New York, NY – Cava Group (CAVA) surprised investors with its fourth-quarter earnings report, which exceeded expectations. The Mediterranean fast-casual chain, which went public in 2023, experienced a significant surge in its stock price on Tuesday following the release of the positive financial results.
Analysts had anticipated a break-even quarter for Cava, but the company reported earnings of two cents per share, beating expectations. Revenue also saw a notable increase, rising by 52.5% to $175.5 million, slightly surpassing the projected $174.3 million.
The growth in Cava’s same-restaurant sales was particularly impressive, with an 11.4% increase driven by a 6.2% rise in traffic and 5.2% from menu price adjustments and product mix. For the full year, same-store sales surged by 17.9%, exceeding the guidance provided in November of 15%-16%. Additionally, restaurant-level profit margins rose to 24.8%, surpassing the initial target of at least 24%.
In the fourth quarter, Cava expanded its footprint by opening 19 net new locations, bringing the total number of Cava eateries to 309, marking a 30% increase from the previous year. Investors eagerly awaited Cava’s conference call to discuss the fourth-quarter results and provide a business update scheduled for 8:30 a.m. ET on Wednesday morning.
Following the positive earnings report, Cava’s stock price soared by 12% to $56.56 intraday on Tuesday. Although shares had dipped by 1% to $50.50 in Monday’s trading session, the current price is well above the $48.69 cup-with-handle buy point. Investors now have the option to consider $56.34 as a new or alternative handle buy point, signaling a potential upward trend in the stock.
Since its debut at $22 per share in June 2023, Cava’s stock has experienced fluctuations, reaching a record high of $58.10 on August 2 before dropping to $29.05 on October 4. Investors continue to monitor the stock’s performance closely, looking for opportunities to capitalize on potential growth.
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