By Kelly Cloonan

Cava Group logged a double-digit increase in sales in its latest quarter as traffic rose, with the company citing its value proposition as consumers continue to look for affordability.

The Mediterranean fast-casual restaurant chain said Tuesday it expects its momentum to continue, boosting its fiscal-year guidance.

Cava's revenue climbed 32%, to $438.3 million, in the first quarter. Analysts polled by FactSet had forecast $418.5 million.

Same-store sales--which account for restaurant openings and closings--rose 9.7%, compared with analyst expectations for 6% growth. The increase was driven mainly by traffic growth, and also boosted by menu price and product mix, the company said.

Chief Executive Brett Schulman said the results show Cava's value proposition is resonating, and that its business is structurally sound.

"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," Schulman said.

Restaurants have had a rough go lately as consumers, under pressure from inflation, remain on the hunt for value. Last year Cava and several of its fast-casual peers, including Chipotle Mexican Grill, pointed to weak demand among younger and lower-income consumers.

The conflict in the Middle East has added more pressure, with rising gasoline prices further squeezing consumers' budgets.

Players across the industry have looked to lure consumers with more affordable offerings. Earlier this month, McDonald's reported better-than-expected sales and profits as it heavily promotes its value meals. Shake Shack, meanwhile, swung to a first-quarter loss, dragged down by additional investments intended to drive traffic while consumers spend frugally at restaurants.

Cava's first-quarter profit came in at $23.6 million, or 20 cents a share, compared with $25.7 million, or 22 cents a share, a year earlier. Analysts expected 17 cents a share.

The decrease in net income was due to a lower tax benefit associated with equity-based compensation resulting in a higher effective tax rate, and higher depreciation and amortization, the company said.

Cava opened 20 net new restaurants during the quarter, including new market entries across the Midwest in Columbus, Ohio; Cincinnati; and St. Louis, it said.

The company now forecasts same-restaurant sales growth of 4.5% to 6.5% for the fiscal year, up from its prior guidance of 3% to 5%.

Cava also increased its fiscal-year profit guidance, projecting adjusted earnings before interest, taxes, depreciation and amortization of $181 million to $191 million, compared with a prior range of $176 million to $184 million.

Write to Kelly Cloonan at kelly.cloonan@wsj.com

(END) Dow Jones Newswires

May 19, 2026 16:11 ET (20:11 GMT)

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