Cava recently raised its full-year outlook after reporting strong traffic in its restaurants, leading to better-than-expected quarterly earnings and revenue. The company’s shares saw a 7% increase in extended trading, with its market cap reaching approximately $11.6 billion by the end of the quarter.
During the quarter that ended on July 14, Cava exceeded Wall Street’s expectations in terms of earnings per share and revenue. The Mediterranean restaurant chain reported a 35% increase in net sales, reaching $233 million. Its same-store sales rose by an impressive 14.4%, far surpassing analysts’ estimates of 7.9%.
Despite a general trend of declining visits in the restaurant industry due to reduced consumer spending, 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 attracted more customers to the chain’s locations.
Cava opened 18 net new locations in the previous quarter, expanding its total footprint to 341 restaurants. Looking ahead to fiscal 2024, the company now anticipates a same-store sales growth of 8.5% to 9.5%, a significant increase from its previous projection of 4.5% to 6.5%. Additionally, Cava intends to open 54 to 57 new locations this year, up from its initial forecast of 50 to 54 restaurants.
Previously, Cava had forecasted an adjusted EBITDA of $100 million to $105 million for the fiscal year. With its strong performance in the recent quarter and optimistic outlook for the future, the company is poised to continue its growth trajectory and solidify its position in the competitive restaurant industry.
Cava’s impressive financial results, strong traffic growth, and strategic expansion plans demonstrate its resilience and ability to thrive in challenging market conditions. By focusing on innovation, customer satisfaction, and sustainable growth, Cava has positioned itself as a leader in the restaurant industry and is well-positioned for continued success in the years to come.