Cava Group (NYSE:CAVA), the Mediterranean restaurant chain, has raised its full-year outlook following strong traffic and better-than-expected earnings in its most recent quarter. The upbeat results prompted a surge in the company’s stock price, sending it to a new 52-week high on Friday.
For the fiscal second quarter ending July 14, Cava reported earnings per share of $0.17, surpassing Wall Street’s expectations of $0.13. Revenue for the quarter also beat forecasts, coming in at $233 million compared to the anticipated $220 million. This marks a substantial 35% increase in net sales year-over-year, reflecting the company’s effective growth strategies and strong customer engagement. Net income for the quarter rose significantly to $19.7 million, up from $6.5 million in the same period a year earlier.
Another promising metric was that Cava’s same-store sales jumped by 14.4%, well above Wall Street’s expectations of 7.9%. This impressive growth is in stark contrast to the broader restaurant industry, where many chains have reported declines in customer visits as consumers become more cautious with their spending. Cava’s success can be partly attributed to its innovative menu options, including the introduction of a new grilled steak offering. The company reported a 9.5% increase in traffic during the quarter, indicating strong customer loyalty and brand appeal.
The company now expects its same-stores sales to grow between 8.5% and 9.5% this year, which is higher than its earliest forecasted range of 4.5% to 6.5%.
For growth investors looking for a top restaurant stock to own right, Cava could make for an excellent option. Not only are sales going strong, but with more restaurant openings, the company still has an appetite for much more growth in the future.