Cava, a popular Mediterranean restaurant chain, recently announced its full-year outlook after reporting strong traffic in its restaurants. This positive performance led to better-than-expected quarterly earnings and revenue. As a result, the company’s shares rose by 7% in extended trading. The stock has more than doubled in value this year, reaching a market cap of about $11.6 billion as of the latest closing.
In the quarter that ended on July 14, Cava reported earnings per share of 17 cents, exceeding the 13 cents expected by Wall Street analysts. The company also reported revenue of $233 million, higher than the anticipated $220 million. Net income for the fiscal second quarter was $19.7 million, or 17 cents per share, a significant increase from $6.5 million, or 21 cents per share, compared to the previous year. Net sales climbed by 35% to reach $233 million.
Cava’s same-store sales saw a notable increase of 14.4%, surpassing estimates of 7.9%. Despite a trend of declining visits for many other restaurant chains due to decreased consumer spending, Cava experienced a 9.5% growth in traffic during the quarter. The company’s CEO and co-founder, Brett Schulman, attributed this success to the introduction of a new grilled steak option that enticed customers to visit Cava restaurants. Moreover, Cava added 18 net new locations during the quarter, expanding its total number of restaurants to 341.
Optimistic Future Projections
Looking ahead to fiscal 2024, Cava has revised its same-store sales growth expectations to 8.5% to 9.5%, an increase from the previous range of 4.5% to 6.5%. The company also anticipates opening 54 to 57 new locations this year, up from the initial forecast of 50 to 54 restaurants. Previously, Cava had projected an adjusted EBITDA of $100 million to $105 million for the fiscal year.
Cava has demonstrated strong performance, exceeding expectations in both earnings and revenue. The company’s ability to attract customers with innovative menu options and maintain growth in a challenging market environment is commendable. With an optimistic outlook for the future and a focus on expansion, Cava is poised for continued success in the competitive restaurant industry.