Mediterranean restaurant chain Cava Group (CAVA) has reported first-quarter financial results that beat Wall Street forecasts on the top and bottom lines and raised its forward guidance.
The Washington, D.C.-based company reported earnings per share (EPS) of $0.13 U.S., which was more than double the $0.05 U.S. expected among analysts.
Revenue in the quarter totaled $259 million U.S., ahead of Wall Street expectations for $246 million U.S. Sales were up 30% from a year ago.
Much of the growth came from Cava’s rapid expansion as the company opened 14 new restaurant locations during the quarter, bringing its national count across the U.S. to 323 outlets.
While the overall print was strong, Cava said that its same-store sales increased only 2.3% from a year ago as consumers pullback their spending on dining out.
In the previous quarter, Cava’s same-store sales grew by 11% year over year. The decline in same-store sales sent Cava’s stock down 3% in after hours trading.
Many restaurants in the U.S. have reported weakening demand as inflation has pushed consumers to eat more at home.
Cava maintains strong average unit sales of $2.6 million U.S. and a restaurant-level profit margin at 25.2%, higher than many of its peers.
The company’s administrative expenses made up 13% of its revenue in Q1, lower than a year ago. That decline has helped Cava achieve profitability for four consecutive quarters.
Cava also raised its forward guidance for the current year, saying it expects to add 50 to 54 new restaurant locations this year, up from a previous forecast of 48 to 52 outlets.
Management also expects same-store sales to grow between 4.5% and 6.5% in 2024, up from an earlier forecast of 3% to 5% growth.
Cava is now forecasting full-year earnings of $100 million U.S. to $105 million U.S., according to management. That’s an increase from an earlier forecast of $86 million U.S. to $92 million U.S.
The stock of Cava has more than doubled (up 102%) so far this year and currently trades at $82.40 U.S. per share.
The company went public in June 2023 and since then its share price has risen 116%.
