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    CAVA
    Earnings call· Jun 2026(Q2 FY26)

    CAVA GROUP Q2 FY26 earnings call CAVA

    Aug 11, 2026 Source

    Executive summary

    CAVA Group Q2 FY26 — Strong Sales and Unit Growth Despite Industry Headwinds

    CAVA Group delivered robust Q2 FY26 results, showcasing strong revenue and same-restaurant sales growth, fueled by successful new unit openings and the continued appeal of its Mediterranean cuisine. Despite navigating industry-wide food safety concerns and macroeconomic uncertainties, the company remains focused on long-term strategic investments in its people, operations, and guest experience, reinforcing confidence in its unit economics and future expansion.

    Highlights

    5

    • CAVA revenue increased by 31.3% year-over-year to $365.4 million.

    • Same restaurant sales grew 9%, driven by a 5.3% increase in traffic.

    • Opened 17 net new restaurants, bringing the total to 476, a 19.6% year-over-year increase.

    • Adjusted EBITDA rose 30% to $54.7 million compared to Q2 2025.

    • New restaurant productivity was once again above 100%, demonstrating strong market appeal.

    Concerns

    4

    • Near-term sales were impacted by broad consumer concerns around food safety issues, specifically the Cyclospora outbreak, though trends have since recovered to mid-single digits.

    • Food, beverage, and packaging costs increased by 50 basis points to 30% of revenue, primarily due to Salmon launch input costs and anticipated fuel surcharges/pre-marinated chicken rollout.

    • Labor and related costs increased by 30 basis points to 25.3% of revenue, driven by a 3% wage investment.

    • Other operating expenses increased by 40 basis points to 12.8% of revenue, primarily due to a higher mix of third-party delivery.

    Guidance & targets

    7
    CategoryTargetConfidence
    Net new CAVA restaurant openings
    75 to 77
    high materiality
    High
    Same restaurant sales
    4.5% to 6.5%
    high materiality
    High
    CAVA restaurant level profit margin
    23.7% to 24.3%
    high materiality
    High
    Preopening costs
    $22 million and $22.5 million
    medium materiality
    High
    Adjusted EBITDA (including preopening costs)
    $181 million and $191 million
    high materiality
    High
    Equity-based compensation
    $22 million and $24 million
    low materiality
    High
    Effective tax rate
    23% to 28%
    low materiality
    High

    Operational metrics

    22
    CAVA revenue growth
    31.3%YoY
    Q2 FY26

    Year-over-year increase in CAVA revenue.

    Adjusted EBITDA
    $54.7 million30% increase
    Q2 FY26

    Adjusted EBITDA for the second quarter, representing a 30% increase versus Q2 2025.

    Net income
    $23 million
    Q2 FY26

    Net income reported for the second quarter.

    Diluted EPS
    $0.19
    Q2 FY26

    Diluted earnings per share for the second quarter.

    Cash and investments balance
    $435.6 million
    Q2 FY26

    Total cash and investments at the end of the quarter.

    Debt outstanding
    0
    Q2 FY26

    No debt outstanding at the end of the quarter.

    Undrawn revolver capacity
    $150 million
    Q2 FY26

    Access to an undrawn revolver with an option to increase liquidity.

    Restaurant-level profit
    $93.8 million28.1% increase
    Q2 FY26

    Restaurant-level profit for the second quarter, compared to $73.3 million or 26.3% of revenue in Q2 2025.

    Food, beverage, and packaging costs
    30%higher by 50 bps
    Q2 FY26

    Anticipated to increase as a percent of revenue for the rest of the year due to fuel surcharges and pre-marinated chicken rollout.

    Labor and related costs
    25.3%up by 30 bps
    Q2 FY26

    Labor costs for the second quarter.

    Occupancy and related expenses
    6.3%improvement of 50 bps
    Q2 FY26

    Occupancy costs for the second quarter.

    Other operating expenses
    12.8%increase of 40 bps
    Q2 FY26

    Other operating expenses for the second quarter. Mix has declined versus Q1 FY26.

    General and administrative expenses (excluding equity-based compensation)
    9.3%compared with 9.8% in Q2 2025
    Q2 FY26

    G&A expenses for the quarter.

    Preopening expenses
    $6.7 millioncompared with $5.1 million in prior year
    Q2 FY26

    Preopening expenses for the quarter.

    Equity-based compensation
    $5.7 million
    Q2 FY26

    Equity-based compensation for the second quarter.

    Effective tax rate
    24.7%
    Q2 FY26

    Effective tax rate for the second quarter.

    New restaurant productivity
    above 100%
    Q2 FY26

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

    System-wide average unit volumes
    $3.1 million
    Q2 FY26

    Overall system-wide average unit volumes.

    Loyalty member base growth
    faster rate than new restaurant openings
    Q2 FY26

    Loyalty member base is growing faster than new restaurant openings, working as designed.

    AGM role rollout
    70%
    Q2 FY26

    Assistant General Manager roles rolled out to 70% of the restaurant fleet, the intended initial launch amount.

    Lower income cohort same restaurant sales
    generating the highest
    Q2 FY26

    Lower income cohorts are generating the highest same restaurant sales results, demonstrating white space opportunity and accessibility from minimized price increases.

    Capital expenditure for restaurant enhancements
    $5 million or $10 million
    H2 FY26

    Planned CapEx for the remainder of the year beyond new store development.

