Cava, the Mediterranean restaurant chain, recently reported strong traffic, leading to better-than-expected quarterly earnings and revenue. The company raised its full-year outlook, prompting a 7% rise in its stock in extended trading. With the stock value more than doubling this year, Cava’s market cap now stands at around $11.6 billion.
In the quarter that ended on July 14, Cava exceeded Wall Street expectations. The company reported earnings per share of 17 cents compared to the 13 cents expected and revenue of $233 million compared to the $220 million expected. The fiscal second-quarter net income surged to $19.7 million, or 17 cents per share, from $6.5 million, or 21 cents per share, a year earlier.
Cava’s net sales saw an impressive 35% climb to $233 million, with same-store sales rising by 14.4%, surpassing StreetAccount estimates of 7.9%. Despite a trend of declining visits in the restaurant industry, Cava experienced a 9.5% growth in traffic during the quarter. The introduction of a new grilled steak option was highlighted as a key driver in attracting customers to Cava’s restaurants.
Expansion Plans
During the quarter, Cava opened 18 net new locations, bringing its total number of restaurants to 341. Looking ahead to fiscal 2024, the company anticipates a same-store sales growth of 8.5% to 9.5%, an increase from its previous range of 4.5% to 6.5%. Moreover, Cava is projecting the opening of 54 to 57 new locations this year, up from its initial forecast of 50 to 54 restaurants.
Financial Outlook
Previously, Cava had projected an adjusted EBITDA of $100 million to $105 million for the fiscal year. With its strong performance and optimistic growth projections, Cava is poised for continued success in the competitive restaurant industry. CEO and co-founder Brett Schulman’s strategic initiatives and innovative menu offerings have undoubtedly contributed to the company’s remarkable financial achievements.
Cava’s latest quarterly earnings report signifies a promising future for the company as it continues to elevate its brand presence, expand its footprint, and deliver exceptional value to customers. With a commitment to excellence and a focus on customer satisfaction, Cava is on track to further solidify its position as a leading player in the restaurant industry.
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