Customers arrive at Kava restaurant in New York City on June 22, 2023.
Brendan McDiarmid | Reuters
reward GE Restaurants Co. on Thursday raised its full-year outlook as its restaurants reported strong traffic, leading to better-than-expected quarterly earnings and revenue.
The company’s shares rose 9% in extended trading. The stock has more than doubled in value this year, giving Kava a market value of about $11.6 billion, as of Thursday’s close.
Here's what the company reported for the quarter ended July 14 compared to what Wall Street was expecting, based on a poll of analysts conducted by LSEG:
Earnings per share: 17 cents vs. 13 cents expectedRevenue: $233 million vs. $220 million expected
The Mediterranean restaurant chain reported second-quarter net income of $19.7 million, or 17 cents a share, up from $6.5 million, or 21 cents a share, a year earlier.
Net sales rose 35% to $233 million. Same-store sales rose 14.4%, beating StreetAccount's estimate of 7.9%.
While many other restaurant companies reported a decline in visits as consumer spending declined, Kava said its visitors increased 9.5% during the quarter. Kava CEO and co-founder Brett Schulman credited the chain’s new grilled steak option as one of the reasons customers kept coming back to its restaurants during the quarter.
Kava opened 18 new locations during the quarter, bringing its total presence to 341 restaurants.
Kava now expects same-store sales growth of 8.5% to 9.5% in fiscal 2024, up from its previous range of 4.5% to 6.5%. The company also expects to open 54 to 57 new locations this year, up from its previous forecast of 50 to 54 restaurants.
Kava also expects adjusted EBITDA to be between $109 million and $114 million. Previously, it had forecast adjusted EBITDA of between $100 million and $105 million for the fiscal year.
