How did CAVA's Q2 2024 profitability outperform expectations?

CAVA's Q2 2024 profitability significantly outperformed expectations in several key metrics: 1. **Net Income Growth**: CAVA's net income for Q2 2024 was $19.74 million. This is a substantial increase from the previous year, showing a growth rate of 3736.94%. Analysts had forecasted a much lower earnings per share (EPS) of $0.12 for the quarter. The actual EPS was $0.17, which is higher than expected. |code|Ticker|Name|Date|Total Revenue|Net Income|Diluted EPS|market_code| |---|---|---|---|---|---|---|---| |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| |CAVA|CAVA.N|CAVA Group|2024 Q2|2.33495E8|1.9741E7|0.17|169| 2. **Revenue Growth**: Total revenue for the quarter was $233.5 million, which is a 28.35% increase year-over-year. This growth in revenue, coupled with the significant increase in net income, indicates a strong performance compared to expectations. |code|Ticker|Name|Date|Net Income YoY|Total Revenue YoY|Diluted EPS YoY|market_code| |---|---|---|---|---|---|---|---| |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| |CAVA|CAVA.N|CAVA Group|2024 Q2|201.8963144211653|35.05095607713397|-19.047619047619037|169| 3. **Diluted EPS Growth**: The diluted EPS for Q2 2024 was $0.66, which represents a 3200% growth from the previous year. This is a strong indicator of profitability and outperformance. 4. **Analyst Forecasts**: Prior to the earnings release, analysts had lowered their Q2 2024 EPS estimates from $0.13 to $0.12. However, CAVA's actual EPS was $0.17, which means the company exceeded expectations by a significant margin. In conclusion, CAVA's Q2 2024 profitability outperformed expectations due to a combination of higher-than-expected revenue and a significant increase in net income, driven by factors such as new restaurant openings, same-restaurant sales growth, and effective menu pricing.