Cava Reports Strong Second Quarter Earnings, Shares Reach Record Highs

Cava Group, a Mediterranean restaurant chain based in Washington, D.C., recently announced its second-quarter earnings report, which exceeded analysts’ expectations.

The company reported earnings of 17 cents per share, surpassing the FactSet estimate of 13 cents. Revenue increased by 35%, reaching $231.4 million, while analysts had projected $219.5 million.

This report marks Cava’s first earnings decline in six quarters, although same-restaurant sales grew by 14.4%, slightly slowing from an 18.2% increase last year yet still outperforming projections of 8.2% growth.

CEO Bret Schulman noted that the company’s traffic grew by 9.5% during the quarter, and Cava successfully opened 18 new restaurant locations, increasing its total to 341 across the nation.

Following the positive results, Cava raised its guidance for the year, anticipating same-restaurant sales growth of 8.5% to 9.5% for 2024, adjusted EBITDA ranging from $109 million to $114 million, and plans to open 54 to 57 new restaurants.

Analysts from Stifel expressed optimism about Cava’s future performance, highlighting the company’s ability to benefit from an organic growth cycle as it expands its brand recognition through additional locations.

On August 23, Cava’s stock experienced a significant surge, jumping 22% and reaching record highs as investors responded positively to the strong earnings report.

Despite some skepticism from a portion of Wall Street regarding insider sales and high valuations, the general market sentiment remains bullish as the company focuses on maintaining its growth trajectory.