How did CAVA's Q1 2024 earnings surprise investors?

CAVA's Q1 2024 earnings report surpassed investor expectations in several key areas, reflecting the company's robust performance and growth prospects: 1. **Revenue and Net Income Growth**: CAVA reported a significant increase in total revenue, growing by 28.35% year-over-year to $227.4 million. This surge was driven by a 27.5% year-over-year increase in same-restaurant sales and the addition of 14 new net restaurants, bringing the total to 323 locations. The net income grew by a substantial 3736.94% to $78.62 million, up from a $2.14 million loss in the same quarter the previous year. This marked a strong turnaround and exceeded analysts' expectations. |code|Ticker|Name|Date|Net Income YoY|Total Revenue YoY|Diluted EPS YoY|market_code| |---|---|---|---|---|---|---|---| |CAVA|CAVA.N|CAVA Group|2023 Q2|179.453219927096|27.20744583011441|103.37078651685394|169| |CAVA|CAVA.N|CAVA Group|2023 Q3|157.45396451694273|26.063134613451293|100.66964285714286|169| |CAVA|CAVA.N|CAVA Group|2023 Q4|110.87233365170329|36.35279178050564||169| |CAVA|CAVA.N|CAVA Group|2024 Q1|753.5730966837926|27.53701688472201|109.23076923076923|169| 2. **Earnings Per Share (EPS)**: The diluted EPS for the quarter was $0.66, which represents a 3200% year-over-year growth. This impressive increase surpassed analysts' expectations, who had anticipated an EPS of $0.04. The actual EPS of $0.12 also significantly exceeded the prior-year's loss of $1.30 per share. |code|Ticker|Name|Date|Total Revenue|Net Income|Diluted EPS|market_code| |---|---|---|---|---|---|---|---| |CAVA|CAVA.N|CAVA Group|2023 Q2|1.72894E8|6539000|0.21|169| |CAVA|CAVA.N|CAVA Group|2023 Q3|1.75553E8|6833000|0.06|169| |CAVA|CAVA.N|CAVA Group|2023 Q4|1.7717E8|2049000|0.02|169| |CAVA|CAVA.N|CAVA Group|2024 Q1|2.59006E8|1.3993E7|0.12|169| 3. **Company Performance and Analyst Expectations**: CAVA's performance was bolstered by its versatile Mediterranean concept and strong economic model, which led to consecutive quarters of net income and positive free cash flow. Analysts had anticipated a more modest adjusted EPS of $0.04 for the quarter, but CAVA delivered an EPS of $0.12, a clear indication of outperformance. 4. **Stock Reaction**: Despite the strong earnings report, CAVA's shares experienced a decline in after-hours trading following the release. This could be attributed to market reactions or investor sentiment, which may not always align with the fundamental performance of the company. In summary, CAVA's Q1 2024 earnings report showcased remarkable growth in revenue and net income, surpassing analysts' expectations in both categories. The company's strategic focus on restaurant expansion and same-restaurant sales growth has proven effective, contributing to its robust financial performance.