CAVA Group Q2 Earnings Call Highlights

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CAVA Group (NYSE:CAVA) reported second-quarter 2026 revenue growth of 31.3% as same-restaurant sales increased 9%, supported by 5.3% traffic growth and continued strength in new restaurant openings.

Revenue rose to $365.4 million, while net income increased to $23 million from $18.4 million in the prior-year quarter. Diluted earnings per share were $0.19, compared with $0.16 a year earlier. Adjusted EBITDA increased 30% to $54.7 million.

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“Our second quarter results underscore the continued strength of our category-defining brand and the resonance of our value proposition with today’s consumer,” Co-Founder and CEO Brett Schulman said on the company’s earnings call.

Restaurant Growth and Sales Trends

CAVA opened 17 net new restaurants during the quarter, ending the period with 476 locations across 29 states and Washington, D.C. The company said new restaurant productivity remained above 100%, while systemwide average unit volumes reached $3.1 million.

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The chain expanded into Indiana and Ohio during the quarter and plans to enter Las Vegas in the second half of 2026. CAVA also said it expects to expand into the Bay Area in 2027.

Chief Financial Officer Tricia Tolivar said the company’s new-unit performance was broad-based across geographies and restaurant formats. She added that the 2024 restaurant cohort has produced double-digit same-restaurant sales and represents the company’s highest-performing vintage.

CAVA maintained its full-year outlook for 75 to 77 net new restaurant openings and same-restaurant sales growth of 4.5% to 6.5%. Tolivar said the low end of that sales range would imply slightly negative same-restaurant sales, while the upper end would imply mid-single-digit growth.

She said the company’s most recent same-restaurant sales performance had recovered to the mid-single digits after concerns over a Cyclospora outbreak affected sales earlier in the third quarter. CAVA said it does not source leafy greens from Mexico and does not serve iceberg lettuce, but it saw near-term sales pressure from broad consumer concerns about lettuce and fresh produce.

Schulman said CAVA had not seen immediate effects from a separate Salmonella outbreak and does not source from associated farms. The company is continuing to consult with its food safety advisory council, he said.

Margins Reflect Food, Labor and Delivery Costs

Restaurant-level profit rose 28.1% to $93.8 million, though restaurant-level margin declined to 25.7% of revenue from 26.3% a year earlier.

• Food, beverage and packaging costs represented 30% of revenue, up 50 basis points year over year, largely due to costs associated with the launch of salmon.
• Labor and related costs were 25.3% of revenue, up 30 basis points, driven in part by a 3% wage investment for team members.
• Occupancy and related expenses improved by 50 basis points to 6.3% of revenue due to sales leverage.
• Other operating expenses increased 40 basis points to 12.8% of revenue, primarily because of a higher mix of third-party delivery.

Tolivar said food, beverage and packaging costs are expected to increase as a percentage of revenue through the remainder of the year because of fuel surcharges and the rollout of pre-marinated chicken. The company plans to roll out the chicken product across restaurants during the balance of 2026 and into 2027.

Schulman said the pre-marinated chicken is intended to reduce manual kitchen preparation, improve consistency and allow restaurant teams to devote more time to guest service rather than requiring immediate labor-hour reductions.

CAVA reiterated its full-year restaurant-level margin outlook of 23.7% to 24.3% and Adjusted EBITDA guidance of $181 million to $191 million, including pre-opening costs. The company expects fourth-quarter restaurant margins to be seasonally lower than third-quarter margins.

Menu Innovation, Loyalty and Operations

During the quarter, CAVA launched Pomegranate Glazed Salmon nationwide, its first seafood offering. Schulman said guest reception was strong and performance was in line with expectations. The item increased the rate of new customers and helped drive purchase frequency among loyalty members who ordered salmon, according to the company.

CAVA plans to retain salmon through the end of 2026. It also recently completed a market test of Roasted Garlic Shrimp and said the product is proceeding through its testing process. Planned seasonal offerings in the second half include a new dressing and another pita chip flavor.

The company continued developing its loyalty program through the launch of Flavor Passport, an in-app feature intended to encourage customers to explore menu offerings and earn rewards. Tolivar said the loyalty member base is growing faster than the company’s restaurant count.

CAVA also plans to launch a second catering market test later this fall, expanding beyond its initial test in Houston. Schulman said the company is focused on understanding production capacity, load balancing and restaurant execution before a broader rollout.

On staffing, the company’s assistant general manager roles have been rolled out to 70% of the fleet. Schulman said the initial rollout has been associated with improved team-member and guest satisfaction, as well as improved speed of service.

Liquidity and Capital Investment

CAVA ended the quarter with no debt outstanding, $435.6 million in cash and investments, and an undrawn $150 million revolving credit facility. Cash flow from operations rose to $134.5 million through the second quarter, compared with $98.9 million in the prior-year period, while year-to-date free cash flow totaled $44.8 million.

Tolivar said free cash flow typically becomes less favorable in the latter half of the year as the company invests in its development pipeline. CAVA also expects to invest roughly $5 million to $10 million in restaurant enhancements, including certain Project Soul refreshes and potential grill expansions to support demand at some locations.

About CAVA Group (NYSE:CAVA)

CAVA Group, Inc (NYSE: CAVA) is a leading fast-casual restaurant company specializing in Mediterranean-inspired cuisine. Operating under the CAVA brand, the company offers customizable bowls, pitas and salads built around a variety of proteins, grains, fresh vegetables and house-made spreads. With a focus on high-quality ingredients and made-to-order preparation, CAVA aims to deliver a casual yet elevated dining experience for dine-in, takeout and catering customers.

Founded in 2011 in the Washington, DC metro area by Ike Grigoropoulos, Dimitri Katsanis and Brett Schulman, CAVA has pursued an aggressive growth strategy that included the 2018 acquisition of Zoe's Kitchen.

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