Cava Stock Pops After Restaurant Chain Reports Better-Than-Expected Results
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Key Takeaways
Cava Group reported better-than-expected results for the fourth quarter as same-store sales surged.
Cava said it anticipates this year’s same-store sales will grow 3% to 5%.
Shares jumped Tuesday and were more than 150% above their initial public offering price last June.
Cava Group (
CAVA
) shares soared close to 12% in intraday trading Tuesday after the restaurant chain posted better-than-expected earnings and revenue as demand for its food surged.
The company reported a fourth-quarter profit of 2 cents per share, above expectations. Overall revenue rose 36% from a year ago to $177.1 million, and from its namesake restaurants, revenue jumped 52.5% to $175.5 million. Both were above estimates.
Cava
same-store sales
were up 11.4%, above forecasts, and restaurant-level
profit margins
increased 240
basis points (bps)
to 22.4%, ahead of expectations.
The company added 19 restaurants during the period, giving it a total of 309. For fiscal 2024, it plans to add 48 to 52 more. In addition, it anticipates same-store sales growth of 3% to 5% this year, with revenue-level profit margin of 22.7% to 23.3%.
Cava was scheduled to release its results after the close of trading Tuesday, but after some numbers appeared in reports Monday, the company was prompted to release them earlier.
Shares of Cava were up about 12% at $56.48 as of 3:30 p.m. ET Tuesday. Cava Group
began publicly trading last June
after it sold shares in an
initial public offering (IPO)
at $22 each. With Tuesday’s gains, shares have more than doubled from their IPO price.
