CAVA Group (NYSE:CAVA) shares jumped 12.7% after the fast-casual chain beat second-quarter estimates on both revenue and earnings, with same-restaurant sales climbing 9% and easing investor concerns over a recent cyclospora-linked slowdown in the sector.
Revenue rose 31.3% year-over-year to $365.4 million, topping estimates of $361 million, while adjusted earnings per share came in at $0.19, ahead of the $0.18 consensus. Guest traffic increased 5.3%, the company said.
Adjusted EBITDA rose 30% to $54.7 million, beating estimates of $52.1 million, and net income increased 25.3% to $23 million versus estimates of $21.9 million.
Restaurant-level profit rose 28.1% to $93.8 million, though restaurant-level profit margin slipped 60 basis points to 25.7%.
The company opened 17 net new restaurants in the quarter, bringing its total to 476, and reported free cash flow of $44.8 million. Digital sales made up 39% of revenue.
CAVA affirmed its full-year guidance, projecting adjusted EBITDA of $181 million to $191 million, same-restaurant sales growth of 4.5% to 6.5%, and restaurant-level profit margin of 23.7% to 24.3%. The company still expects to open 75 to 77 net new restaurants this year, with pre-opening costs of $22 million to $22.5 million.
Analysts at Jefferies said quarter-to-date trends were better than feared, with cyclospora-related headwinds moderating after same-restaurant sales bottomed in the "flat to slightly positive" range in mid-to-late July before recovering toward mid-single-digit percentage growth in the most recent week.
Jefferies attributed the traffic gains partly to the launch of a glazed salmon menu item, which is set to run through year-end, alongside continued demand across income cohorts and higher spending on premium items, sides and beverages.