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Shares of Mediterranean fast-casual restaurant brand CAVA Group ($CAVA) spiked over 16% in premarket trading on Wednesday following the release of third-quarter results.
Washington-based CAVA said its quarterly earnings per share (EPS) rose sharply from $0.06 in the year-ago quarter to $0.15. Revenue climbed roughly 39% year-over-year to $243.82 million.
The bottom-line and top-line results exceeded the consensus estimates of $0.11 per share and $233.05 million.
Net new CAVA restaurant openings totaled 11, with the total CAVA restaurants currently at 352, up 21.4% YoY.
Same restaurant sales growth was at 18.1% on the back of 12.9% guest traffic growth. Average unit volume climbed from $2.6 million a year ago to $2.8 million.
CAVA digital revenue’s share of the total was 35.8%.
Restaurant-level profit margin expanded from 25.1% in the third quarter of 2023 to 25.6% in the third quarter of 2024, as leverage from higher sales offset incremental wage investments and input costs associated with the launch of the grilled steak.
Brett Schulman, co-founder and CEO of CAVA, said, “Our third quarter results demonstrate the strength of our Mediterranean category-defining brand and the broad appeal of our unique value proposition, creating what is quickly becoming the next major cultural cuisine category.”
The company raised its 2024 new CAVA restaurant opening guidance from 54-57 to 56-58, and CAVA same restaurant sales growth outlook from 8.5%-9.5% to 12%-13%.
The adjusted earnings before interest, tax, depreciation and amortization guidance was revised up from $109 million-$114 million to $121 million-$126 million.
CAVA was among the top five trending stocks on the Stocktwits platform.
Retailers on Stocktwits platform harbored mixed sentiment toward the stock.
A user touted CAVA as a”turnaround story” flying under the radar.
However, another pointed to the exorbitant P/E multiple and said it is the “most expensive stock ever." The stock trades at a P/E multiple of 312.50 on a forward basis.
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