Wall Street Journal. Of the 9.7% same-restaurant sales gain, 6.8 percentage points came from increased guest traffic while the remaining 2.9 percentage points reflected menu price and product mix.

Earnings were $23.6 million, down from $25.7 million a year earlier. Earnings per share fell to $0.20 from $0.22 on a diluted basis. The company said a smaller tax benefit from equity-based compensation raised the effective tax rate, and higher depreciation and amortization also affected profits. Analysts had expected $0.17 per share, according to The Wall Street Journal.

Adjusted EBITDA rose 37.6% to $61.7 million, according to the company. The restaurant-level profit margin stayed at 25.1%, the same as last year. Higher sales volumes helped offset the impact of more third-party delivery orders and higher wage costs.

The quarter ended with 459 total locations after 20 net new openings, a count that is 20.2% higher than a year ago and includes new Midwest entries in Cincinnati, St. Louis, and Columbus.

Looking ahead to the full fiscal year, the company lifted its comparable-sales outlook by two percentage points at both ends, to a 4.5%-to-6.5% range. Adjusted EBITDA expectations moved up as well, with the new band of $181.0 million to $191.0 million replacing a prior forecast of $176.0 million to $184.0 million. The planned unit count also edged higher, with net new openings now targeted at 75 to 77 versus the previous guidance of 74 to 76.

Co-Founder and CEO Brett Schulman attributed the results to the brand's value proposition in a difficult consumer environment. "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," 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."

On an analyst call, CFO Tricia Tolivar noted that sales through the early weeks of the second quarter are running ahead of the company's revised annual guidance, according to Bloomberg.