On a busy day at a Cava in New York City, captured on June 22, 2023, the scene was indicative of a larger trend. The Mediterranean-inspired restaurant chain, known for its customizable meals, saw a significant increase in foot traffic, contributing to its strong quarterly financial results.
Following an impressive surge in restaurant traffic, which nearly reached a 10% increase, Cava has raised its full-year projections, reflecting confidence in sustained growth. The change came after the company revealed earnings and revenue that not only beat analysts’ forecasts but also sent its shares up 9% in after-hours trading. Cava’s market valuation currently stands at around $11.6 billion.
Quarterly Performance Details
For the quarter ended July 14, here are the main financial data reported by Cava compared to analysts’ expectations, as detected by LSEG:
- Earnings per share: Reported at 17 cents, beating the 13 cents forecast.
- Income: It reached $233 million, surpassing the $220 million forecast.
The chain saw its net income rise to $19.7 million, or 17 cents a share, a significant increase from the prior year’s $6.5 million, or 21 cents a share. Additionally, net sales increased 35% to $233 million, with same-store sales up 14.4%, well above the 7.9% StreetAccount estimate.
Operational Highlights and Future Outlook
Contrary to the trend of declining foot traffic seen at other restaurants due to the economic downturn, Cava reported a 9.5% increase in customer traffic during the quarter. CEO Brett Schulman attributes the growth in part to the introduction of new menu items like the well-received grilled steak.
The period also saw the opening of 18 new Cava locations, bringing the total to 341 restaurants. Looking ahead to fiscal 2024, Cava revised its same-store sales growth expectations to between 8.5% and 9.5%, up from its initial guidance of 4.5% to 6.5%. The company also expects to increase the number of new restaurant openings to between 54 and 57 for the year, up from its previously stated range of 50 to 54.
Additionally, Cava updated its fiscal year adjusted EBITDA guidance to between $109 million and $114 million, up from its previous guidance of $100 million to $105 million.
Strategic improvements and continued growth
These promising numbers and strategic expansions underscore Cava’s strong position in the competitive restaurant industry, continuing to attract and delight customers with innovative offerings and a commitment to quality.
Stay tuned for more insights and updates, including expert analysis on this and other related industry trends.
