Cava Group topped expectations for Q1 results late Tuesday and lifted its outlook for restaurant openings and same-restaurant sales growth. Shares of CAVA stock rebounded to a record high Wednesday after the Mediterranean fast-casual food chain initially tumbled on declining guest traffic.
Cava reported earnings of 12 cents per share, improving from a loss of $1.30 per share last year and clearing FactSet views of 5 cents. Revenue leapt 30.3% to $256.3 million and beat Wall Street forecasts of $246 million.
Same-store sales growth slowed for the fourth consecutive quarter, climbing 2.3%. Still, it came in ahead of FactSet estimates of a 1.6% increase. CAVA reported 11.4% same-restaurant sales growth in Q4.
The company noted that the same-restaurant sales growth figure included a 3.5% increase to menu prices, which was offset by a 1.2% decline in guest traffic.
Cava reported a restaurant-level profit margin of 25.2% for the first quarter, easing from 25.4% last year.
The Mediterranean chain averaged a 152.7% increase in earnings the last three quarters leading to Tuesday's report, although growth slowed over the last two periods.
Cava now expects to open 50 to 54 net new restaurants in 2024, up from its February outlook of 48 to 52 net openings. The company lifted its same-restaurant sales growth outlook to range from 4.5% to 6.5%, compared to prior estimates between 3% and 5%. It now sees adjusted EBITDA ranging from $100 million to $105 million, up from $86 million to $92 million.
CAVA Stock Performance
CAVA stock rallied 7% Wednesday to a closing record of 88.17. Shares initially fell 8.8% in early trade after results.
CAVA stock has rallied about 105% so far this year. Shares are extended after clearing a trendline entry in late April.
Cava is on IBD Leaderboard.
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