CAVA, Chipotle and Sweetgreen in 2025 News ad

Fast food and fast food restaurants struggled in 2024 as inflationary pressures caused consumers to tighten their spending habits in 2024. However, build-your-own-bowl (BYB) fast food restaurants in the retail-wholesale sector have had a stellar year. These types of restaurants created an almost elastic halo around themselves because higher prices didn’t stop consumers from spending money. Adding steak and beef to the menu has also increased revenue. Looking ahead to 2025, investors will be interested to see whether spending trends at BYB’s three largest fast-food restaurants will continue. Here’s how they’ve performed recently and what that bodes for their future results. Is there a clear winner ahead of the rest? Yes.

CAVA: Mediterranean Chipotle continues to break records

The stock is expected to rise 189% in 2024. KAWA Group Inc. New York Stock Exchange: KABA created a huge sensation among investors and consumers. The restaurant offers healthier protein options, from grilled chicken, lamb meatballs, falafel to steak, as well as 38 fresh Mediterranean toppings such as coleslaw, grilled eggplant, feta cheese, hummus and dips such as tzatziki. spicy mayonnaise, harissa. and lemongrass tahini. There are 17 billion potential combinations. Customers can also order pita sandwiches. The company has grown to more than 350 locations and plans to open 56 to 58 new locations in 2024.

Hit all pistons to take the crown with sales up 18.1% year-on-year

CAVA reported third-quarter 2024 earnings per share of 15 cents, beating analysts’ estimates by 4 cents. Revenue rose 39% year over year to $243.82 million, beating consensus estimates of $233.05 million. Same company restaurant sales rose 18.1% year over year. as guest traffic grew 12.9% year over year. While the approximately 5.2% increase was driven by menu pricing and product mix, the increase in guest traffic is a strong sign of organic growth. Restaurant level profitability increased to 25.6%. Average unit volume (AUV) increased to $2.8 million. The company aims to enter the South Florida and Midwest markets in 2025. The next big category of cultural cuisine could be Mediterranean cuisine.

CAVA releases 2024 revenue but increases fees and margins

Incidentally, CAVA appears to be taking a conservative approach to guidance, with full-year revenue expected to be between $675 million and $680 million, compared to the consensus estimate of $678.56 million. CAVA raised its store sales forecast to 12% to 13% , increasing from 8.5% to 9.5%. CAVA raised its restaurant business profitability forecast from 24.2% to 24.7% from 24.5% to 25%.

Bypassing FOMO

While the results have been impressive, it’s important not to rush into the stock. Investors suffering from lost profits have learned this the hard way after taking profits. The next morning, shares soared to $172.43 from $145.03, only to “sell the news” after the price gap fell to a low of $133.00 a few days later.

Was profit taking justified with a 200% increase? Insiders thought so, as executives sold shares soon after. Shares are still trading around the $115.08 level with a P/E of 250, but near the pre-earnings support level of $110.00, which is much cheaper than the $172.43 peak that someone bought the day after earnings.

Chipotle: Incumbent continues to operate while companies slow down

An incumbent and pioneer of the BYB style fast food restaurant model. Chipotle Mexican Grill Inc. New York Stock Exchange: CMG made headlines when its iconic CEO Brian Niccol was poached Starbucks Co. New York Stock Exchange: SBUX the total compensation was more than $100 million.

In the previous quarter, the company generated double-digit revenue from sales of its limited-edition Chicken Pastor. However, that pace slowed as the company reported third-quarter 2024 revenue growth of 13% YoY to $2.79 billion, below the consensus estimate of $2.82 billion. Restaurant sales growth also nearly halved to just 6%. The company said its smoked brisket delivered another strong quarter.

Chipotle confirms management and gets more Chipotlanes

Chipotle reiterated full 2024 guidance in the mid to high single digits. He reiterated his guidance for company-operated restaurant openings in 2024 at 285 to 315 units. In 2025, Chipotle expects to open between 315 and 345 new company-operated restaurants, with more than 80% of them having Chipotle drive-thru lines.

Sweetgreen: good growth, but sour profits

Health-conscious BYB newcomer Sweetgreen Inc. New York Stock Exchange: SR 2024 was a stellar year, with shares up 220%. The addition of caramelized garlic steak was a game changer as it expanded the audience beyond vegetarians. Its caramelized garlic steak quickly became popular, being chosen in one in five dinner orders. After a stellar second quarter of 2024, momentum has slowed.

Sweet Green reported third-quarter 2024 loss per share of 18 cents, missing estimates by 5 cents. Revenue rose 13% year over year to $173.43 million, missing the consensus estimate of $175.46 million. Same-store sales rose 6% year over year, compared with 4% in the prior year. Restaurant-level earnings were $34.9 million and restaurant-level margins were 20.2%, improvements from the prior quarter of $29.1 million and 19%, respectively.

Built-in guide to Sweetgreen issues

The company expects 2024 revenue to be between $675 million and $680 million, up from $678.56 million. Same-store sales growth is expected to be between 6% and 7%. Restaurant-level profitability is expected to be between 19.5% and 20%.

Sweetgreen Co-CEO Jonathan Newman commented: “Our expanded menu, coupled with new restaurant openings in 2024, growth in emerging markets and the successful implementation of Infinite Kitchen give us confidence in accelerating our business growth in 2025.” “

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