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    CAVA
    Earnings call· Mar 2026(Q1 FY26)

    CAVA GROUP Q1 FY26 earnings call CAVA

    May 19, 2026 Source

    Executive summary

    CAVA Q1 FY26 — Strong Sales and Unit Growth Amidst Strategic Investments

    CAVA delivered a strong Q1 FY26, showcasing sustained momentum with robust revenue and same-restaurant sales growth, driven by positive traffic. The company continues to execute its long-term strategy, focusing on culinary innovation, digital engagement, and foundational investments in data transformation and team member development. Despite macroeconomic uncertainties, CAVA's value proposition and disciplined pricing strategy resonate with guests, supporting continued expansion and market share gains.

    Highlights

    5

    • CAVA revenue increased 32.2% year-over-year to $434.4 million.

    • Same-restaurant sales grew 9.7%, driven by 6.8% traffic growth.

    • Opened 20 net new restaurants, ending the quarter with 459 locations, a 20.2% increase year-over-year.

    • Adjusted EBITDA increased 37.6% over Q1 2025 to $61.7 million.

    • New restaurant productivity is trending above 100%, with new openings exceeding expectations.

    Concerns

    5

    • Net income decreased to $23.6 million from $25.7 million in Q1 2025, primarily due to lower permanent benefit from equity-based compensation.

    • Diluted EPS decreased to $0.20 from $0.22 in Q1 2025.

    • Other operating expenses increased 80 basis points as a percentage of revenue, mainly due to a higher mix of third-party delivery.

    • Anticipated 20-40 basis points headwind to restaurant-level profit margin from elevated energy costs in the remainder of FY26.

    • The national salmon launch is expected to be a margin rate headwind of approximately 100 basis points starting in Q2 FY26.

    Guidance & targets

    8
    CategoryTargetConfidence
    Net new CAVA restaurant openings
    75 to 77
    high materiality
    High
    Same-restaurant sales growth
    4.5% to 6.5%
    high materiality
    High
    CAVA restaurant level profit margin
    23.7% and 24.3%
    high materiality
    High
    Preopening costs
    $22 million and $22.5 million
    medium materiality
    High
    Adjusted EBITDA
    $181 million and $191 million
    high materiality
    High
    Effective tax rate
    23% and 28%
    low materiality
    Medium
    Equity-based compensation
    $22 million and $24 million
    low materiality
    High
    G&A as a percentage of revenue
    relatively flat year-over-year
    low materiality
    Medium

    Segment performance

    1
    SegmentRevenueYoYQoQMargin
    CAVA Restaurants (Company-wide)
    CAVA revenue grew 32.2% year-over-year. Restaurant level profit was $108.9 million, or 25.1% of revenue, representing a 32.3% increase over the prior year period.
    Restaurant Level Profit Margin: 25.1%Restaurant Level Profit Growth YoY: 32.3%
    		$434.4M32.2%—$108.9M

    Operational metrics

    22
    CAVA Revenue
    $434.4M32.2% YoY
    Q1 FY26
    Adjusted EBITDA
    $61.7M37.6% YoY
    Q1 FY26

    Increase driven by same-restaurant sales growth and new restaurant openings, partially offset by growth investments.

    Net Income
    $23.6Mvs $25.7M in Q1 FY25
    Q1 FY26

    Decrease due to lower permanent benefit from equity-based compensation within income tax in the prior year, partially offset by nearly 50% higher earnings before taxes.

    Diluted EPS
    $0.20vs $0.22 in Q1 FY25
    Q1 FY26
    Food, beverage and packaging costs
    29.1%20 bps lower YoY
    Q1 FY26

    Largely driven by favorable mix. Anticipated to increase as a percent of revenue for the rest of the year due to salmon launch.

    Labor and related costs
    25.7%approximately flat YoY
    Q1 FY26

    Driven by sales leverage, offset by a 2% investment in team member wages and AGM role expansion.

    Occupancy and related expenses
    6.9%50 bps improvement YoY
    Q1 FY26

    Due to sales leverage.

    Other operating expenses
    13.3%80 bps increase YoY
    Q1 FY26

    Primarily driven by a higher mix of third-party delivery and other individually significant items. Expected to be slightly above 2025 full-year percentage of revenue due to digital mix.

    General and administrative expenses (excl. equity-based comp & transition costs)
    9.9%60 bps improvement YoY
    Q1 FY26

    Driven by leverage from higher sales, partially offset by investments for future growth and higher performance-based incentive compensation.

    Preopening expenses
    $6.2Mvs $4.5M in Q1 FY25
    Q1 FY26

    Increase includes a higher number of units under construction.

    Effective tax rate
    21.5%
    Q1 FY26

    Cash taxes will remain immaterial until net operating losses are fully utilized.

    Cash and investments balance
    $403M
    end of Q1 FY26

    No debt outstanding.

    Revolver capacity
    $150M
    end of Q1 FY26

    Option to increase liquidity if needed.

    Systemwide average unit volumes (AUVs)
    $3M
    Q1 FY26
    New restaurant productivity
    above 100%tracking in line with or ahead of 2025 class
    Q1 FY26

    New restaurant openings continue to exceed expectations in both top line and margin performance.

    Price increase
    1.4%
    January

    Taken while holding base bowl and pita pricing flat.

