Cava earnings beat estimates as restaurant traffic climbs nearly 10%

Cava on Thursday raised its full-year outlook as its restaurants reported strong traffic, fueling better-than-expected quarterly earnings and revenue.

Shares of the company rose 9% in extended trading. The stock has more than doubled its value this year, bringing Cava’s market cap up to about $11.6 billion, as of Thursday’s close.

Here is what the company reported for the quarter that ended July 14 compared to what Wall Street was expecting, based on a survey of analysts by LSEG:

• Earnings per share: 17 cents vs. 13 cents expected
• Revenue: $233 million vs. $220 million expected

The Mediterranean restaurant chain reported fiscal second-quarter net income of $19.7 million, or 17 cents per share, up from $6.5 million, or 21 cents per share, a year earlier.

Net sales climbed 35% to $233 million. The company’s same-store sales rose 14.4%, topping StreetAccount estimates of 7.9%.

While many other restaurant companies have reported declines in visits as consumers pull back their spending, Cava said its traffic grew 9.5% in the quarter. Cava CEO and co-founder Brett Schulman credited the chain’s new grilled steak option as one reason customers kept coming to its restaurants during the quarter.

Cava opened 18 net new locations during the quarter, bringing its total footprint up to 341 restaurants.

For fiscal 2024, Cava now expects same-store sales growth of 8.5% to 9.5%, up from its prior range of 4.5% to 6.5%. The company is also projecting that it will open 54 to 57 new locations this year, up from its previous forecast of 50 to 54 restaurants.

Cava also expects to report adjusted earnings before interest, taxes, depreciation and amortization of $109 million to $114 million. Previously, it was projecting adjusted EBITDA of $100 million to $105 million for the fiscal year.