Cava (CAVA) delivered robust second-quarter results, exceeding Wall Street expectations across key metrics. The Mediterranean fast-casual chain reported a 35.2% year-over-year increase in net sales, reaching $233.5 million, surpassing the anticipated $219 million. Adjusted earnings per share came in at $0.17, beating the forecasted $0.13. Same-store sales rose by 14.4%, well above the expected 7.45%, driven by increased foot traffic, menu price adjustments, new store openings, and the highly successful introduction of grilled steak.
CEO Brett Schulman emphasized that Cava is at the "nexus of consumer convergence," attracting customers who are moving away from fine dining and opting for higher-quality fast-casual dining experiences. He noted that despite economic uncertainties, consumers are choosing Cava for its value proposition, which offers fresh Mediterranean food at prices comparable to traditional fast food.
The company's stock hit a record high, closing at $102.39 on Wednesday, with an intraday peak of $104.84 on Thursday, before surging to $112 in after-hours trading. Year-to-date, Cava's shares have surged 137%, significantly outperforming both Chipotle (17%) and the S&P 500 (17%).
Cava's expansion strategy remains deliberate, with plans to grow its footprint to 1,000 locations by 2032. In Q2 alone, Cava opened 18 new locations, bringing the total to 341, compared to 14 new locations in Q1. The company is also focused on increasing brand awareness within existing markets and plans to relaunch its loyalty program in October. Future growth drivers include the rollout of catering services, with a market test in major metro areas in 2025 and a national launch planned for 2026.
The company has raised its fiscal 2024 outlook, now expecting sales growth of 8.5% to 9.5%, up from previous estimates of 4.5% to 6.5%. Cava also increased its target for new restaurant openings to 54-57, up from 50-54. The restaurant-level profit margin is now projected to be between 24.2% and 24.7%, slightly higher than the previous estimate of 23.7% to 24.3%.
Cava's strong performance comes amid a challenging environment for the broader food industry, where fast-casual dining is one of the few bright spots. Schulman highlighted that Cava has raised prices by 12% from 2019 to 2023, a rate lower than both fast food and grocery price increases, according to CPI data. This strategic pricing has helped Cava maintain its appeal, offering consumers a compelling alternative to traditional fast food.
CEO Brett Schulman emphasized that Cava is at the "nexus of consumer convergence," attracting customers who are moving away from fine dining and opting for higher-quality fast-casual dining experiences. He noted that despite economic uncertainties, consumers are choosing Cava for its value proposition, which offers fresh Mediterranean food at prices comparable to traditional fast food.
The company's stock hit a record high, closing at $102.39 on Wednesday, with an intraday peak of $104.84 on Thursday, before surging to $112 in after-hours trading. Year-to-date, Cava's shares have surged 137%, significantly outperforming both Chipotle (17%) and the S&P 500 (17%).
Cava's expansion strategy remains deliberate, with plans to grow its footprint to 1,000 locations by 2032. In Q2 alone, Cava opened 18 new locations, bringing the total to 341, compared to 14 new locations in Q1. The company is also focused on increasing brand awareness within existing markets and plans to relaunch its loyalty program in October. Future growth drivers include the rollout of catering services, with a market test in major metro areas in 2025 and a national launch planned for 2026.
The company has raised its fiscal 2024 outlook, now expecting sales growth of 8.5% to 9.5%, up from previous estimates of 4.5% to 6.5%. Cava also increased its target for new restaurant openings to 54-57, up from 50-54. The restaurant-level profit margin is now projected to be between 24.2% and 24.7%, slightly higher than the previous estimate of 23.7% to 24.3%.
Cava's strong performance comes amid a challenging environment for the broader food industry, where fast-casual dining is one of the few bright spots. Schulman highlighted that Cava has raised prices by 12% from 2019 to 2023, a rate lower than both fast food and grocery price increases, according to CPI data. This strategic pricing has helped Cava maintain its appeal, offering consumers a compelling alternative to traditional fast food.