Cava Group, the fast-casual Mediterranean chain, experienced a surge in its shares during intraday trading on Friday. This came after the company raised its 2024 guidance and announced that its new grilled steak offering was “significantly outperforming” expectations.
The company increased its 2024 same-store sales estimate to 9% from 5.5% at the midpoint. Additionally, Cava raised its adjusted EBITDA midpoint projection to $111.5 million from $102.5 million. In the second quarter, the chain saw a 14.4% year-over-year growth in same-store sales and added a net of 18 new locations.
While revenue for the period grew 35% to $233.5 million, diluted earnings per share (EPS) declined by 4 cents to 17 cents. However, both figures exceeded the consensus expectations of analysts polled by Visible Alpha.
One of the key factors contributing to the revenue increase was the introduction of a new protein dish. Cava Group’s CEO, Brett Schulman, stated, “We launched our new grilled steak main, once again exhibiting our excellence in culinary innovation. Grilled steak is significantly outperforming our expectations and giving guests another reason to visit CAVA and come back more often.”
Following this positive news, shares of Cava Group surged by approximately 17% to $119.21 as of 10:30 a.m. ET on Friday. This brings the total increase in the company’s shares to over 175% in 2024.
The success of Cava Group can be attributed to its ability to adapt and innovate within the fast-casual dining space. By introducing new and exciting menu items, the company has been able to attract and retain customers. The popularity of the grilled steak offering demonstrates the effectiveness of this strategy.
Cava Group’s decision to raise its 2024 same-store sales estimate and adjusted EBITDA midpoint projection indicates confidence in its future growth prospects. The strong performance in the second quarter, with a 14.4% increase in same-store sales and the addition of 18 new locations, further supports this positive outlook.
Investors have responded favorably to the company’s performance, with shares experiencing a significant increase. This demonstrates the market’s confidence in Cava Group’s ability to continue delivering strong financial results.
Looking ahead, Cava Group will likely continue to focus on culinary innovation and expanding its footprint. By consistently introducing new and exciting menu options, the company can attract a diverse customer base and maintain its competitive edge in the fast-casual dining industry.
In conclusion, Cava Group’s shares surged after the company raised its 2024 guidance and announced the success of its new grilled steak offering. The increase in same-store sales and the addition of new locations demonstrate the company’s strong performance. By continuing to innovate and expand, Cava Group is well-positioned for future growth in the fast-casual dining market.
