CAVA Group Inc CAVA is set to report its third-quarter earnings Tuesday evening, following a strong second-quarter performance that highlighted the company's accelerating growth and operational effectiveness.
What To Know: In the second quarter, Cava reported earnings of 17 cents per share, beating analyst expectations of 12 cents per share. Revenue for the quarter reached $233.5 million, surpassing estimates and representing an impressive 35% increase compared to the previous year.
A key factor in Cava's second quarter success was its same-restaurant sales growth of 14.4%, driven by a 9.5% increase in customer traffic and an additional 4.9% boost from menu pricing and product mix adjustments.
This growth was further supported by the introduction of grilled steak in June, which has been popular with customers and has helped drive repeat visits. Cava's restaurant-level profit margin also stood at 26.5% for the second quarter, demonstrating the company's ability to balance higher sales against increased wage and ingredient costs.
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What Else: Cava's expansion plans also remain aggressive. The company opened 18 new locations in the second quarter, bringing its total count to 341, up from approximately 260 at the time of its June 2023 IPO.
Cava's goal to reach 1,000 U.S. locations by 2032 aligns it as a formidable player in the fast-casual space, often drawing comparisons to Chipotle, with which it shares a focus on high-quality, customizable offerings and strong brand positioning.
Looking ahead, Cava raised its full-year 2024 guidance for adjusted EBITDA to between $105 million and $114 million and lifted its same-restaurant sales growth forecast from an initial 4.5%-6.5% to a new range of 8.5%-9.5%.
Analysts also see room for upside, noting that Cava's conservative guidance may still underestimate the growth potential driven by factors such as digital expansion, an upcoming loyalty program and ongoing menu innovation.
According to data from Benzinga Pro, CAVA has a 52-week high of $151.56 and a 52-week low of $30.00
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