In This Article:
CAVA Group, Inc. CAVA has emerged as a standout success story since its 2023 IPO, cementing its position as one of the industry's top-performing stocks. In 2024, the company delivered a jaw-dropping performance, with its stock skyrocketing 172.3% year to date, leaving the broader market in the dust. For perspective, CAVA not only eclipsed the industry’s modest 2.5% rise but also outpaced the S&P 500’s solid 24% growth.
CAVA has emerged as a leader in the growing Mediterranean cuisine category, capitalizing on its unique value proposition to appeal to a wide audience. This success highlights CAVA's ability to reshape dining trends and position Mediterranean cuisine as a significant force in the restaurant industry.
CAVA’s focus on culinary innovation has been a critical differentiator. Successful product launches, such as Garlic Ranch Pita Chips and steak options, have driven incremental sales and enhanced customer engagement. Management’s innovation pipeline across menu categories promises to maintain excitement and repeat visits.
The company’s disciplined expansion strategy has been a major growth driver. CAVA plans to achieve at least 17% unit growth in 2025, supported by its robust restaurant pipeline. The latest market entries, such as South Florida and additional Midwest regions, will complement its established and growing markets. Notably, restaurant openings continue to exceed expectations, reinforcing the brand's scalability and broad appeal.
Apart from CAVA, El Pollo Loco Holdings, Inc. LOCO and Kura Sushi USA, Inc. KRUS have the potential to outperform in 2025.
Image Source: Zacks Investment Research
2 Restaurant Stocks Likely to Tread on CAVA Path
Here are two Restaurant stocks that are poised to grow in 2025 and carry a favorable Zacks Rank. Plans outlined by these companies suggest that there is more room for the stocks to gain.
El Pollo Loco: The company is benefiting from increased system-wide comparable restaurant sales. In the fiscal third quarter of 2024, LOCO reported a 2.7% rise in system-wide comparable restaurant sales, attributed to new menu offerings and targeted promotions. El Pollo Loco is taking cost-saving measures, ensuring that food quality and customer experience are enhanced throughout the process. The company made strategic hires, including a chief development officer, to streamline operations and reduce unit build costs. These efforts are expected to improve franchise growth and financial performance in the coming years.
LOCO currently flaunts a Zacks Rank #1. The company’s fiscal 2025 earnings are anticipated to improve 12.9% year over year. In the past 60 days, the consensus mark for 2025 earnings has been revised upward by 4.5%. The company’s 2025 sales are likely to grow 3.5% year over year. Year to date, the company’s shares have gained 32.5%.