Shares of fast-casual Mediterranean food chain Cava Group (NYSE: CAVA) were on the move today, jumping after the company reported better-than-expected results in its third-quarter earnings report Tuesday evening.

The gains continued a surge that began last year as Cava’s Chipotle-like concept is clearly resonating with customers. The stock was up 11% as of 10:30 a.m. ET.

Cava shines again

The top line soared again at Cava as same-store sales jumped a whopping 18% on traffic growth of 13%. That drove revenue up 39% to $243.8 million, which easily beat the consensus estimate of $233.6 million.

Average unit volumes improved from $2.6 million to $2.8 million, showing that individual restaurants are generating more business, and restaurant-level profit margin was 25.6%, which is in league with Chipotle and other top restaurant operators.

On the bottom line, net income nearly tripled from $6.8 million to $18 million, and earnings per share rose from $0.06 to $0.15 on the basis of generally accepted accounting principles (GAAP), which topped estimates of $0.11.

CEO Brett Schulman was quoted as saying: “Our third-quarter results demonstrate the strength of our Mediterranean category-defining brand and the broad appeal of our unique value proposition, creating what is quickly becoming the next major cultural cuisine category.”

What’s next for Cava?

Not surprisingly, the company raised its full-year guidance, calling for same-store sales of 12%-13%, up from a previous estimate of 8.5%-9.5%, and it sees adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $121 million-$126 million, up from a previous range of $109 million-$114 million. It also raised its store opening plan slightly to 56-58.

Cava continues to expand rapidly and sales at its stores are soaring. While the stock is expensive, it’s easy to see why it keeps gaining. If Cava can continue its strong growth, the stock could have a lot further to climb.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $23,529!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $42,465!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $441,949!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 11, 2024

Jeremy Bowman has positions in Chipotle Mexican Grill. The Motley Fool has positions in and recommends Chipotle Mexican Grill. The Motley Fool recommends Cava Group and recommends the following options: short December 2024 $54 puts on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.