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CAVA vs. SG: Which Mediterranean Fast-Casual Stock is Placed Better?
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Key Takeaways
CAVA posted 10.8% y/y Q1 same-restaurant sales growth, fueled by a 7.5% increase in guest traffic.
CAVA plans to open 64-68 restaurants in 2025, with new locations outperforming sales expectations.
SG saw a 3.1% y/y Q1 same-store sales drop, citing traffic softness and macroeconomic headwinds in key cities.
CAVA Group, Inc. (CAVA - Free Report) and Sweetgreen, Inc. (SG - Free Report) are both U.S.-based fast-casual restaurant chains that cater to health-conscious customers. Both are expanding quickly and compete directly in the growing market for healthy, premium, fast-casual dining. With ongoing market volatility, which stock currently offers better value and greater upside potential? Let us find out.
The Case for CAVA
CAVA continues to deliver strong performance, fueled by robust same-restaurant sales and strategic growth initiatives. In the first quarter of 2025, same-restaurant sales rose 10.8%, driven by a 7.5% increase in guest traffic. The company is seeing positive traffic trends across all dayparts, regions and income levels, with particularly strong performance in lower-income segments.
On a three-year stacked basis, same-restaurant sales moved up 41.5%, supported by a 24.7% gain in traffic. For the year, CAVA expects same-restaurant sales growth to be 6-8%.
CAVA is also expanding rapidly, opening 15 net new restaurants in the first quarter to bring its total to 382 locations. For fiscal 2025, the company plans to open 64-68 net new restaurants, up slightly from its previous target.
New locations are performing above expectations in terms of both sales and margins, with strong customer response in markets such as Indiana, Miami, and Lafayette, LA. The company remains committed to its long-term expansion strategy, targeting new markets like Detroit and Pittsburgh, and reaffirming its goal of operating at least 1,000 restaurants by 2032.
Another key growth driver for CAVA is its reimagined loyalty program, which has gained strong traction since its relaunch. Sales through the program have increased by 340 basis points as a share of total revenues, and membership is nearing 8 million. Limited-time promotions linked to new menu items, like the garlic ranch pita chips, have successfully boosted engagement and repeat visits. The company plans to introduce a tiered structure later this year to better align rewards with guest preferences and deepen long-term customer relationships.
However, high costs and economic uncertainty are concerning. The company continues to monitor consumer sentiment, tariffs and inflation but sees no signs of weakness in spending or demand.
The Case for Sweetgreen
Menu innovation continues to be a key growth driver for SG. The nationwide launch of Ripple Fries, which quickly became the brand’s most attached side item, boosted average check size and enhanced the guest experience.
Additionally, a strategic partnership with Michelin-starred COTE Korean Steakhouse introduced a Korean BBQ-inspired menu that has helped broaden the brand’s culinary appeal. These initiatives, paired with a consistent focus on clean, high-quality ingredients, are enhancing Sweetgreen’s positioning as a modern, elevated, fast-casual option.
Digital engagement and customer loyalty efforts are showing promising results. The revamped SG Rewards program is gaining traction, with 20,000 new digital members joining weekly. This initiative enables more personalized marketing and deeper consumer insights, which the company aims to use to drive long-term customer frequency and retention.
Infinite Kitchen locations, which feature automation for improved consistency and labor efficiency, are performing ahead of expectations and remain a core component of Sweetgreen’s scalable growth strategy.
Despite these gains, Sweetgreen is facing headwinds that have dampened short-term performance. Same-store sales declined 3.1% in the first quarter due to traffic and mix softness, and April sales trends turned negative amid macroeconomic uncertainty and weaker consumer sentiment.
Key markets like Los Angeles, New York and Boston saw notable slowdowns, led by operational inconsistencies and frequency gaps. Tariffs on China imports are adding cost pressure, raising build-out costs and impacting packaging and automation components. While management is confident in mitigation efforts, the broader environment remains challenging, leading to cautious guidance and expectations for flat same-store sales growth in 2025.
How Does Zacks Consensus Estimate Compare for CAVA & SG?
The Zacks Consensus Estimate for CAVA’s 2025 sales and EPS implies year-over-year increases of 24.2% and 38.1%, respectively. Earnings estimates for 2025 have witnessed upward revisions of 5.5% in the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SG 2025 sales and EPS implies year-over-year growth of 10.6% and 21.5%, respectively. However, the loss estimate for 2025 has widened to 62 cents from 60 cents in the past 60 days.
Image Source: Zacks Investment Research
Price Performance & Valuation
CAVA’s stock has declined 21.7% in the past year against its industry’s growth of 6.1%. Conversely, SG shares have plummeted 61% in the same time frame.
Image Source: Zacks Investment Research
CAVA is trading at a forward 12-month price-to-sales ratio of 6.57X, below its median of 10.91X last year. SG’s forward sales multiple sits at 1.76X, below its median of 4.49X over the same time frame.
Image Source: Zacks Investment Research
End Notes
Both CAVA and Sweetgreen are innovating and expanding within the fast-casual space, but CAVA appears to be in a slightly stronger position due to its consistent traffic growth, solid execution across new markets, and strong customer response to new product offerings and its loyalty program.
While Sweetgreen is also showing promise through menu innovation and digital engagement, it faces near-term challenges such as declining same-store sales, operational inconsistencies, and macroeconomic pressures affecting key urban markets.
