Cava CEO谈环孢子虫疫情与销售增长

Let's take a look at shares of Cava. They're up after reporting a faster than expected rise [music] in sales in the most recent quarter. Salmon pita chips offsetting a mid July slump tied to consumer concerns around leafy greens. Joining us right now is the CEO of Cava, Brett Schulman, live here in studio 2. Brett, great to see you here. 9% comp growth. That was great. That was above estimates. Uh talk to me a little bit about the forecast.

You maintain the forecast. You didn't you didn't cut it, but you didn't raise it either. Why not? Well, we wanted to be prudent with our guidance and take into account what we noted to be the impact of some of the broader concerns around food safety issues even though our supply chain or ingredients have not been connected uh to the the issues uh as well as uh some of the inflationary pressures that may persist throughout the year and then certainly the volatile geopolitical and macroeconomic environment.

So, we wanted to be prudent with that guidance but very pleased with the uh the strength we saw in the quarter.

Uh just to be clear, there's been uh no link at all uh to this outbreak to Cava. But I do have to ask you as a restaurant CEO, I'm sure you had to take a close look at your supply chain, your food quality to make sure uh that there was no concern. You're confident right now uh that your supply chain is clean, none of your customers have gotten sick and that going forward uh you can sell with confidence.

That's correct. No. Uh there has been no connection to our supply chain. We have not been contacted by any public health uh officials. Uh but we are closely monitoring the situation. We have an external uh advisory committee of industryleading experts because food safety is paramount to what we do. It's foundational to our guest relationship and we want to make sure that uh our guests have the confidence that we are committed to having a food safe environment.

Just one other quick question on that. Have you been in contact at all with any health officials either at the federal level or at the state level?

No. No, we have not been contacted, nor have we been involved. And again, we have not had any uh connection within our supply chain to any ingredients or farms or facilities that were impacted uh by the recent uh issues.

You're also opening restaurants at a pretty aggressive pace, I think 17 this quarter and around nearly 500. How much of this is grow how much of this growth is Cava specific or how much of this is really um maybe consumers trading down restaurants for more fast casual meals like Cabba? Yeah, we see people trading into Cava from full service restaurants, from other limited service restaurants, or as an alternative to the grocery store.

Our food is very unique, differentiated, not easily recreated at home. And I think people are shifting their diets more and more to a Mediterranean style diet. It's the number one ranked diet for nine years running and delivering on all the the needs that the modern consumer is looking for. Protein dense, fiber richch, nutrient-dense cuisine that is flavorful uh but also healthful for you. Well, I I'm curious. I I was I was looking through the conference call transcript and and this GLP-1 issue was addressed OMIC here and you talked about this idea that people are actively reshaping their orders, uh doubling up protein, adults are ordering kidsized portions, uh etc., etc.

So, give me a sense as to how you're adapting to that. Are you anticipating that these types of trends are indeed long-term structural and not just some fad that we'll move away from in a couple of weeks? We we think GLPS are kind of just one part of this larger shift to uh people more interested in longevity in health and wellness, but also bolder, more interesting flavors, and that's where our food sits at the intersection of.

So, we feel like whether it's GLP or some of these other secular trends, it's moving more people to our style of eating.

And you also called out, which is interesting to me, the pomegranate glazed salmon. Is that part of Kava's new strategy, introducing more higherend items and hopefully driving sales when it comes to that? Because even the extra pita chips, I I don't think I've ever paid extra for a pita chip, but it seems like people are.

Yeah. Well, we are seeing people opt into our premium proteins and attachment items. And salmon was really to have our first seafood item on the menu. Seafood is a core aspect of the Mediterranean diet and we wanted to make it available to our guests. So, very excited uh to have that on the menu and the reception that it's received from our guests.

Another interesting thing, digital sales are now 39% of your revenue. And I'm guilty of ordering and you know, your order is like something like $20. the delivery fee something like $10. Is that becoming the new trend now? And is that what you see what will be the next leg to push Cava's growth further?

We see growth in all of our channels and we we don't think it's an either or. We think it's an and. We want to have great digital channels and great physical channels. That's why we've invested recently in Project Soul, which creates even warmer environments and better aesthetics in our dining room. So, if you do choose to have a meal, uh you feel like you can have it uh in our dining room and be comfortable. Or if you're running errands, you can use the app or even have it delivered to you cuz we know that most of our guests, depending on the day of the week or where they are in the world and their need, they cross channel traffic us.

So, we want to be equally as relevant across those different channels.

Talk to me about your marketing strategy because when you were talking earlier about, you know, the GOP ones and the eating healthy, my first thought was, okay, how are you uh selling that to the public? But I remember looking at your marketing, at least what's what's in the filing there. You don't spend a whole lot on advertising and marketing, at least not relative to some of the other fast casual fast food chains.

We've been very able to be very efficient with our marketing. We've seen great word of mouth, uh, great user generated content on social media. And our community day program when we open a new restaurant in every market that we open and we invite our new neighbors to our table for a free meal, we suggest uh donations. We'll match those donations. They're not required, but if you do donate, we'll match it. and that goes to a local philanthropic food partner addressing uh food insecurity in in the uh in the market.

But do you think that that that might have to change? I mean, as this company matures and you start to reach saturation points in certain markets, I mean, there is this idea of making sure people are always aware that you're there. Uh because there are a lot of options out there.

Well, there's always opportunities for us to continue to grow our brand awareness beyond just opening restaurants and some of the activities we do today. And an example of that is we just did our Mediterranean summer supper series. So, we did uh three different cities. We brought people to a a communal table together to celebrate food, to celebrate uh meeting one another in a in a human connection form. So, we're big about human connection in our brand.

It's part of the Mediterranean way, the Mediterranean hospitality, the Mediterranean lifestyle, not just the food, but the hospitality and the human connection. So, you'll see more uh in real life marketing activities like that that help drive that human connection.

And your restaurant level margin fell some 60 basis points. I mean, we know that you've got strong sales growth, but costs are not standing still. I mean, inflation is all we talk about. How much more can you absorb before you have to raise prices again?

Well, that's been part of our long-term strategy where we've wanted to