Nov 13 Reuters Restaurant chain Cava39;s stock soared nearly 17 to 169.40 in premarket trading on Wednesday, after it exceeded thirdquarter earnings estimates on strong demand for its Mediterranean fare such as pita chips and grilled steak.
Fastcasual restaurants like Cava, Shake Shack and Sweetgreen, which offer salad bowls and cheeseburgers as well as dining space, have grown in popularity this year as customers traded up from fastfood chains amid runaway prices.
Cava has witnessed a 28.4 growth in traffic this year till September, while McDonald39;s and Restaurant Brandsowned Burger King saw customer visits decline 0.4 and 0.9, respectively, according to data from Placer.ai.
Cava also continues to benefit from the consumer preference shift from quick service to fast casual as middle income consumers increasingly view fast casual as a better value for money, TD Cowen analyst Andrew Charles said in a note.
The chain raised its annual forecasts for the third time in 2024 when it reported thirdquarter results after market close on Tuesday. Its stock has more than tripled in value this year.
The company39;s percentage of sales contribution from a revamped loyalty program jumped 200 basis points in the reported quarter. It has also invested in improving its inrestaurant channels, which make up roughly 65 of the total guest count.
Its samerestaurant sales rose 18.1, driven by a 12.9 increase from guest traffic and a 5.2 increase from menu prices and product mix….