Cava Group experienced a significant surge in its stock price on Tuesday, reaching a new intraday high following impressive fourth-quarter financial results. The Mediterranean food chain surpassed Wall Street’s estimates for both earnings and revenue, indicating robust performance and growth momentum.
In the fourth quarter, Cava reported earnings of two cents per share, exceeding analysts’ expectations tracked by FactSet, who had anticipated breakeven results. Moreover, the company’s quarterly revenue of $177.2 million surpassed estimates of $174.3 million, marking a substantial 36% increase compared to the same period last year. Additionally, Cava achieved a remarkable 11.4% growth in same-restaurant sales, surpassing the consensus among analysts, which had forecasted a 6.2% increase.
Chief Executive Brett Schulman expressed his satisfaction with the company’s performance, highlighting a year of significant growth and success, particularly as Cava transitioned into a public company. Schulman emphasized the company’s commitment to reinvesting in its team and enhancing the guest experience.
Investors responded positively to Cava’s strong financial results, driving the company’s stock price up by 12% to $56.14 at the close of trading on Tuesday. At one point during the day, the stock reached $58.22, marking its highest intraday level since Cava’s initial public offering on June 15.
Cava also witnessed an increase in customer traffic throughout the year, defying broader economic concerns such as inflation and rising interest rates. Schulman attributed this resilience to the company’s value proposition and affordable price point, allowing customers to indulge in premium offerings without exceeding their budget.
Cava’s impressive fourth-quarter performance aligns with a broader trend of strong results among fast-casual restaurants in recent months. Alongside Cava, Domino’s Pizza and Chipotle Mexican Grill also reported robust earnings, highlighting the resilience and success of the fast-casual dining sector.
On Monday, Domino’s Pizza surpassed analysts’ expectations by posting earnings of $4.48 per share, exceeding the consensus estimate of $4.38 per share. Similarly, Chipotle Mexican Grill reported earnings of $10.36 per share on February 6, surpassing forecasts of $9.71 per share.
Looking ahead, Cava anticipates reporting earnings before interest, taxes, depreciation, and amortization (EBITDA) between $86 million and $92 million for the full year. This projection significantly surpasses analysts’ expectations, who had forecasted EBITDA of $71.1 million.
Cava’s optimistic outlook for EBITDA reflects the company’s confidence in its growth trajectory and operational performance. The strong financial guidance suggests that Cava is well-positioned to capitalize on market opportunities and navigate challenges effectively.
Overall, Cava’s stellar fourth-quarter results and promising outlook for the full year underscore its strength and resilience in the competitive restaurant industry. As part of a cohort of fast-casual restaurants delivering exceptional performance, Cava continues to demonstrate its ability to drive growth and create value for shareholders amidst evolving market dynamics.