What a year for Cava.
The Washington, D.C.-based chain said Tuesday same-store sales grew 13.4% for the year, with 8.7% of that attributed to traffic. That was lapping a 17.9% same-store sales increase in fiscal 2023 for two-year comparable sales topping 31%. With same-store sales expected to be in the 6% to 8% this year on top of that, the company is expecting a three-year stack in the high 30% range.
Revenue for fiscal 2024 increased 33.1% to $954.3 million. Net income grew 278% to $130.3 million. And the chain added 58 new restaurants (unit growth of more than 18%) for a total of 367 restaurants across 25 states and the District of Columbia, and the chain moved into the Chicago market for the first time. Another 62 to 66 are expected to open this year, including new markets of Detroit and Indianapolis, as well as Pittsburgh and South Florida, as the chain pushes to reach 1,000 units by 2032.
And the year ended big.
For the Dec. 29-ended fourth quarter, same-store sales grew 21.2%, including a 15.6% increase in traffic that has remained robust into the first quarter this year.
Net income for the quarter was $78.6 million, up from $2 million a year ago, and restaurant-level margins increased 50 basis points to 22.4% (excluding an extra week in 2023).
“It is clear that our unique value proposition, the quality and relevance of our Mediterranean cuisine, the convenience of our multi-channel format and the experiences we provide across our physical and digital channels is meeting the moment for the modern consumer,” said CEO Brett Schulman.
Still, the chain’s stock took a slight tumble as the earnings report failed to meet some Wall Street expectations.
Cava’s results come as quick-service and casual-dining chains struggle to address flagging traffic numbers.
Schulman said Cava’s guests have proven resilient, but the brand has also kept menu price increases to a minimum. Menu prices increased 1.7% in January, but that will be it for the year, he said.
From the end of 2019 to the end of 2024, Schulman said Cava has raised prices in aggregate about 15%, while the Consumer Price Index was up 23% during that period, and fast-food price increases were in the high 30% range.
“I feel like we’ve kind of created a bit of a port in the inflation storm for our guests where they can come and find a respite from that and really find great value,” he said.
The addition of grilled steak last year exceeded expectations, and it has become a permanent menu item, Schulman said. A limited-time Garlic Ranch flavor of the chain’s popular pita chips was also a hit, and more flavor innovation is coming with that product this year.
And Cava is expanding on its Connected Kitchen initiative, which has several facets of tech investments over multiple years.
This year, for example, the test of a new Kitchen Display System for the digital makeline in 25 units will expand to 250 units before year’s end, a move that has helped boost both speed and accuracy.
And the chain also plans to expand the pilot of a new camera AI system, now in four restaurants, which is designed to ease operations and give restaurant teams a better picture of how much to cook and prep and when, and reduce waste.
Cava also relaunched its loyalty program last year, which so far has brought a 230-basis-point increase in revenue generated through rewards members to 2.3%. The new program lowered the bar for redemption of some items, like the Garlic Ranch pita chip limited-time offer, which was available for 200 rewards points, rather than 400.
It was the most redeemed item ever, Schulman said.
This year, Cava plans to add more features, like tiered status levels and non-food rewards to generate excitement.
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