CAVA Group Inc (NYSE:CAVA) stock fell 5.74% (As on May 16, 11:22:36 AM UTC-4, Source: Google Finance) though the company posted better than expected results for the first quarter of FY25, helped by robust demand for its Mediterranean cuisine despite a broader slowdown in dining out across the United States. Cava also maintained its annual forecasts for same-store sales growth and margin at a time when companies are withdrawing or cutting their outlooks as President Donald Trump’s shifting trade policy fuels economic uncertainty. The company has been able to temper its price hikes amid fast-food chains raising menu prices significantly over the last few years, increasing consumers’ appetite for Cava’s fast-casual outlets.

Further, a refreshed loyalty program, more drive-thru lanes as well as new menu items such as its grilled steak have also kept demand steady at Cava. In contrast, burrito chain Chipotle Mexican Grill lowered its annual sales target and said consumers were starting to reduce restaurant visits due to economic uncertainty. Cava also has limited exposure to tariffs on products such as olives from Greece and some beef from Australia, while most other ingredients are sourced domestically. It imports, however, some packaging material from China. Cava had advanced purchases for its kitchen equipment and store fixtures for these new outlets, so its capital expenditure wouldn’t be impacted by the duties.

CAVA in the first quarter of FY25 has reported the adjusted earnings per share of 22 cents, beating the analysts’ estimates for the adjusted earnings per share of 14 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 28.2 percent to $331.83 million in the first quarter of FY25, beating the analysts’ estimates for revenue by 0.36%. Cava’s same-store sales grew 10.8% in the quarter ended April 20, while analysts expected growth of 10.3%. It reported a quarterly profit margin of 25.1%, compared with 22.4% in the prior quarter. CAVA Restaurant-Level Profitof $82.3 million or growth of 27.4% over the prior year quarter, withCAVA Restaurant-Level Profit Marginof 25.1%. CAVA Digital Revenue Mixwas 38.0%. Net cash provided by operating activities of $38.6 million with Free Cash Flow1of $2.7 million.

Cava raised its target of net new restaurants for the year to 64 to 68, from 62 to 66 earlier. The company opened 58 new restaurants last year. The Washington, D.C.-based company maintained its annual same-restaurant growth target of 6% to 8%, and profit margin of 24.8% to 25.2%.