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CAVA Group (CAVA) Q1 Earnings & Revenues Beat Estimates
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CAVA Group, Inc. (CAVA - Free Report) reported fiscal first-quarter 2024 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate for the fourth straight time.
Thanks to CAVA Group’s versatile Mediterranean concept and strong economic model, the company achieved its fourth straight quarter of net income and, for the first time, positive free cash flow. The company’s results also benefited from robust same restaurant sales.
Earnings & Revenues Discussion
The company reported adjusted earnings per share of 12 cents, beating the consensus estimate of 4 cents. In the prior-year quarter, the company had reported adjusted loss per share of $1.30.
The company’s revenues increased 27.5% year over year to $259 million. The metric also surpassed the Zacks Consensus Estimate of $247 million. The increase in revenues can be primarily attributed to 86 new restaurant openings during or after the first quarter of fiscal 2023, and these new locations are performing better than the company’s expectation.
CAVA's same restaurant sales grew by 2.3%, driven by a 3.5% rise due to higher menu prices and changes in product mix, which was slightly offset by a 1.2% decline in guest traffic.
CAVA Group, Inc. Price, Consensus and EPS Surprise
General and administrative expenses amounted to $33.8 million, or 13.1% of revenues, compared to $29 million, or 14.3% of revenues, in the first quarter of fiscal 2023.
Excluding equity-based compensation, these expenses were $28.7 million, or 11.1% of revenues, compared with $27.8 million, or 13.7% of revenues, in the same period last year. This 260-basis point decrease was mainly due to higher performance-based incentive compensation in the prior year and greater leverage from increased sales.
The company reported adjusted EBITDA of $33.3 million, or 12.9% of revenues, an increase of $16.6 million, or 99%, compared to the first quarter of fiscal 2023.
Margin
CAVA's restaurant-level profit margin was 25.2%, slightly down from 25.4% in the first quarter of fiscal 2023. This slight decline was primarily due to increased wage investments, which were partially offset by reduced costs for food, beverages, and packaging as a percentage of revenues, thanks to higher sales and lower input costs.
Balance Sheet
As of Apr 21, 2024, the company had cash and cash equivalents of $329.1 million compared with $332.4 million as of Dec 31, 2023.
Total liabilities at the end of the fiscal first quarter were $424.3 million compared with $413 million reported at 2023-end.
Outlook
The company expects net new CAVA restaurant openings in the range of 50-54. It now anticipates same restaurant sales in the range of 4.5-6.5%, up from the prior estimate of 3% to 5%. CAVA restaurant-level profit margin is expected between 23.7% to 24.3%, up from the earlier estimate of 22.7% to 23.3%. Adjusted EBITDA is expected in the range of $100 million to $105 million, up from the prior estimate of $86 million to $92 million.
The Zacks Consensus Estimate for WING’s 2024 sales and earnings per share (EPS) suggests a rise of 27.5% and 36.7%, respectively, from the year-ago levels.
Brinker International, Inc. (EAT - Free Report) carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 213.4%, on average. EAT’s shares have risen 82.1% in the past year.
The Zacks Consensus Estimate for EAT’s 2024 sales and EPS indicates 5% and 39.2% growth, respectively, from the year-earlier actuals.
El Pollo Loco Holdings, Inc. (LOCO - Free Report) carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 19.4%, on average. LOCO’s shares have risen 13.6% in the past year.
The Zacks Consensus Estimate for LOCO’s 2025 sales and EPS indicates 3.8% and 9.4% growth, respectively, from the prior-year figures.
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CAVA Group (CAVA) Q1 Earnings & Revenues Beat Estimates
CAVA Group, Inc. (CAVA - Free Report) reported fiscal first-quarter 2024 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate for the fourth straight time.
Thanks to CAVA Group’s versatile Mediterranean concept and strong economic model, the company achieved its fourth straight quarter of net income and, for the first time, positive free cash flow. The company’s results also benefited from robust same restaurant sales.
Earnings & Revenues Discussion
The company reported adjusted earnings per share of 12 cents, beating the consensus estimate of 4 cents. In the prior-year quarter, the company had reported adjusted loss per share of $1.30.
The company’s revenues increased 27.5% year over year to $259 million. The metric also surpassed the Zacks Consensus Estimate of $247 million. The increase in revenues can be primarily attributed to 86 new restaurant openings during or after the first quarter of fiscal 2023, and these new locations are performing better than the company’s expectation.
CAVA's same restaurant sales grew by 2.3%, driven by a 3.5% rise due to higher menu prices and changes in product mix, which was slightly offset by a 1.2% decline in guest traffic.
CAVA Group, Inc. Price, Consensus and EPS Surprise
CAVA Group, Inc. price-consensus-eps-surprise-chart | CAVA Group, Inc. Quote
Operating Results
General and administrative expenses amounted to $33.8 million, or 13.1% of revenues, compared to $29 million, or 14.3% of revenues, in the first quarter of fiscal 2023.
Excluding equity-based compensation, these expenses were $28.7 million, or 11.1% of revenues, compared with $27.8 million, or 13.7% of revenues, in the same period last year. This 260-basis point decrease was mainly due to higher performance-based incentive compensation in the prior year and greater leverage from increased sales.
The company reported adjusted EBITDA of $33.3 million, or 12.9% of revenues, an increase of $16.6 million, or 99%, compared to the first quarter of fiscal 2023.
Margin
CAVA's restaurant-level profit margin was 25.2%, slightly down from 25.4% in the first quarter of fiscal 2023. This slight decline was primarily due to increased wage investments, which were partially offset by reduced costs for food, beverages, and packaging as a percentage of revenues, thanks to higher sales and lower input costs.
Balance Sheet
As of Apr 21, 2024, the company had cash and cash equivalents of $329.1 million compared with $332.4 million as of Dec 31, 2023.
Total liabilities at the end of the fiscal first quarter were $424.3 million compared with $413 million reported at 2023-end.
Outlook
The company expects net new CAVA restaurant openings in the range of 50-54. It now anticipates same restaurant sales in the range of 4.5-6.5%, up from the prior estimate of 3% to 5%. CAVA restaurant-level profit margin is expected between 23.7% to 24.3%, up from the earlier estimate of 22.7% to 23.3%. Adjusted EBITDA is expected in the range of $100 million to $105 million, up from the prior estimate of $86 million to $92 million.
The company currently has a Zacks Rank #2 (Buy).
Other Key Picks
Wingstop Inc. (WING - Free Report) sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter negative earnings surprise of 21.4%, on average. The stock has surged 93.5% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for WING’s 2024 sales and earnings per share (EPS) suggests a rise of 27.5% and 36.7%, respectively, from the year-ago levels.
Brinker International, Inc. (EAT - Free Report) carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 213.4%, on average. EAT’s shares have risen 82.1% in the past year.
The Zacks Consensus Estimate for EAT’s 2024 sales and EPS indicates 5% and 39.2% growth, respectively, from the year-earlier actuals.
El Pollo Loco Holdings, Inc. (LOCO - Free Report) carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 19.4%, on average. LOCO’s shares have risen 13.6% in the past year.
The Zacks Consensus Estimate for LOCO’s 2025 sales and EPS indicates 3.8% and 9.4% growth, respectively, from the prior-year figures.