TLDR
- CAVA stock jumped more than 10% in after-hours trading Tuesday after Q2 results beat expectations
- Restaurant revenue rose 31.3% to $365.4 million, topping the $360 million analyst estimate
- Same-restaurant sales grew 9%, driven by 5.3% guest traffic growth and 3.7% from higher prices
- Restaurant-level margin slipped to 25.7% from 26.3%, pressured by salmon launch costs, delivery mix, and wages
- Full-year guidance held steady: 4.5%-6.5% same-restaurant sales growth and $181M-$191M adjusted EBITDA
Cava Group stock surged more than 10% in after-hours trading Tuesday after the Mediterranean chain posted second-quarter results that beat Wall Street expectations on both revenue and earnings.
The stock closed Tuesday down 37% from its April peak before the after-hours move. That decline had reflected investor concern over slowing growth and margin pressure heading into the print.
For the quarter ended July 12, restaurant revenue came in at $365.4 million, up 31.3% year over year. Total company revenue reached $368.4 million, ahead of the roughly $360 million analysts had penciled in.
$CAVA GROUP Q2’26 EARNINGS HIGHLIGHTS
🔹 Revenue: $365.4M (Est. $361M) 🟢; +31.3% YoY
🔹 EPS: $0.19 (Est. $0.18) 🟢
🔹 Same Restaurant Sales: 9.0%
🔹 Restaurant-Level Profit Margin: 25.7%; -60 bps YoYAffirms FY26 Guide:
🔹 Adj. EBITDA: $181.0M-$191.0M (Est. $188M) 🟡
🔹 Same…— Wall St Engine (@wallstengine) August 11, 2026
Net income rose to $23 million from $18.4 million a year earlier. Diluted earnings per share came in at $0.19, topping the $0.18 analyst estimate. Adjusted EBITDA climbed 30% to $54.7 million.
Same-restaurant sales grew 9%, with guest traffic up 5.3% and a 3.7% contribution from higher prices and menu mix.
CAVA opened 17 net new restaurants in the quarter, ending the period with 476 locations across 29 states and Washington, D.C. New markets included Indiana and Ohio. The company plans to enter Las Vegas in the second half of 2026 and the Bay Area in 2027.
Systemwide average unit volumes reached $3.1 million, and new restaurant productivity stayed above 100%.
Margins Under Pressure
Restaurant-level profit rose 28.1% to $93.8 million, but the margin narrowed to 25.7% from 26.3% a year ago.
Food, beverage and packaging costs rose 50 basis points to 30% of revenue, largely tied to the April launch of Pomegranate Glazed Salmon. Labor costs edged up 30 basis points to 25.3% of revenue following a 3% wage investment. A higher share of third-party delivery orders pushed other operating expenses up 40 basis points to 12.8% of revenue.
CFO Tricia Tolivar said food costs are expected to keep rising as a percentage of revenue through the rest of the year due to fuel surcharges and the rollout of pre-marinated chicken.
CAVA maintained its full-year restaurant-level margin guidance of 23.7% to 24.3% and reiterated its adjusted EBITDA outlook of $181 million to $191 million.
Sales Recovered After Cyclospora Scare
Cava said early third-quarter sales were dented by consumer concern over a Cyclospora outbreak linked to leafy greens. The company does not source leafy greens from Mexico and does not serve iceberg lettuce, but felt the indirect impact.
Tolivar said same-restaurant sales have since recovered to mid-single-digit growth.
CAVA also said it has not seen direct effects from a separate Salmonella outbreak and does not source from the farms involved.
The company ended the quarter debt-free with $435.6 million in cash and investments and an undrawn $150 million revolving credit facility.
Cash flow from operations reached $134.5 million through the first half, up from $98.9 million a year earlier. Year-to-date free cash flow totaled $44.8 million.
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