Fast-Casual Restaurant Cava Crushes Earnings Expectations in Q2 2024

Fast-casual restaurant Cava released second-quarter earnings that surpassed expectations. Net sales reached $233.5 million, up 35.2%, compared to the $219 million predicted by analysts. Reported Q2 2024 net income was $19.7 million, with adjusted earnings per share of 17 cents versus projections of 13 cents.

Higher foot traffic, which increased 9.5% year over year, alongside higher menu prices and new locations pushed same-store sales up 14.4%, nearly double what experts anticipated. In June, Cava added a new grilled steak to the menu, which the restaurant claims outperformed expectations.

“At a time when consumers are increasingly feeling the pressure of an uncertain economy and are more discerning about where and how they spend their money, they are choosing to dine at Cava,” said CEO Brett Schulman, per Yahoo! Finance.

As many restaurants are closing locations, Cava remains on track to expand. The chain currently has 341 locations but plans to have about 1,000 by 2032. Eighteen new restaurants were opened in the second quarter versus 14 new locations in the first quarter. The company also operates 10 hybrid kitchen hubs and 10 digital kitchen hubs.

For fiscal 2024, Cava expects sales growth between 8.5% and 9.5%, which is more than a previous estimate of 3% to 5%. About 54 to 57 new locations will open instead of the 50 to 54 originally planned for the year.

According to Schulman, the Mediterranean restaurant has raised prices by 12% over the past few years. Yet, the increase overall has not been as dramatic as fast-food and grocery prices.

Earlier this year, Cava committed to keeping prices steady in California, despite higher labor costs. According to Chief Financial Officer Tricia Tolivar, the company is prepared to absorb the increased costs and not pass the burden onto customers.

Cava isn’t content with just opening new locations to stay ahead of rivals. It plans to test catering in major markets next year, with a national launch likely in 2026. The restaurant is also revamping its rewards program to help raise brand awareness.