In a surprising turn of events, Cava has announced that it is raising its full-year outlook after reporting strong traffic at its restaurants. The Mediterranean restaurant chain’s quarterly earnings and revenue exceeded expectations, leading to a 7% increase in its stock price during extended trading. This remarkable performance has contributed to a more than doubling of Cava’s market cap, which now stands at approximately $11.6 billion.
For the quarter ending on July 14, Cava reported earnings per share of 17 cents, surpassing Wall Street’s expectations of 13 cents. Additionally, the company generated $233 million in revenue, outperforming the projected $220 million. This robust financial performance can be attributed to several key factors, including a 35% increase in net sales and a remarkable 14.4% growth in same-store sales, surpassing estimates by a significant margin.
One of the driving forces behind Cava’s exceptional performance has been the introduction of a new grilled steak option, which resonated well with customers and contributed to the increased foot traffic at its restaurants. The company’s strategic decision to open 18 net new locations during the quarter has also played a crucial role in expanding its reach and strengthening its market presence.
Looking ahead, Cava is optimistic about its growth prospects for the remainder of the year. The company now anticipates a same-store sales growth of 8.5% to 9.5% for fiscal 2024, a significant uptick from its previous forecast of 4.5% to 6.5%. Moreover, Cava plans to open 54 to 57 new locations this year, exceeding its initial projection of 50 to 54 restaurants. In addition, the company has revised its adjusted EBITDA guidance for the fiscal year to a range of $100 million to $105 million.
Cava’s stellar performance in the recent quarter, coupled with its ambitious growth projections for the future, paints a promising picture for the company’s trajectory. By leveraging its innovative menu offerings, strategic expansion initiatives, and strong customer traffic, Cava is well-positioned to capitalize on the growing demand for Mediterranean cuisine and solidify its position as a market leader in the restaurant industry.
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