Cava Group ticks higher on surprise profit, strong same-restaurant sales in Q4

Investing.com -- CAVA Group Inc (NYSE:CAVA) reported a surprise fourth-quarter profit on Tuesday and better-than-expected same-restaurant sales.

The company's shares added 2% in premarket trading Wednesday. 

The company reported earnings per share of $0.05 for the quarter ended Dec. 31, topping analysts’ average estimate of a loss of $0.01.

Revenue came in at $225.1 million, above analysts’ expectations of $193.41 million.

Cava's same-restaurant sales climbed 21.2% in the quarter, also exceeding estimates of 18.2%. The outperformance was driven by 15.6% traffic growth and a 5.6% average check.

"The strong performance demonstrates that increased brand awareness coupled with product innovation, productivity improvements, and an engaging loyalty program are bearing fruit," Stifel analysts said.

Looking ahead, Cava forecasts 2025 (FY25) same-restaurant sales to rise 6% to 8%, missing the average analyst projection of an 8.17% rise, according to data compiled by LSEG.

Morgan Stanley (NYSE:MS) analysts said the print "supports the stock and the fundamental narrative, though CAVA remains a high multiple stock and the recent challenges for growth/momentum names exist somewhat separately from these fundamentals."

"Upward estimate revisions not likely here, but start of FY25 sounds relatively solid, which is encouraging, and probably supports the view that '25 can be another good year," they noted. 

Pratyush Thakur contributed to this report.