Cava, the Mediterranean restaurant chain, has recently reported a surge in foot traffic, leading to better-than-expected quarterly earnings and revenue. This strong performance has prompted the company to raise its full-year outlook. In the latest quarter ending July 14, Cava reported an earnings per share of 17 cents, surpassing Wall Street’s expectations of 13 cents. Additionally, the company’s revenue came in at $233 million, exceeding analysts’ forecasts of $220 million.
One of the key drivers of Cava’s success was the introduction of a new grilled steak option, which attracted customers and contributed to the increase in foot traffic. Despite a challenging economic environment where many restaurant companies experienced declining visits due to reduced consumer spending, Cava managed to grow its traffic by 9.5% during the quarter. This growth, coupled with a 14.4% rise in same-store sales, indicates a strong demand for Cava’s offerings.
Cava has ambitious plans for expansion, with a goal of opening 54 to 57 new locations this year, up from its previous forecast of 50 to 54 restaurants. The company opened 18 net new locations in the last quarter, bringing its total footprint to 341 restaurants. This expansion strategy aligns with Cava’s revised same-store sales growth expectations of 8.5% to 9.5% for the fiscal year 2024, a significant increase from its initial range of 4.5% to 6.5%. Furthermore, Cava is projecting adjusted EBITDA of $100 million to $105 million for the fiscal year, indicating confidence in its ability to sustain profitability amidst rapid expansion.
The impressive financial results and expansion plans have led to a substantial increase in Cava’s market value, with the company’s market cap reaching approximately $11.6 billion. The stock price has more than doubled in value this year, reflecting investor confidence in Cava’s growth potential. Shares of the company surged by 7% in extended trading following the announcement of strong quarterly earnings, underscoring the positive reception from the investment community.
Cava’s recent performance highlights its resilience and ability to thrive in a competitive market environment. With a focus on innovation, customer satisfaction, and strategic expansion, Cava is well-positioned for continued growth and success in the future.