After the market close on Thursday, the Mediterranean fast-casual chain Cava reported Q2 results. Cava’s Q2 results beat estimates across revenue, earnings, and same-store sales. Cava also raised its full-year outlook as its restaurants reported strong traffic.
Shares of the company rose 9% in extended trading. The stock has more than doubled its value this year, bringing Cava’s market cap up to about $11.6 billion, as of Thursday’s close.
Cava Q2 earnings results
Here is what the company reported for the quarter that ended July 14 compared to what Wall Street was expecting, based on a survey of analysts by LSEG:
Cava’s earnings per share: 17 cents vs. 13 cents expected
Cava’s revenue: $233 million vs. $220 million expected
The Mediterranean restaurant chain reported fiscal Q2 net income of $19.7 million, or 17 cents per share, up from $6.5 million, or 21 cents per share, a year earlier.
Net sales jumped 35.2% year over year to $233.5 million, compared to expectations of $219 million. Adjusted earnings per share came in at $0.17, versus the $0.13 expected.
The company’s same-store sales rose 14.4%, topping StreetAccount estimates of 7.9%.
Winning grilled steak
While many other restaurant companies have reported declines in visits as consumers pull back their spending, Cava said its traffic grew 9.5% in the quarter. Cava CEO and co-founder Brett Schulman credited the chain’s new grilled steak option as one reason customers kept coming to its restaurants during the quarter.
The company is at the “nexus of consumer convergence” as consumers trade down from fine-dining restaurants but trade up from fast food.
“At a time when consumers are increasingly feeling the pressure of an uncertain economy and are more discerning about where and how they spend their money, they are choosing to dine at Cava,” he said.
Cava opened 18 net new locations during the quarter, bringing its total footprint up to 341 restaurants.
Cava’s outlook
For fiscal 2024, Cava now expects same-store sales growth of 8.5% to 9.5%, up from its prior range of 4.5% to 6.5%. The company is also projecting that it will open 54 to 57 new locations this year, up from its previous forecast of 50 to 54 restaurants.
Cava also expects to report adjusted earnings before interest, taxes, depreciation and amortization of $109 million to $114 million. Previously, it was projecting adjusted EBITDA of $100 million to $105 million for the fiscal year.
Cava’s stock update
Cava Group, Inc. saw its share price jumped 6.6%. On Wednesday, Cava stock hit a record-high close of $102.39. On Thursday, Cava’s share price hit an intraday high of $104.84. In after-hours trading, shares jumped to as much as $112.
