Cava shares surge on fourth quarter earnings beat

Cava (NYSE:CAVA) saw its shares emergence sharply aft reporting fiscal 4th fourth results that exceeded Wall Street expectations and issuing a affirmative maturation forecast for 2026.

For the 4th ended December 28, the fast-casual Mediterranean concatenation posted net per stock of $0.04, supra analysts’ estimates of $0.03.

Revenue came successful astatine $275 million, besides exceeding the expected $268 million.

Same-store income (SSS) grew 0.5% successful the period, reversing expectations of a 1.1% decline, driven chiefly by paper pricing and merchandise mix, though ft postulation fell 1.4%.

Cava opened 24 caller restaurants during the quarter, contributing to a 21.2% year-over-year summation successful gross to $272.8 million.

Restaurant-level nett roseate 15.7% to $58.3 million, with a borderline of 21.4%, portion integer income accounted for 38.9% of full revenue.

Net income was $4.9 million, and adjusted EBITDA reached $25.8 million, somewhat supra the prior-year quarter.

Looking ahead, Cava anticipates opening 74 to 76 caller restaurants successful fiscal 2026, with same-store income expected to emergence 3% to 5% and restaurant-level nett margins betwixt 23.7% and 24.2%.

Pre-opening costs are projected astatine $19.5 cardinal to $20 million, and adjusted EBITDA is expected successful the scope of $176 cardinal to $184 million.

Analysts astatine Jefferies highlighted the quarter’s upside, noting that “Q4 SSS & EBITDA bushed with underlying request showing done meaningfully,” and that the betterment successful one-year trends could easiness capitalist concerns amid slower adjacent performance.

They wrote that upcoming initiatives, including the motorboat of a Salmon paper item, operational investments, and enhancements to impermanent acquisition and store operations, “should render the 3% to 5% same-store income usher progressively blimpish done 2026.”

The analysts besides noted that portion the company’s EBITDA guidance was somewhat beneath statement astatine the midpoint, it reflects some expected commodity and wage inflation, arsenic good arsenic investments successful store operations.

They concluded that Cava “remains 1 of the fistful of investable maturation concepts wrong restaurants wherever determination is simply a bully grade of visibility into the semipermanent maturation algorithm” and reiterated a ‘Buy’ standing with an $85 terms target.

Cava sharesa traded up astir 21% astatine astir $82 connected Wednesday morning.