CAVA Group (CAVA, Financial) surged 11% following its Q3 earnings announcement, where it surpassed expectations for both EPS and revenue. The Mediterranean fast-casual restaurant chain increased its FY24 adjusted EBITDA forecast to $121-126 million from $109-114 million and significantly raised its FY24 comparable sales guidance to 12-13% from 8.5-9.5%. Additionally, it plans to open 56-58 new locations, up from the previous 54-57.

• Comparable sales jumped 18.1%, surpassing Q2's 14.4%, driven by a 12.9% increase in guest traffic and a 5.2% rise in menu price and product mix. This indicates strong customer retention across all demographics and locations.
• CAVA's steak offering continues to perform well months after its national launch. The company also introduced a new pita chip flavor and an early-released loyalty rewards program, both receiving positive feedback. Brand awareness has grown by 8 percentage points since its IPO.
• In Q3, CAVA opened 11 new restaurants, totaling 352 locations. Following its successful entry into Chicago, CAVA plans to expand into South Florida by early next year and add two new Midwest markets in 2025. The 2024 openings are exceeding expectations, reinforcing confidence in its brand's scalability.

CAVA positions itself as a leader in Mediterranean cuisine, aiming to define this emerging cultural category in the U.S. The brand capitalizes on modern consumers' desire for bold flavors and health-conscious options, with growth accelerating in each market.

The strong Q3 performance mirrors Q2's results, with positive EPS/revenue, robust comparable sales, and increased guidance. While many restaurant chains struggle and focus on value offerings, CAVA bucks the trend with impressive sales across all income levels. This growth trajectory is reminiscent of early-stage Chipotle (CMG, Financial), though CAVA shares may currently be overextended.