Cava Succeeding by Defying Restaurant Industry Trends

Dow Jones
3 hours ago

1455 ET - In a restaurant industry that's highly promotional, Cava stands out as a player with broad-based strength across the sector, including geographies and income cohorts--with outsized growth among lower-income customers, according to William Blair in a note. Analysts Sharon Zackfia and Tania Anderson say customers are flocking to the fast-casual Mediterranean chain for its everyday value, helping it post better-than-expected 9% 2Q comparable sales growth, the majority of which came from a traffic boost. Cava has underpriced inflation since 2019, they add. What's more, they say "new unit productivity remains stellar, with new unit sales at or greater than the systemwide average across all geographies, formats, and markets." They say it suggests Cava has the opportunity to become a much larger brand versus its nearly 480 units today.

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