    Price adjustments vs. CPI
    slightly more than halfvs cumulative CPI
    since end of 2019

    Reflects deliberate strategy to price well below inflation.

    Digital mix
    approaching 40%vs 36% in prior years
    Q1 FY26

    Seeing improvements in third-party delivery mix and other digital channels. Kitchen display screen investment driving better productivity and order accuracy.

    Assistant General Manager (AGM) coverage
    above 50%
    current

    Focused on higher volume restaurants. AGMs provide additional leadership support during peak shifts, strengthening operations.

    Brand awareness
    66%up from 62%
    current

    Driven by general awareness efforts and new restaurant openings.

    Marketing spend
    1.2%up from 1%
    last year

    Continuing to lean into marketing for brand building.

    Team member wage investment
    2%
    Q1 FY26

    Contributed to labor costs, offset by sales leverage.

    Industry KPIs

    2
    MetricValueDetails
    Comparable sales comps9.7%%
    Net unit growth development pipeline20restaurants

    Product announcements

    3
    ProductTypeDetails
    Pomegranate-Glazed Salmonlaunch
    Roasted White Sweet Potatoupdate
    Roasted Garlic Shrimproadmap

    Risks & headwinds

    5
    Elevated energy costsremainder of FY26, more significant in Q3 and Q4

    20 to 40 basis points headwind to restaurant level profit margin

    Mitigation: Incorporated into guidance; company aims to absorb rather than pass to guests.

    Salmon launch margin rate headwindstarting Q2 FY26

    approximately 100 basis points

    Mitigation: Salmon is priced to be penny profit neutral, so the dollar profit will be the same despite rate impact.

    Higher mix of third-party deliveryongoing

    Increased other operating expenses (80 bps increase YoY in Q1 FY26)

    Mitigation: Digital channels are designed to drive profit neutrality on a dollar basis; kitchen display screen investment improves order accuracy and productivity.

    Macroeconomic environment and geopolitical uncertaintyongoing

    Unquantified, general backdrop

    Mitigation: Company maintains a prudent view in guidance, but has sustained strong momentum and not seen deterioration in consumer behavior or premium incidents.

    Investment in team member wagesQ1 FY26 onwards

    2% investment

    Mitigation: Offset by sales leverage; part of foundational investments to support growth and exceptional guest experience.

    What to watch in Q2 FY26

    5

    Salmon menu performance and permanence

    next quarter / Q4 FY26
    CurrentPromising early results, expected to run through Q4 at minimum
    TargetDecision on permanent menu item status; continued strong performance

    Why it matters

    Salmon is a significant culinary innovation and its margin impact and customer reception will influence future menu strategy and profitability.

    Brian, we are pleased with the performance of salmon, and it is in line with what we saw in our market tests and to our expectations. I'm very proud of the team. They did a rigorous stage gate process to test and ensure that we could execute a delicate protein at a high level🎣 for our guests. And so we've been very pleased with the execution across the fleet. And have not committed to salmon being an everyday item but do expect it to run through the fourth quarter at minimum.

    Q&A highlights

    6

    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

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Pillars and Market Leadership

    CAVA solidified its position as a leader in Mediterranean cuisine, executing against its long-term strategy with discipline. The company's success is attributed to the structural strength of its business and dominant position in a category it pioneered. This leadership is rooted in a value proposition that prioritizes team members and guests, avoiding short-term discounting in favor of long-term brand building.

    02

    Culinary Innovation and Menu Strategy

    Culinary innovation remains central to CAVA's appeal. The company successfully brought back its fan-favorite roasted white sweet potato, driving increased visit frequency and attracting new customers. A significant milestone was the national launch of Pomegranate-Glazed Salmon, its first seafood offering, which has shown promising early results and fits seamlessly within the Mediterranean diet, increasing menu variety.

    03

    Digital Engagement and Loyalty Program

    CAVA continues to deepen relationships with guests through its loyalty program and digital experiences. Initiatives like the 'flavor bracket' in-app game and partnerships with athletes Azzi Fudd and Yaxel Lendeborg, featuring digital exclusive bowls, drove high engagement. These efforts leverage the growing first-party audience to create authentic connections and encourage repeat visits.

    04

    Data Transformation and Operational Platforms

    The company is undergoing a multi-year data transformation, launching CavaCore, a modern data platform, and CAVA Current, a real-time commerce platform. CavaCore provides a unified foundation for data management, while CAVA Current processes orders and aims to drive consistent execution and localized actions. These platforms are designed to enable more personalized guest experiences and predictive operations, positioning CAVA as an AI-enabled business.

    05

    People Investment and Leadership Development

    CAVA is investing in its team members through the 'Flavor Your Future' platform, focusing on attracting, developing, and retaining talent. A key action was the launch of the Assistant General Manager (AGM) position, aimed at building a deeper bench of grow-ready leaders. Early indicators show restaurants with AGM coverage are outperforming those without, strengthening operations and fostering career growth within the company.

    06

    Value Proposition and Pricing Discipline

    CAVA maintains a disciplined pricing strategy, taking an approximate 1.4% price increase in January while holding base bowl and pita pricing flat. Over the longer term, price adjustments have been well below inflation, representing slightly more than half of cumulative CPI since the end of 2019. This approach, combined with high-quality ingredients and warm hospitality, reinforces the brand's value perception and drives traffic.

    AI-generated summary of the company’s earnings call. Not investment advice.