CAVA Group Q2 revenue grows 20.3% but misses estimates

Overview

• CAVA fiscal Q2 revenue grows 20.3% yr/yr but misses analyst expectations

• Company opened 16 net new restaurants, total now 398

• CAVA net income for Q2 was $18.4 mln, slightly down from last year

Outlook

• CAVA Group forecasts same restaurant sales growth of 4.0% to 6.0%

• Company maintains restaurant-level profit margin guidance at 24.8% to 25.2%

Result Drivers

• NEW RESTAURANTS - Revenue growth driven by 75 net new restaurant openings since Q2 2024, exceeding Co's performance expectations

• MENU PRICING - Same restaurant sales growth of 2.1% attributed to menu price adjustments and product mix

• COST PRESSURES - Profit margin slightly declined due to higher input costs and wage investments

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 13 "strong buy" or "buy", 6 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the restaurants & bars peer group is "buy"

• Wall Street's median 12-month price target for CAVA Group Inc is $111.00, about 25.9% above its August 11 closing price of $82.30

• The stock recently traded at 126 times the next 12-month earnings vs. a P/E of 157 three months ago

Press Release: ID:nBw3ysSxWa