In a striking display of resilience amid industry headwinds, CAVA Group’s recent financial performance has showcased the Mediterranean fast-casual restaurant chain’s robust business model and strategic positioning in the competitive dining landscape.

The company reported an impressive 28.2% revenue growth in Q1 2025, reaching $328.5 million compared to $256.3 million in the same period last year, according to Verdict Food Service. This growth significantly outpaced analyst expectations, with actual earnings per share of $0.22 dwarfing the forecasted $0.02, as reported by Investing.com.

“We’re really excited about the strength of the business, in spite of all the challenges that we’ve seen in the industry in the first quarter,” CAVA co-founder and CEO Brett Schulman told CNBC’s “Squawk Box” during a recent interview.

When questioned about market reactions to the company’s guidance, Schulman emphasized the importance of taking a longer-term view. “You want to look at it on a three-year basis. Given the dynamic growth of our business over the last three years… we actually grew over 41% in the quarter. And so we guided to moderate in the high 30s for the remainder of the year.”

Consumer Spending and Tariff Impact

Despite widespread concerns about consumer spending pullbacks, CAVA has seen continued strong demand, with same-store sales increasing by 10.8%, driven by a remarkable 7.5% increase in customer traffic. The company’s strategic pricing approach appears to be resonating with consumers.

“We’ve underpriced inflation by 800 basis points over the last few years, when many brands have taken almost double CPI in price, really to be able to make our food accessible even when they’re feeling those pressures around them,” Schulman explained.

When asked about potential tariff impacts, Schulman revealed a relatively insulated position: “We’re a bit fortunate because we source most of our ingredients domestically, and then we have a lot of our produce that’s covered under USMCA.” He noted minimal exposure through imported items like olive oil and kalamata olives from Greece, and hormone-antibiotic free beef from Australia, estimating the tariff impact at only “20 to 40 basis points” in their guidance.

Technology and Human Connection

Perhaps most intriguing is CAVA’s balanced approach to technology integration. While many restaurant chains have pivoted heavily toward automation to combat rising labor costs, CAVA sees technology as complementary to human interaction rather than a replacement.

“We want to use technology and automation to enhance the human experience, not replace it,” Schulman emphasized. The company is exploring cutting-edge solutions, including “testing generative AI and camera vision over the serving line that cross-references historical sales data, weather data, event data, and then projects to our grill cook how much chicken to be cooking in increments.”

This technological innovation comes alongside what Schulman calls “Project Soul”—investments in dining room experiences based on the belief that “the demise of the dining room is greatly exaggerated.”

“As screens and technology and automation infiltrate everyday life… it’s disintermediating that human connection. And we see guests want to find reasons and places to stay,” Schulman observed.

Despite the significant investment in human capital—with hourly wages approaching $20 per hour—the company has maintained strong profitability, with restaurant-level profit increasing 27.4% to $82.3 million and a profit margin of 25.1%, according to Verdict Food Service.

CAVA’s expansion strategy also continues at pace, with 15 new restaurants opened in the quarter, bringing the total to 382 locations, including entry into new markets in Indiana and Miami, as noted by Investing.com.

While CAVA stock experienced a 4.4% decline in after-hours trading following the earnings announcement, the company’s fundamentals appear strong with a healthy current ratio of 2.97, indicating robust liquidity to support continued expansion plans.