CAVA Reports Q3 Same-Store Sales Miss, Raises Full-Year Sales Guidance
CAVA’s third-quarter same-store sales growth was 3.1%, below expectations of 3.3%. The company raised full-year same-store sales guidance to 6.0%-7.0% from 4.5%-6.5%, while narrowing adjusted EBITDA guidance to $184-$189 million.
Shares of CAVA Group Inc (NYSE: CAVA ) tanked in early trading on Thursday, after the company reported its third-quarter results. Here are some key analyst takeaways: TD Cowen analyst Andrew Charles maintained a Buy rating but cut the price target from $78 to $76. KeyBanc Capital Markets analyst Christopher Carril reaffirmed an Overweight rating and lowered the price target from $80 to $75. DA Davidson analyst Matt Curtis reiterated a Neutral rating and reduced the price target from $75 to $60.
Check out other analyst stock ratings. TD Cowen: CAVA experienced a slowdown in customer spending. However, this was limited to about two weeks in mid-September. Sales and customer traffic have already recovered so far in the fourth quarter, Charles said in a note.
The analyst cited four organic drivers to reaccelerate traffic: Operations Marketing Menu innovation Catering He projected fourth-quarter same-store sales growth of 4.5%, "following management’s disclosure that comps strengthened as mid-September’s gas-price-related choppiness subsided, with momentum continuing into 4Q." KeyBanc Capital Markets: CAVA reported same-store sales growth of 3.1%, missing Street expectations of 3.3%, Carril said. The company cited headwinds from cyclospora concerns early in the third quarter and some pressure following Labor Day as gas prices spiked, he added.
With the pressure on third-quarter trends being external to the company, CAVA witnessed an improvement in sales exiting the third quarter and into the fourth quarter, the analyst stated. Estimates had been adjusted to reflect management’s revised guidance, "which we view as potentially conservative," he further wrote. DA Davidson: CAVA’s third-quarter results modestly missed consensus, while management raised full-year same-store sales guidance with trends already improving, Curtis said. The full-year same-store sales guidance was raised from 4.5%-6.5% to 6.0%-7.0%, encompassing consensus projections, the analyst stated.
He added, however, that the adjusted EBITDA guidance was narrowed to $184-$189 million, below consensus, due to "incremental restaurant-level margin pressure and higher pre-opening costs." CAVA Price Action: CAVA shares had declined by 10.02% to $55.48 at the time of publication on Thursday. Read Also: CAVA CEO Points to Fresh Produce Concerns, Gas Prices Behind Traffic Slowdown Image: Shutterstock