Cava, a Mediterranean restaurant chain, has raised its full-year outlook after reporting strong traffic and better-than-expected earnings for the quarter that ended on July 14. The company’s shares surged by 9% in extended trading, reflecting its impressive growth, with its market capitalization reaching approximately $11.6 billion.
This year, Cava’s stock has more than doubled in value, signaling investor confidence in the company’s performance and future potential.
For the fiscal second quarter, Cava reported net income of $19.7 million, or 17 cents per share, which was a significant increase from the $6.5 million, or 21 cents per share, recorded a year ago.
The company’s revenue rose by 35% to $233 million, surpassing Wall Street’s expectations of $220 million. Additionally, Cava’s same-store sales increased by 14.4%, far exceeding analysts’ predictions of 7.9%.
Cava’s CEO, Brett Schulman, attributed the company’s success in part to the introduction of a new grilled steak option, which helped drive a 9.5% increase in customer traffic during the quarter.
This growth comes at a time when many other restaurant chains are experiencing declines in visits due to consumers cutting back on spending. Moreover, Cava expanded its footprint by opening 18 new locations, bringing its total number of restaurants to 341.
Looking ahead, Cava has revised its fiscal 2024 expectations, now forecasting same-store sales growth between 8.5% and 9.5%, up from the previous estimate of 4.5% to 6.5%. The company also plans to open 54 to 57 new locations this year, slightly more than its earlier projection of 50 to 54.
Additionally, Cava has increased its adjusted EBITDA forecast to a range of $109 million to $114 million, up from the previous range of $100 million to $105 million, reflecting its confidence in continued strong performance.
