Cava seems to be in a savory spot ahead of its Q2 earnings report.
After market close on Thursday, the Mediterranean fast-casual chain is expected to report a nearly 27% jump in net sales to $219 million, while adjusted earnings are expected to come in at $0.13.
Same-store sales are expected to increase 7.45%, driven by higher foot traffic and a successful launch of Grilled Steak, which Stifel analyst Chris O'Cull said "sold out quickly in many markets."
Wedbush analyst Nick Setyan said it expects "accelerating two-year transaction trends, led most importantly by the launch of steak."
On Wednesday, Cava shares hit a new record of $102.39. Shares are up more than 140% year to date, compared to 20% for Chipotle (CMG) and 19% for the S&P 500 (^GSPC).
O'Cull said, "We recommend investors take advantage of any volatility created by short-term sentiment disruptions because the fundamentals remain solid," raising its price target to $110.
Slow and steady is Cava's go-to approach to expansion. By 2032, the company plans to have 1,000 Cava locations.
Citi analyst Jon Tower said there's still room left for growth in a note to clients. "A unit growth opportunity that continues to re-set higher, discrete same-store sales, price, and margin opportunities as the system densifies and margin tailwinds as the footprint shifts towards lower cost markets."
In Q1, the company opened 14 new locations, bringing the total to 323.
Cava continues to grow, at a time when fast-casual dining seems to be bucking a broader slowdown across the food industry as consumers double down on value.
Its CEO Brett Schulman recently told Yahoo Finance's Morning Brief that the chain is seeing "consistent strength across all income segments."
"We're able to deliver that unique Mediterranean cuisine where tastes and health unite and do it at a reasonable price," he said.
Chipotle blew past expectations in its reportafter same-store sales jumped 11.1% year over year, versus the 9.23% Wall Street anticipated. Shake Shack (SHAK) saw same-store sales climb 4%, beating estimates of 3.2%.
Sweetgreen (SG) reported its best same-store sales growth in two years, up 9%, driven by higher foot traffic and prices.
Its CEO, Jonathan Neman, told Yahoo Finance that "we're going to be very judicious in how we use it [pricing power]." Neman claimed the chain took fewer price hikes than its rivals since the pandemic.
"As you look at the relative pricing difference between Sweetgreen, some of our fast-casual competitors and then QSR, the gap has really narrowed. QSR, you can't get in and out of there for under $15 today," he told Yahoo Finance.
Here's what Wall Street expects from Cava's Q2 report, compared to its Q2 report last year:
Revenue: $219.5 million, compared to $172.89 million
Adjusted earnings per share: $0.13, compared to $0.35
Same-store sales growth: 7.45%, compared to 18.20%
In Q1, the company raised its sales growth guidance to 4.5% to 6.5%, compared to previous expectations of up 3% to 5%.
Citi analyst Jon Tower expects Cava to say it's seeing "some sales moderation" entering into the third quarter, similar to the rest of the industry, "which may cause management to strike a more conservative tone" in the second half of the year.
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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
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