CAVA Q3 revenue up 20% on new restaurant openings

Overview

• CAVA fiscal Q3 revenue grows 20% yr/yr nearly misses analyst expectations

• Company opened 17 net new restaurants, increasing total count by 17.9% yr/yr

• CAVA restaurant-level profit margin decreased to 24.6% due to higher operating costs

Outlook

• CAVA Group lowers full-year same restaurant sales growth forecast to 3.0%-4.0%

• Company revises full-year adjusted EBITDA guidance to $148.0-$152.0 mln

• CAVA Group expects full-year restaurant-level profit margin of 24.4%-24.8%

Result Drivers

• NEW RESTAURANT OPENINGS - Revenue growth driven by 74 net new restaurant openings exceeding expectations

• SAME RESTAURANT SALES - 1.9% growth driven by menu price and product mix, with flat guest traffic

• PROFIT MARGIN DECLINE - Decrease to 24.6% due to higher delivery, insurance, food, and wage costs

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 14 "strong buy" or "buy", 9 "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 $82.50, about 36.2% above its November 3 closing price of $52.61

• The stock recently traded at 82 times the next 12-month earnings vs. a P/E of 136 three months ago

Press Release: ID:nBw1bJ5rna

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