By Neil J Kanatt
Aug 11 (Reuters) - Cava Group on Tuesday beat Wall Street expectations for second-quarter sales and core profit, helped by demand for its affordable Mediterranean food, sending its shares up about 12% in extended trading.
Here are more details:
• The restaurant chain known for its customizable offerings said a multistate cyclosporiasis outbreak in July, which made consumers wary of eating out, hit sales, although it added it did not use ingredients associated with either outbreak.
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"As we exited (the second quarter), the broader concerns around leafy greens and produce consumption did impact our sales, which we have seen begin to rebound," CEO Brett Schulman told Reuters, adding that Cava was not impacted by the recent salmonella outbreak.
• For the second quarter ended July 12, same-restaurant sales rose 9%, topping analysts' estimates of 7.63%, according to data compiled by LSEG. Guest traffic grew 5.3%.
• Quarterly revenue jumped 31.3% to $365.4 million, above expectations of $360.5 million, while adjusted EBITDA rose 30% to $54.7 million, topping estimates of $52.1 million.
• Cava's upbeat results come even as major U.S. fast-food chains struggle to attract price-conscious diners, with discounts no longer enough to drive traffic.
• The chain also rolled out new menu items, including harissa barbecue pita chips and pomegranate-glazed salmon to draw in more diners.
• The chain reiterated its fiscal 2026 forecast for same-restaurant sales growth of 4.5% to 6.5% and adjusted EBITDA of $181 million to $191 million.
• Schulman said the unchanged forecasts reflect uncertainty over recent food safety issues, a "fluid" macroeconomic and geopolitical backdrop, and lingering inflation, including higher gas prices.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Diti Pujara)
