CAVA’s entry into the Chicago market is going so well the fast casual may consider tweaking its growth strategy going forward.

The new unit opened in the Wicker Park neighborhood in April, and CFO Tricia Tolivar described the restaurant’s performance as “phenomenal.” She noted CAVA hasn’t changed its overall expectations of stores reaching $2.3 million AUV by year two, but added the brand is closely monitoring the progress of this particular location as well as other new restaurants.

After debuting in Illinois, the fast casual is now in 25 states and Washington, D.C., but there’s reason to believe that national presence could grow much wider—at a much quicker pace—in the future.

“If [Chicago’s performance] is an indication of what greenfield markets can give to CAVA, we’ll share more as we move on, but that could influence the approach as we move forward,” Tolivar said during the brand’s Q1 earnings call.

The Wicker Park location is urban-based, which makes up just 10 percent of CAVA’s pipeline. But the store isn’t office dependent—the fast casual never have been. Rather, the brand seeks more of a residential component when it seeks urban locales. CAVA has found it can obtain “a larger piece of a smaller historical pie” as it relates to building in cities now versus before COVID, according to CEO Brett Schulman.


CAVA Didn’t Become the Next Big Thing Overnight

CAVA’s Upcoming Restaurant Design Proves it Values the Dining Room

CAVA CEO: Restaurants Will Return to ‘Human-Based Hospitality’

The chief executive said the restaurant is “generating significant buzz” and showcases how well CAVA is doing in terms of amplifying the passion of existing guests and transforming new customers into regulars.

“The strength of new openings in general that we’ve seen, if that trend continues to persist and the growing awareness that we’ve seen in the past 18 months helps drive those unit openings, it gives us the optionality, as we go into late ’25 and ’26, to think about the weighting of our portfolio and our pipeline as we build it,” Schulman said. “And maybe potentially have a greater weighting on the greenfield side because we are seeing improved efficiency of the unit productivity out of the gate. So, we’ll continue to monitor the data and see how those trends unfold over the next year and help that inform whether we take advantage of that opportunity in our expansion plans.”

The restaurant is 3,100 square feet with digital order pickup and delivery, an expanded kitchen for centralized catering production, and a 30-seat dining room. That last point is particularly important as CAVA invests heavily in its interiors to attract in-store customers. Schulman believes the brand is in a position to attract the full-service guest who still wants a comfortable dining experience and the fast-food customer who doesn’t see as much of a difference in pricing anymore. He referenced a survey from LendingTree that found 78 percent of guests believe traditional fast food has become a luxury.

“What we haven’t done historically and what we don’t plan to do is get into discounting,” Schulman said. “We try and put the best everyday value proposition forward to our guests. The best quality of food, the best quality of service, the best value, and bang for the buck. And we’ll continue to do that and we’ll continue to lean into the activities and in our strategic plan to be able to deliver that to guests.”

What’s happening in Chicago is a microcosm of what CAVA is seeing nationwide, Schulman said. The chain’s same-store sales grew 2.3 percent in the first quarter, driven by a 3.5 percent increase in menu prices and product mix, partially offset by a 1.2 percent drop in traffic. On a two-year basis, comps rose 30.7 percent and traffic lifted 17.2 percent, trending upward from the 13 percent two-year jump in Q4.

AUV lifted to $2.6 million, up from $2.5 million in the year-ago period. The fast casual also added 14 net new restaurants and grew to 323 stores, good for 22.8 percent growth year-over-year. Adjusted EBITDA was $33.3 million, a $16.6 million increase compared to Q1 2023, and net income was $14 million, greater than all of 2023. Total company free cash flow was $4.7 million, the first quarter of positive free cash flow in CAVA’s history.

The chain is projecting same-store sales in the mid-to-high single digits for the rest of 2024, which should be fueled by a combination of traffic and mix. The brand took less than 3 percent price at the start of the year and doesn’t have plans to take any additional price. Additionally, unlike other quick-service concepts, CAVA hasn’t seen any real change in the behavior of lower-income consumers. The brand is banking on maintaining its momentum with the help of grilled steak, a new protein that should fuel the dinner daypart, which accounts for 46 percent of sales.

“At a time when consumers are increasingly discerning in how they spend their income, they are choosing to dine at CAVA,” Schulman said. “Our differentiated cuisine, where taste and health unite, and our compelling value proposition are resonating more than ever.”

The chain expects to open 50 to 54 net new stores in 2024 after onboarding 72 units in 2023. The long-term goal is to reach 1,000 locations by 2032. CAVA believes it will see at least 15 percent unit growth in 2024 and 2025.

A portion of that expansion will be stores with digital drive-thru lanes (digital mixed 37 percent in Q1). Thirty-eight are currently in the system, and they come with 10 to 15 percent higher AUVs and slightly higher restaurant-level margins. Tolivar said CAVA will keep adding them to the portfolio and that they will be an increasingly higher portion of mix. But the company isn’t chasing a specific target and will be “very opportunistic” on when to build them. The brand refuses to get into bidding wars with drive-thru powerhouses like Chick-fil-A or Raising Cane’s.

“As we define the next large-scale cultural cuisine category, we have a massive whitespace opportunity ahead of us,” Schulman said. “The passion for what we are building is clear, and, as is evidenced by the incredible results from this quarter, we are not just scaling a business, we are creating long-term value for our guests, team members, and shareholders.”

Fast Casual, Finance, Growth, Story, Cava