Core Insights - CAVA Group, Inc. is implementing a modest 1.7% menu price increase at the start of 2025, reflecting a cautious pricing strategy amid ongoing inflationary pressures in the restaurant industry [1][10] - In Q1 of fiscal 2025, food, beverage, and packaging costs accounted for 29.3% of revenues, an increase of 110 basis points year-over-year, primarily due to the introduction of grilled steak [2][10] - CAVA is managing its supply chain effectively, with limited exposure to tariff-related disruptions, as most ingredients are domestically sourced or secured under existing contracts [3] - The company has raised menu prices by approximately 15% from 2019 to 2024, which is significantly lower than the 23% increase in the Consumer Price Index (CPI) and the 30% increase in the broader fast-food segment [4] - Despite cost pressures, CAVA is optimistic about protecting restaurant-level margins through operational efficiency and strong sales leverage, with no additional price increases planned for the remainder of the year [5] Comparisons With Peers - Shake Shack Inc. has increased in-Shack menu prices by 2% year-over-year while focusing on operational efficiency and supply chain productivity to improve profitability [6] - Cracker Barrel Old Country Store, Inc. executed a 4.9% menu price increase in Q3 of fiscal 2025, combining carryover and new pricing strategies to offset cost pressures [7] Stock Performance and Valuation - CAVA's shares have decreased by 16.6% over the past three months, compared to a 2.3% decline in the industry [8] - CAVA trades at a forward price-to-sales ratio of 6.60X, which is significantly higher than the industry's 4.00X [12] - The Zacks Consensus Estimate for CAVA's earnings in 2025 and 2026 indicates a year-over-year increase of 38.1% and 17.7%, respectively, with the 2025 estimate showing positive revisions in the past 60 days [15]