CAVA, by contrast, is maintaining growth momentum and operational performance across a broader base, with less disruption from external headwinds, making it comparatively better positioned in the current environment.
Image: Shutterstock
CAVA vs. SG: Which Mediterranean Fast-Casual Stock is Placed Better?
Key Takeaways
CAVA Group, Inc. (CAVA - Free Report) and Sweetgreen, Inc. (SG - Free Report) are both U.S.-based fast-casual restaurant chains that cater to health-conscious customers. Both are expanding quickly and compete directly in the growing market for healthy, premium, fast-casual dining. With ongoing market volatility, which stock currently offers better value and greater upside potential? Let us find out.
The Case for CAVA
CAVA continues to deliver strong performance, fueled by robust same-restaurant sales and strategic growth initiatives. In the first quarter of 2025, same-restaurant sales rose 10.8%, driven by a 7.5% increase in guest traffic. The company is seeing positive traffic trends across all dayparts, regions and income levels, with particularly strong performance in lower-income segments.
On a three-year stacked basis, same-restaurant sales moved up 41.5%, supported by a 24.7% gain in traffic. For the year, CAVA expects same-restaurant sales growth to be 6-8%.
CAVA is also expanding rapidly, opening 15 net new restaurants in the first quarter to bring its total to 382 locations. For fiscal 2025, the company plans to open 64-68 net new restaurants, up slightly from its previous target.
New locations are performing above expectations in terms of both sales and margins, with strong customer response in markets such as Indiana, Miami, and Lafayette, LA. The company remains committed to its long-term expansion strategy, targeting new markets like Detroit and Pittsburgh, and reaffirming its goal of operating at least 1,000 restaurants by 2032.
Another key growth driver for CAVA is its reimagined loyalty program, which has gained strong traction since its relaunch. Sales through the program have increased by 340 basis points as a share of total revenues, and membership is nearing 8 million. Limited-time promotions linked to new menu items, like the garlic ranch pita chips, have successfully boosted engagement and repeat visits. The company plans to introduce a tiered structure later this year to better align rewards with guest preferences and deepen long-term customer relationships.
However, high costs and economic uncertainty are concerning. The company continues to monitor consumer sentiment, tariffs and inflation but sees no signs of weakness in spending or demand.
The Case for Sweetgreen
Menu innovation continues to be a key growth driver for SG. The nationwide launch of Ripple Fries, which quickly became the brand’s most attached side item, boosted average check size and enhanced the guest experience.
Additionally, a strategic partnership with Michelin-starred COTE Korean Steakhouse introduced a Korean BBQ-inspired menu that has helped broaden the brand’s culinary appeal. These initiatives, paired with a consistent focus on clean, high-quality ingredients, are enhancing Sweetgreen’s positioning as a modern, elevated, fast-casual option.
Digital engagement and customer loyalty efforts are showing promising results. The revamped SG Rewards program is gaining traction, with 20,000 new digital members joining weekly. This initiative enables more personalized marketing and deeper consumer insights, which the company aims to use to drive long-term customer frequency and retention.
Infinite Kitchen locations, which feature automation for improved consistency and labor efficiency, are performing ahead of expectations and remain a core component of Sweetgreen’s scalable growth strategy.
Despite these gains, Sweetgreen is facing headwinds that have dampened short-term performance. Same-store sales declined 3.1% in the first quarter due to traffic and mix softness, and April sales trends turned negative amid macroeconomic uncertainty and weaker consumer sentiment.
Key markets like Los Angeles, New York and Boston saw notable slowdowns, led by operational inconsistencies and frequency gaps. Tariffs on China imports are adding cost pressure, raising build-out costs and impacting packaging and automation components. While management is confident in mitigation efforts, the broader environment remains challenging, leading to cautious guidance and expectations for flat same-store sales growth in 2025.
How Does Zacks Consensus Estimate Compare for CAVA & SG?
The Zacks Consensus Estimate for CAVA’s 2025 sales and EPS implies year-over-year increases of 24.2% and 38.1%, respectively. Earnings estimates for 2025 have witnessed upward revisions of 5.5% in the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SG 2025 sales and EPS implies year-over-year growth of 10.6% and 21.5%, respectively. However, the loss estimate for 2025 has widened to 62 cents from 60 cents in the past 60 days.
Image Source: Zacks Investment Research
Price Performance & Valuation
CAVA’s stock has declined 21.7% in the past year against its industry’s growth of 6.1%. Conversely, SG shares have plummeted 61% in the same time frame.
Image Source: Zacks Investment Research
CAVA is trading at a forward 12-month price-to-sales ratio of 6.57X, below its median of 10.91X last year. SG’s forward sales multiple sits at 1.76X, below its median of 4.49X over the same time frame.
Image Source: Zacks Investment Research
End Notes
Both CAVA and Sweetgreen are innovating and expanding within the fast-casual space, but CAVA appears to be in a slightly stronger position due to its consistent traffic growth, solid execution across new markets, and strong customer response to new product offerings and its loyalty program.
While Sweetgreen is also showing promise through menu innovation and digital engagement, it faces near-term challenges such as declining same-store sales, operational inconsistencies, and macroeconomic pressures affecting key urban markets.
CAVA, by contrast, is maintaining growth momentum and operational performance across a broader base, with less disruption from external headwinds, making it comparatively better positioned in the current environment.
Both CAVA and SG carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.