If you told me a year ago that a Mediterranean-inspired, fast-casual joint would be running laps around the likes of McDonald’s and Chipotle, I would’ve told you to lay off the pita bread. After all, I ate at one of these CAVA joints down in Boynton Beach, Florida, back in 2020, and to be honest, I wasn’t all that impressed. 

But here we are, and suddenly CAVA’s the new prom queen, prancing down the hallway while everyone else wonders what the heck just happened.

(Source: Toast)

So, what’s all the fuss about? Well, last night, CAVA Group dropped its Q2 earnings report, and not only did the company beat all of the biggest Wall Street suits expectations, but they also left most of the fast-food industry looking like they need to hit the gym.

Let’s break it down: CAVA dropped a revenue bomb of $231.4 million, up 35% from the same quarter last year and beating analyst expectations of $219.5 million. Earnings per share came in at $0.17, four cents above what the experts predicted.

Net income? Nearly $20 million, compared to $6.5 million last year (that’s a 207% year-over-year gain). So, yeah, you could say things are going pretty well over at CAVA HQ.

Now, let’s dive into same-store sales because this is where it gets interesting. With each CAVA location valued at $34.1 million, expectations were sky high, and they didn’t disappoint. Same-store sales grew by 14.4%, outpacing expectations for an 8.2% increase. Sure, it’s a slowdown from last year’s 18.2%, but given that most restaurant chains are praying for anything above flat, this is the kind of performance that makes CEO Brett Schulman sleep like a baby.

But how do we know people are actively choosing Mediterranean cuisine over their usual fast-food haunts? Well, traffic was also up 9.5%, so clearly, something’s working. Maybe it’s the new steak option they launched, which apparently has folks lining up like it’s the latest iPhone drop. Or maybe it’s the fact that CAVA lets you feel a little bougie—like you’re making a healthy choice while still indulging in something delicious.

All this success is reflected in CAVA’s stock price, which has been on a tear since the company’s red-hot IPO in 2023. Shares nearly doubled on their first day of trading, and they’ve been on an upward trajectory ever since, currently hovering above the $100 mark. Year to date, the stock is up 188%, a number that’s making Chipotle look like it’s stuck in a bear market, especially now that they’ve lost their star CEO thanks to Starbucks backing up the Brinks truck.

CEO Brett Schulman, the guy who’s been running the show since it was a little-known spot in Maryland, is feeling pretty good about the future. The company plans to open 54 to 57 new locations this year, up from previous guidance. And they’re not just stopping there—by 2032, they aim to have 1,000 locations. If that doesn’t make the competition sweat, I don’t know what will.

(Source: CNBC)

In addition to slapping more CAVA locations on the map, he’s also working on implementing AI systems to help cut down on food waste to add even more cheddar feta to the bottom line. And with the stock already up 16% today, it’s clear investors are taking notice. So, if you’re hunting for a stock that’s shaking things up, CAVA might be worth putting on your radar. But hey, don’t forget to check those sky-high valuations first—because while the potential here is enticing, it’s definitely not coming at a bargain.

Stock.News has positions in McDonald’s and Starbucks.