Cava Group Inc. wrapped its first year as a public company with double-digit traffic growth and a swing to profitability. But projections for fiscal 2024 are more modest as the chain laps its stellar results.
The Washington, D.C.-based fast-casual chain reported same-store sales up 18% for the year—surpassing its guidance—including traffic growth of 10.4%.
Revenue grew by nearly 60% to $717.1 million, boosted in part by the opening of 72 restaurants, including 28 remaining former Zoe’s Kitchen locations that were converted to Cava, for a total of 309.
Net income for the year was $13.3 million, compared to a net loss of $59 million in fiscal 2022.
CEO Brett Schulman called it a landmark year for the company, which went public in June following a successful initial public offering that nearly doubled its stock price on opening day.
For fiscal 2024, however, the company expects more “normalized” same-store sales growth of between 3% and 5%. The company also expects to open between 48 to 52 new restaurants this year. Schulman said the company is targeting a unit-growth rate of about 15% as it steams toward a goal of reaching 1,000 units by 2032.
For the Dec. 31-ended fourth quarter, same-store sales were up 11.4%, which was driven by a 6.2% increase in traffic and 5.2% from menu price increases and product mix.
Net income for the quarter was $2 million, compared with a net loss of $18.8 million a year ago.
Schulman has credited results in part to the chain’s efforts to hold back menu price increases, calling it an “investment in the guest.” In the first quarter this year, Cava increased menu prices 2.5% to 3%, but he said that is expected to be it for the year.
Unlike most chains that operate in California, Cava is not expecting to take outsized menu price hikes to accommodate the fast-food wage, which will be increasing to $20 per hour in April. Schulman said the company’s guidance for the full year reflects a 30-basis-point impact on restaurant margins as a result.
The company is projecting restaurant-level margins between 22.7% to 23.3% for fiscal 2024.
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