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Here's What to Expect From CAVA Group's (CAVA) Q4 Earnings

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CAVA Group, Inc. (CAVA - Free Report) is likely to have reported sequential earnings and total revenue decline when the company reports fiscal fourth-quarter 2023 results. The downtrend is quite likely to have been driven by lingering macroeconomic headwinds, restricted consumer spending and inflationary risks.

In the last reported quarter, earnings and revenues topped the Zacks Consensus Estimate by 700% and 2.5%, respectively. Moreover, sequentially earnings declined 71.4% but revenues grew 1.7%.

How Are Estimates Placed?

The Zacks Consensus Estimate for fiscal fourth-quarter 2023 earnings per share has increased to 1 cent from break-even earnings estimates over the past 30 days. In the last quarter, the company had reported earnings per share of 6 cents.

CAVA Group, Inc. Price and EPS Surprise

CAVA Group, Inc. Price and EPS Surprise

CAVA Group, Inc. price-eps-surprise | CAVA Group, Inc. Quote

The consensus mark for total revenues is pegged at $175.2 million, suggesting a sequential decline of 0.6% from the reported figure of $175.6 million.

Key Factors to Consider

For the to-be-reported quarter, CAVA revenues (99% of total revenues in the fiscal third quarter of 2023) are expected to have witnessed a sequential decline due to persisting consumer headwinds and ongoing macroeconomic issues.

Meanwhile, the bottom line of CAVA Group is likely to have witnessed a sequential decline. This was due to an increase in food, beverage, and packaging expenses along with labor inflation due to higher average hourly wages. Commodity inflation also adds to the downtrend.

Nonetheless, menu price increases and a favorable product mix are likely to have partially offset these negative aspects. These positive factors are likely to have driven the same restaurant sales growth of CAVA, resulting in sparked growth momentum. Also, new CAVA restaurant openings are likely to have supported the growth trend. The company’s focus on category-defining brands and highly differentiated product offerings is likely to have aided its growth prospects to some extent.

What the Zacks Model Unveils

Our proven model conclusively predicts an earnings beat for CAVA Group this time around. The company has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.

Earnings ESP: CAVA has an Earnings ESP of +50.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank of 2.

Other Stocks Poised to Beat on Earnings

Here are some other companies in the Zacks Retail-Wholesale sector, which according to our model, have the right combination of elements to post an earnings beat in the quarter to be reported.

Dave & Buster's Entertainment, Inc. (PLAY - Free Report) has an Earnings ESP of +4.39% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

PLAY’s earnings for the to-be-reported quarter are expected to increase 42.5%. Notably, the company reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 34.5%.

Jack in the Box Inc. (JACK - Free Report) has an Earnings ESP of +1.40% and a Zacks Rank of 3, at present.

JACK is expected to register a 3% decline in earnings for the to-be-reported quarter. The company reported better-than-expected earnings in three of the trailing four quarters and missed on the remaining occasion, the average surprise being 10.1%.

Domino's Pizza, Inc. (DPZ - Free Report) has an Earnings ESP of +1.07% and a Zacks Rank of 3.

DPZ’s earnings for the to-be-reported quarter are expected to decline 1.8%. The company reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 12.9%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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