CAVA Group Inc. (CAVA) is starting the week off strong, with its stock price skyrocketing 17.18% in pre-market trading on Wednesday. The surge is fueled by a combination of robust third-quarter earnings and an upward revision of the company’s annual outlook, according to Benzinga Pro.
The fast-casual chain, renowned for its Mediterranean-inspired cuisine, delivered impressive results. Earnings per share reached 15 cents, comfortably exceeding analyst expectations of 11 cents. Revenue for the quarter hit $243.82 million, surpassing the anticipated $233.59 million and showcasing a significant jump from $175.55 million in the same period last year.
CAVA, a notable competitor to Chipotle Mexican Grill, Inc. (CMG), has been actively expanding its footprint. The company opened 11 new restaurants during the quarter, bringing the total count to 352, representing a robust 21.4% year-over-year growth in restaurant count.
This expansion is clearly paying off. Same-restaurant sales experienced an impressive 18.1% growth, fueled by a 12.9% increase in guest traffic. The average unit volume (AUV) reached $2.8 million, marking an improvement from $2.6 million in the previous year. Restaurant-level profit saw a remarkable 41.9% increase to $61.8 million, translating to a profit margin of 25.6%.
CEO Brett Schulman attributed CAVA’s success to the brand’s strength and strategic initiatives. He highlighted the impact of a newly launched loyalty program and an optimized labor model, both contributing to the company’s overall performance. CAVA’s confidence in its trajectory is evident in the increased fiscal year 2024 outlook for both new restaurant openings and same-restaurant sales growth.
The market is clearly responding positively to CAVA’s strong performance. After-hours trading saw the company’s shares climb by 14.80%, trading at $166. This upward momentum reflects investor confidence in CAVA’s ability to continue its growth trajectory in the competitive fast-casual market.
