Cava Group
stock reached a new intraday high on Tuesday after the Mediterranean food chain cooked up a strong finish to the year. The company’s fourth-quarter earnings and revenue came in above Wall Street estimates.
Cava posted fourth-quarter earnings of two cents a share, which beat expectations among analysts tracked by FactSet that it would break even. Revenue for the quarter of $177.2 million beat estimates of $174.3 million and jumped 36% from the same period last year.
Same-restaurant sales growth of 11.4% also beat the consensus call among analysts for an increase of 6.2%.
“It was a tremendous year of growth and performance, all while we became a public company and continued to be able to reinvest in our team and our guests,” Chief Executive Brett Schulman said in an interview with Barron’s.
Shares of Cava closed up 12% to $56.14 on Tuesday. The stock climbed to $58.22 at one point in the day, its highest intraday level since Cava went public on June 15.
Cava also saw its traffic increase during the year. And while consumers continue to feel pressured by high inflation and interest rates, diners at Cava aren’t cutting back.
“We haven’t seen check management,” Schulman said. “…It’s a reflection of our overall value proposition and our price point in general that allows folks to trade up on a premium protein or add an attachment, like our delicious pita chips or those fresh juices, and still be within their budget.”
Cava is among a handful of fast-casual restaurants that posted strong fourth-quarter results this month.
Domino’s Pizza
posted earnings of $4.48 share on Monday, above analysts’ consensus call for $4.38.
Chipotle Mexican Grill
reported earnings of $10.36 a share on Feb. 6, topping forecasts for $9.71 a share.
For the full year, Cava expects to report earnings before interest, taxes, depreciation, and amortization of between $86 million and $92 million. Analysts expected Ebitda of $71.1 million.
Write to Angela Palumbo at angela.palumbo@dowjones.com
Read the full article here
