Prospects arrive at a Cava restaurant in New York Metropolis on June 22, 2023.
Brendan Mcdermid | Reuters
Cava on Tuesday lowered its full-year forecast for same-store gross sales development after a disappointing second quarter.
For the complete yr, Cava now anticipates same-store gross sales development of 4% to six%, down from its prior vary of 6% to eight%.
Shares of the corporate plunged greater than 20% in prolonged buying and selling. The inventory has fallen 40% this yr, together with the after-hours transfer.
Here is what the corporate reported in contrast with what Wall Road was anticipating, primarily based on a survey of analysts by LSEG:
- Earnings per share: 16 cents vs. 13 cents anticipated
- Income: $280.6 million vs. $285.6 million anticipated
The restaurant firm reported second-quarter web revenue of $18.4 million, or 16 cents per share, down from $19.7 million, or 17 cents per share, a yr earlier.
Web restaurant gross sales climbed 20% to $278.2 million, largely due to new restaurant openings.
The chain’s same-store gross sales, a metric that solely tracks the efficiency of eating places which were open a minimum of a yr, rose 2.1% in the course of the quarter. Whereas Cava managed to buck the trade development of same-store gross sales declines, Wall Road was projecting development of 6.1%, in accordance with StreetAccount estimates.
Cava stated its quarterly visitors was “roughly flat.” A yr earlier, the corporate’s same-store gross sales climbed 14.4%, fueled by practically double-digit visitors development. On the time, Cava CEO and co-founder Brett Schulman credited the introduction of its grilled steak possibility as one purpose prospects saved coming to eating places in the course of the quarter.
CFO Tricia Tolivar informed CNBC on Tuesday that the second quarter began off with robust same-store gross sales development, which led the corporate to reiterate its prior outlook when it reported its first-quarter outcomes. Nevertheless, she stated, as soon as the chain celebrated the one-year launch of grilled steak, it noticed that development sluggish.
Rival fast-casual chains have additionally struggled this quarter with slumping gross sales. Chipotle Mexican Grill reported same-store gross sales declines of 4%, whereas salad chain Sweetgreen noticed its inventory plummet after the corporate reduce its outlook for the second straight quarter.
Other than reducing its same-store gross sales forecast, Cava reiterated different key monetary projections for the complete yr. The corporate nonetheless anticipates adjusted earnings earlier than curiosity, taxes, depreciation and amortization of $152 million to $159 million. Cava additionally maintained its forecast for restaurant-level revenue margins of 24.8% to 25.2%.
Cava on Tuesday additionally introduced that it participated in a $25 million Sequence B funding spherical for Hyphen, which automates plate and bowl portioning. Chipotle Mexican Grill, which has already invested in Hyphen, led the funding spherical with Cava.
“By piloting Hyphen’s automated digital makeline, we’ve the chance to extend order accuracy and pace throughout peak digital hours, whereas decreasing complexity for our workforce members,” Schulman stated in an announcement.
