CAVA Group (CAVA) Q2 FY26 earnings call: guidance and Q&A

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

Given the fluid industry backdrop and food safety concerns, what levers can CAVA pull, such as loyalty programs or increased marketing spend, to reaccelerate traffic?

Management acknowledged opportunities to increase marketing investment, but emphasized that the biggest lever remains delivering exceptional daily experiences in restaurants. They believe improving consistency in fresh food, welcoming hospitality, and clean environments will drive long-term traffic growth, noting current low marketing investment levels.

“Yes, Andrew, there's certainly opportunities on the marketing front, given our low levels of investment to ratchet up those investments. But I would say that the biggest opportunity still is delivering great experiences every day in every restaurant. That's clean restaurants, that's welcoming hospitality and it's consistently fresh food and excited with the progress that the team is making on that front.”

asked by Andrew Charles · answered by Brett Schulman

With strong new unit volumes, is there anything in the '25 or '26 cohorts that would make it difficult to grow comps when they enter the comp base, or can we expect higher highs?

Management is excited about the 2024 cohort, which exceeded expectations and is the highest performing vintage with double-digit same restaurant sales. They expect 2025 and 2026 cohorts to perform similarly, starting high, dipping slightly in their first year after opening, and then rebounding strongly.

“John, we're really excited about what we're seeing from the 2024 cohort. Those units exceeded our expectations as well, and they are, in fact, double-digit same restaurant sales in the highest performing vintage that we have in our entire portfolio. And so we expect that '25 and '26 would perform in a similar fashion based on what we're seeing with that strong cohort.”

asked by John Ivankoe · answered by Tricia Tolivar

Can you provide an update on the catering test and share use cases for CAVA Core and CAVA Current, and their impact on the business?

CAVA will launch a second catering market test later this fall to solve load balancing and capacity management. CAVA Core and CAVA Current are yielding significant productivity gains in support centers, enabling faster data analysis. Future applications include predictive labor scheduling, inventory ordering, and personalized marketing, representing a decade-long data transformation.

“Yes, Sharon. Catering, we will launch a second market test that we'll expand from our existing Houston market test. We will enter a second market with a catering test later this fall to, again, really understand and solve the question of load balancing and capacity management.”

asked by Unknown Analyst · answered by Brett Schulman

What is the potential for labor cost savings from pre-marinated chicken and other centralization efforts, and what other opportunities exist for centralizing food production without compromising quality?

Management views pre-marinated chicken as an investment to reduce friction and free up team member time, which should be reinvested in guest hospitality and service, rather than directly cutting labor hours. The focus is on driving long-term sustainable traffic growth through improved guest and team member experience, not immediate cost savings.

“Danilo, we've taken a little bit different angle on it, where we've looked at it and said, how can we invest in this and fund this and not tell our teams, hey, cut 3 or 4 hours out of the schedule now. Take those 3 or 4 hours that you're saving in manual prep and invest that in our guests and the hospitality and the service and the table touches and again, improving the environment for our team members and the environment for our guests, which we think is going to drive long-term sustainable, durable traffic growth.”

asked by Danilo Gargiulo · answered by Brett Schulman

Can you provide an update on income cohort growth, specifically if the lower income cohort is still growing faster than the higher income cohort?

Management confirmed that lower income cohorts are still generating the highest same restaurant sales results. This demonstrates the white space opportunity and the positive impact of minimizing price increases, which translates into greater accessibility for a broader consumer base.

“As we look at the income cohorts, we take every restaurant and stratify them based on the median household income in their market. And we are again seeing that the lower income cohorts are generating the highest same restaurant sales results. So really demonstrating the white space opportunity that we have and certainly, the investments that we're making in minimizing our price increases is translating into greater accessibility for many across the country.”

asked by Logan Reich · answered by Tricia Tolivar