Cava Needs to Keep This Number Strong if It Wants to Keep Growing
Recent IPO stock Cava Group (NYSE: CAVA) has hit the ground running, offering a Mediterranean food concept that appears to be resonating with consumers. That's great news and could turn the brand into a hot growth stock.
Still, investors with an interest in this restaurant stock need to make sure that this doesn't turn into a "growth at any cost" story, which would be bad for the company and its shareholders. Store-level profit margin is one number that can help you figure it out.
If there's a big-picture story with Cava, it has to be the fact that it is still small. At the end of the second quarter, the restaurant company had just 279 restaurants. That's pretty tiny. By comparison, Chipotle (NYSE: CMG) had roughly 3,250 locations. This is great news on the growth front because each new Cava location meaningfully adds to the top line.
Source Fool.com