    Industry KPIs

    2
    MetricValueDetails
    Comparable sales comps9%%
    Net unit growth development pipeline17restaurants

    Product announcements

    7
    ProductTypeDetails
    Pomegranate Glazed Salmonlaunch
    Roasted Garlic Shrimpmilestone
    Harissa BBQ Pita Chipslaunch
    Strawberry Ginger Drinklaunch
    Pomegranate Glazed Salmon Bowllaunch
    New Dressinglaunch
    New Pita Chip Flavorlaunch

    Deals & partnerships

    1
    Airbnb ExperiencesMediterranean Summer Supper Series

    Partnership to host Supper Series where guests gathered around a shared table to experience CAVA's hospitality. Oasis members received exclusive invitations.

    Risks & headwinds

    5
    Near-term sales impact from food safety concernsExiting Q2 FY26 and early Q3 FY26

    Sales dipped to flat to positive, then recovered to mid-single digits.

    Mitigation: Consulting with Food Safety Advisory Council, monitoring situation, existing traceability technology, commitment to earning consumer trust.

    Macroeconomic and geopolitical fluidityFY26

    Prudent assumption incorporated into full-year guidance.

    Mitigation: Maintaining a prudent and thoughtful approach to guidance, focusing on underlying business health and resilience.

    Increase in food, beverage, and packaging costsRest of FY26

    Anticipated increase as a percent of revenue.

    Mitigation: Driven by fuel surcharges and the rollout of pre-marinated chicken. Partially offset by favorable mix in Q2.

    Increased labor costsQ2 FY26 onwards

    3% wage investment.

    Mitigation: Partially offset by sales leverage. Continued investments in team member wages are embedded in guidance to deliver exceptional hospitality.

    Higher third-party delivery mixQ2 FY26

    Increased other operating expenses by 40 bps.

    Mitigation: Mix has declined versus Q1 FY26; not expected to deleverage as much in H2 FY26. Driven by KDS rollout improving platform ratings and accessibility.

    What to watch in Q3 FY26

    5

    Same restaurant sales recovery

    next quarter
    CurrentMid-single digits
    TargetContinued recovery and stabilization

    Why it matters

    Indicates the sustained impact of food safety concerns and the effectiveness of CAVA's mitigation and brand resilience.

    Performance improved sequentially each week and most recently, as concerns around the broader impact of the Cyclospora outbreak has begun to ease, our same restaurant sales performance has recovered to mid-single digits.

    Q&A highlights

    6

    Can you provide more color on the implied 2H outlook, particularly how the Cyclospora impact is factored into the guidance range and what drives the low vs. high end?

    Management stated the guidance incorporates current trends, macroeconomic uncertainty, and a prudent assumption for the Cyclospora impact's duration. The low end implies slightly negative same restaurant sales, while the upper end is mid-single digits. Current trends do not suggest landing at the low end, but prudence is maintained.

    “So if you look at guidance to deliver on the low end of the range, it would be slightly negative same restaurant sales. The upper end of the range would be in the mid-single-digit range. There's nothing in what we're seeing in our trends today that would suggest we would land at the lower end of the range, but we feel it's the most important thing to do is be prudent and thoughtful in that guidance and to reiterate where we were from a guidance perspective when we started.”

    asked by Dennis Geiger · answered by Tricia Tolivar

    2 min read6 chapters

    Detailed Narrative

    01

    Restaurant Expansion & New Markets

    CAVA opened 17 net new restaurants in Q2 FY26, reaching 476 locations across 29 states and D.C., representing a 19.6% year-over-year increase. New restaurant productivity consistently exceeded 100%, with successful entries into Indiana and Ohio. The company plans to enter Las Vegas, Nevada, in the second half of the year and the Bay Area in 2027, reinforcing confidence in broad market appeal and long-term growth opportunities.

    02

    Culinary Innovation & Menu Strategy

    The nationwide launch of Pomegranate Glazed Salmon, CAVA's first seafood offering, was a significant milestone, performing in line with expectations and driving increased frequency among loyalty members. A market test of roasted garlic shrimp has concluded successfully, with further updates expected. Seasonal limited-time offerings, such as Harissa BBQ Pita Chips and a Strawberry Ginger Drink, continue to engage guests and reinforce brand relevance.

    03

    Loyalty Program & Guest Engagement

    The loyalty platform continues to grow, with the member base expanding faster than new restaurant openings. New digital experiences like 'Flavor Passport' encourage menu exploration and reward earning. The company also launched initiatives like complimentary Pita Chips for rewards members and the Mediterranean Summer Supper Series in partnership with Airbnb Experiences, aiming to deepen guest relationships and foster community connection.

    04

    Team Member Investment & Operational Efficiency

    CAVA is committed to making the General Manager role the best in the industry through its 'Flavor Your Future' initiative, which aims to hire over 2,500 new team members. The AGM role has been rolled out to 70% of the fleet, showing improved team member and guest satisfaction. The rollout of pre-marinated chicken throughout FY26 and FY27 is expected to simplify operations, improve consistency, and reduce back-of-house workload, allowing teams to focus on hospitality.

    05

    Food Safety & Industry Challenges

    The company addressed recent industry food safety issues, noting that while it does not source affected ingredients, it experienced near-term sales impacts from broad Cyclospora concerns. Sales have since rebounded to mid-single digits. CAVA continues to consult with its Food Safety Advisory Council and emphasizes its commitment to earning consumer trust through proactive measures and traceability technology, without expecting outsized investments impacting margins.

    06

    Financial Performance & Outlook

    Q2 FY26 saw CAVA revenue up 31.3% to $365.4 million, with restaurant-level profit at $93.8 million (25.7% of revenue). Adjusted EBITDA increased 30% to $54.7 million. The company reiterated its full-year 2026 guidance, including 75-77 net new restaurant openings and same restaurant sales of 4.5% to 6.5%, maintaining a prudent outlook amidst macroeconomic and geopolitical fluidity. Year-to-date free cash flow was $44.8 million, marking the 10th consecutive quarter of positive year-to-date cash flow.

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