Cava, a popular Mediterranean restaurant chain, recently announced a significant increase in its full-year outlook after reporting strong traffic at its locations. This positive news fueled better-than-expected quarterly earnings and revenue for the company, leading to a 7% increase in its stock in extended trading. This boost in performance has also resulted in Cava’s market cap rising to about $11.6 billion, highlighting the company’s continued success in the market.
In the recently ended quarter, Cava reported earnings per share of 17 cents, surpassing the 13 cents expected by Wall Street analysts. Similarly, the company’s revenue of $233 million exceeded the anticipated $220 million, showcasing robust financial performance. Cava’s net income for the fiscal second quarter reached $19.7 million, a significant increase from the $6.5 million reported in the same period the previous year. Additionally, net sales climbed by an impressive 35% to reach $233 million, demonstrating the company’s strong growth trajectory.
One of the crucial factors behind Cava’s exceptional performance has been its ability to increase same-store sales by 14.4%, well above the StreetAccount estimates of 7.9%. Despite a challenging economic environment that has seen other restaurant chains experience a decline in visits, Cava managed to grow its traffic by 9.5% during the quarter. CEO and co-founder Brett Schulman attributed this success to the introduction of a new grilled steak option, which resonated well with customers and encouraged them to visit Cava’s restaurants.
During the quarter, Cava expanded its footprint by opening 18 net new locations, bringing the total number of restaurants to 341. Looking ahead, the company has revised its full-year guidance, now expecting same-store sales growth of 8.5% to 9.5%, up from the previous range of 4.5% to 6.5%. Additionally, Cava plans to open 54 to 57 new locations by the end of the year, an increase from the initial forecast of 50 to 54 restaurants. The company also anticipates adjusted EBITDA of $100 million to $105 million for the fiscal year.
Cava’s recent success can be attributed to its strong financial performance, innovative menu offerings, and strategic expansion plans. By consistently exceeding expectations and providing exceptional value to its customers, Cava has established itself as a leading player in the highly competitive restaurant industry.