Cava reports healthy profits as steak launches and sales growth send shares to record high

Cava (CAVA) offers tasty figures to its investors.

After the market closed Thursday, the Mediterranean fast-food chain reported second-quarter results that beat estimates for revenue, profit and same-store sales.

Net revenue jumped 35.2% year over year to $233.5 million, versus expectations of $219 million. Adjusted earnings per share were $0.17, versus expectations of $0.13.

Same-store sales jumped 14.4%, more than the 7.45% Wall Street expected. Sales growth was driven by increased foot traffic, up 9.5% from a year earlier, new locations and the launch of grilled steak June 3.

CEO Brett Schulman said on the earnings call that the steak far exceeded his expectations. The company is at the “crossroads of consumer convergence” as it positions itself behind fine dining but ahead of fast food.

“At a time when consumers are increasingly feeling the pressure of an uncertain economy and are more discerning about where and how they spend their money, they are choosing to dine at Cava,” he said.

Wedbush analyst Nick Setyan said he expects “an acceleration in transaction trends over the two-year period, primarily driven by the launch of steak.”

On Wednesday, Cava shares hit a record closing high of $102.39 and on Thursday, an intraday high of $104.84. In after-hours trading, the stock jumped as high as $112.

Shares are up more than 140% year-to-date, compared with 19% for Chipotle (CMG) and 17% for the S&P 500 (^GSPC).

Cava has taken a slow but gradual approach to growth. By 2032, the company plans to open 1,000 Cava locations.

Citi analyst Jon Tower said in a note to clients that there is still room for growth. “A unit growth opportunity that continues to redefine discrete same-store sales, pricing and margin opportunities as the system becomes denser and margins strengthen as the footprint shifts to lower-cost markets.”

In the second quarter, Cava opened 18 new establishments, bringing the total to 341. This figure compares to 14 new establishments in the first quarter.

Cava continues to perform at a time when fast-casual dining appears to be weathering a broader slowdown across the food industry as consumers double down on value.

“Cava is one of the few publicly traded restaurant brands to deliver positive traffic growth in the second quarter,” Schulman said. “We believe our performance reflects our unique and compelling value proposition.”

Chipotle beat expectations in its report, after comparable store sales jumped 11.1% year over year, beating Wall Street’s expectations of 9.23%. Shake Shack (SHAK) saw comparable store sales climb 4%, beating expectations of 3.2%.

The story continues

Sweetgreen (SG) reported its best same-store sales growth in two years, up 9%, driven by increased foot traffic and pricing.

Its CEO, Jonathan Neman, told Yahoo Finance that “we’re going to be very judicious in how we use it (pricing power).” Neman said the chain has suffered fewer price hikes than its competitors…