CAVA group shares up 8% premarket after EPS beat, sales beat and raises guidance

CAVA group shares up 8% premarket after EPS beat, sales beat and raises guidanceCAVA Group Inc. (CAVA) reported impressive financial results for the first quarter of fiscal 2024, causing the Mediterranean fast-casual restaurant chain's shares to surge 8% in pre-market trading. The company's strong earnings beat, sales beat, and raised guidance served as catalysts for the positive market reaction.CAVA's revenue for the quarter grew by an impressive 30.3% year-over-year to $256.3 million, surpassing the consensus estimate of $245.9 million [1]. The company reported earnings per share (EPS) of 12 cents, exceeding analyst expectations of 5 cents per share [1]. Net cash provided by operating activities amounted to $38.4 million, and the company generated $4.7 million of free cash flow during the quarter [1].Same-restaurant sales growth remained steady at 2.3%, with the company opening 14 new restaurants during the quarter, bringing the total number of locations to 323 [1]. This represents a 22.3% increase in total locations compared to the same period last year.Brett Schulman, co-founder and CEO of CAVA Group, expressed his satisfaction with the results, stating, "CAVA's results in the first quarter demonstrate the strength of our category-defining brand, our clear leadership position in Mediterranean, and our compelling differentiated value proposition" [1]. He also mentioned that the company is investing in scalable infrastructure to support its growth and is well-positioned to capture the significant whitespace opportunity ahead.CAVA's guidance for the full year includes expected same-restaurant sales growth between 4.5% and 6.5%, up from a prior range of 3% to 5% [1]. Full-year adjusted EBITDA is projected to be between $100 million and $105 million, an increase from a prior range of $86 million to $92 million [1]. The company plans to open between 50 and 54 new restaurants throughout 2024.Investors seem to be confident in CAVA's future prospects, as evidenced by the 91% year-to-date increase in the company's shares prior to the print [2]. Despite a brief post-earnings decline, CAVA shares remain a promising investment opportunity for those interested in the Mediterranean fast-casual segment.[1] Benzinga. (2024, May 24). CAVA Group Q1 Earnings, Revenue Beat, EPS Beat, Guidance Raise - Continued Investments in Scalable Infrastructure. Benzinga. https://www.benzinga.com/news/earnings/24/05/39046904/cava-group-q1-earnings-revenue-beat-eps-beat-guidance-raise-continued-investments-in-scalable-infra[2] CAVA Group. (2024, May 24). CAVA Group Reports First Quarter 2024 Results. CAVA Group. https://investor.cava.com/news/news-details/2024/CAVA-Group-Reports-First-Quarter-2024-Results/default.aspx