CAVA (CAVA) Q1 FY26 earnings call: guidance and Q&A

Asked about commonalities in high new store productivity and whether the salmon offering is permanent given its impact on COGS.

New restaurant openings are exceeding expectations across all geographies and formats, with no specific commonalities other than strong performance. The '25 vintage is performing well in the '26 comp base. Salmon is anticipated to run through Q4 at minimum, but not committed as a permanent item.

“We are finding that across all geographies, all types of formats, all markets and can't find any commonalities in terms of tying them to particular behavior overall other than we haven't done a market yet that doesn't love CAVA, and we're very happy with their performance.”

asked by Sara Senatore · answered by Tricia Tolivar

Inquired about factors limiting flow-through on additional revenue, specifically energy costs, and asked for clarification on the increase in other operating expenses.

Margin outlook incorporates salmon's impact, an additional 20-40 bps headwind from energy costs (fuel surcharges, utilities, polyethylene costs), and some wage investments. Other OpEx increase is primarily due to higher digital mix (third-party delivery fees), which is designed to be profit neutral on a dollar basis.

“But there are a number of factors that we included in our guidance that we want to specifically touch on, one is salmon. So that's certainly going to have an impact overall on margin rate. But remember that salmon is priced to be penny profit neutral, so the dollars will be the same.”

asked by David Tarantino · answered by Tricia Tolivar

Sought clarification on recent same-restaurant sales trends (April data) and asked about key factors driving performance towards the high vs. low end of guidance.

Same-restaurant sales trends in Q2 are in line with Q1 and tracking above revised full-year guidance. Key drivers for future performance include consistent culinary innovation, elevating Mediterranean hospitality, operational execution, mitigating menu price increases, and leveraging marketing to build brand awareness.

“Our same-restaurant sales trends in the second quarter are in line with our overall same-restaurant sales in the first quarter and tracking above our revised full year guidance.”

asked by Danilo Gargiulo · answered by Tricia Tolivar

Asked to rank drivers of same-store sales acceleration, including white sweet potatoes, marketing, and consumer improvements.

The acceleration is a combination of culinary appeal, warm hospitality, and strong value. White sweet potatoes drove frequency and new guests. No single factor was dominant, with strength seen across all regions, vintages, and income cohorts, including outperformance in lower-income cohorts.

“It doesn't appear to be a single factor that was driving the overall same-restaurant sales performance. When you look at the comps across the country, you saw great strength in every region of the country.”

asked by Andrew Charles · answered by Tricia Tolivar

Asked about catering strategy, particularly for urban stores and potential purpose-built assets, and how the strong balance sheet might be used to accelerate development or acquire assets.

Catering is being market-tested in Houston, with expansion to a second city planned, focusing on capacity management. The company is evaluating whether purpose-built or regular restaurants are best. The strong balance sheet provides flexibility, but the highest and best use of cash is new restaurant openings, with talent pipeline being the main growth governor. Asset deals are evaluated but often found less effective than organic growth.

“We are testing in regular CAVA restaurants to understand strategically, how do we want to move forward? Is it more purpose-built centralized production complemented with the regular CAVA restaurants? Or is it just that centralized production?”

asked by John Ivankoe · answered by Brett Schulman

Asked if CAVA has data showing guests choose them over competitors due to pricing, and if the company would consider taking more price given strong traffic and rising energy costs.

CAVA would not look to take more price, aiming to absorb inflationary pressures to maintain value. Internal brand health surveys show strong scores on value and uniqueness compared to peers and home cooking. Past instances, like not raising prices during AB 1228 in California, showed stronger traffic. Value is seen as a combination of quality, relevance, convenience, and experience, not just price.

“I mean, I think we've tried to reflect in our restaurant level margin guidance that we look to absorb some of those fuel surcharges that we're expecting and some other inflationary pressures and not pass along to our guests.”

asked by Jon Tower · answered by Brett Schulman