Here's Why Cava Stock Fell Today
Shares of Mediterranean restaurant chain Cava Group (NYSE: CAVA) fell Wednesday after the company published its results for the third quarter after the bell Tuesday. Objectively speaking, those results were outstanding, and management subsequently raised its full-year outlook.
However, investors are still trying to figure out what Cava is worth -- which is a really common theme for newly public companies. And unfortunately for shareholders, the market apparently believes that Cava is worth a little less than it previously thought, despite the strong Q3 results. The stock sank by as much as 10% during morning trading, and was still down by about 7% as of 12:45 p.m. ET.
Investors who buy shares of small restaurant companies are looking for certain things, including expansion, same-store sales growth, and restaurant-level profits. Cava delivered on all three counts in Q3. The company opened 11 net new locations, growing 35.5% year over year. Same-store sales increased by 14%. And its restaurant-level profit margin was 25.1%, up from 21.7% in the prior-year period.
Source Fool.com
