CAVA Group Q1 Earnings Call Highlights

Key Points

• CAVA posted strong Q1 2026 results, with revenue up 32.2% to $434.4 million, same-restaurant sales up 9.7%, and traffic up 6.8%. Adjusted EBITDA rose 37.6% year over year to $61.7 million.
• Restaurant expansion remains a major growth driver: CAVA opened 20 net new locations in the quarter and ended with 459 restaurants across 29 states and D.C. The company raised its full-year new opening target to 75 to 77 restaurants.
• Management kept a disciplined pricing stance, saying it does not plan additional price increases to offset cost pressures and prefers to absorb some inflationary impacts. Full-year guidance was updated to call for 4.5% to 6.5% same-restaurant sales growth and $181 million to $191 million of adjusted EBITDA.

CAVA Group NYSE: CAVA reported strong first-quarter 2026 results, with executives pointing to traffic gains, new restaurant performance and continued demand for Mediterranean cuisine as key drivers of growth.

On the company’s earnings call, Co-Founder and CEO Brett Schulman said CAVA “further solidified” its position in the Mediterranean category while navigating a broader environment marked by macroeconomic and geopolitical uncertainty. The company reported a 32.2% increase in revenue, same-restaurant sales growth of 9.7% and traffic growth of 6.8% for the quarter.

CFO Tricia Tolivar said first-quarter revenue rose to $434.4 million. CAVA opened 20 net new restaurants during the period, ending the quarter with 459 restaurants. The company said its systemwide average unit volume is now $3 million.

Traffic Growth Drives Same-Restaurant Sales

CAVA’s 9.7% same-restaurant sales increase was driven primarily by the 6.8% rise in traffic. Schulman attributed the performance to the company’s value proposition, menu positioning and hospitality model.

Schulman said CAVA has avoided broad discounting and promotional activity, instead maintaining a long-term pricing strategy. He said the company took an approximate 1.4% price increase in January while holding base bowl and pita pricing flat. He added that CAVA’s price adjustments since the end of 2019 have represented “only slightly more than half of cumulative CPI.”

During the question-and-answer session, Schulman said the company does not currently plan to take additional pricing to offset potential energy-related cost pressures. He said CAVA intends to absorb some of those pressures rather than pass them along to guests.

“We are very focused on making sure we don’t have to pass through any inflationary pressures to our guests,” Schulman said.

Tolivar said same-restaurant sales trends in the second quarter were tracking in line with the first quarter and above the company’s revised full-year outlook. However, she said the guidance assumes more moderate mid-single-digit comparable sales growth for the balance of the year.

Restaurant Expansion Continues

CAVA opened 20 net new restaurants in the first quarter and ended the period with locations across 29 states and the District of Columbia. Schulman highlighted recent market entries in Cincinnati, St. Louis and Columbus, and said the company plans to enter Minneapolis later this year.

Tolivar said new restaurant openings are exceeding expectations in both revenue and margin performance, with new restaurant productivity above 100%. In response to an analyst question, she said the strength has been broad-based across geographies, formats and markets.

The company raised its full-year outlook for net new CAVA restaurant openings to a range of 75 to 77. Tolivar said the remaining openings for the year are expected to be “fairly ratable” after the first quarter, noting that the first quarter included 16 weeks while the remaining quarters each include 12 weeks.

When asked about whether CAVA could use its cash position to accelerate development through asset deals, Tolivar said the company has flexibility but remains focused on disciplined growth. She said the “highest and best use” of capital is new restaurant openings, while also noting that talent development remains the largest governor on growth.

Margins, Costs and Full-Year Guidance

CAVA restaurant-level profit was $108.9 million, or 25.1% of revenue, compared with $82.3 million, also 25.1% of revenue, in the prior-year period. Adjusted EBITDA rose 37.6% year over year to $61.7 million.

Food, beverage and packaging costs were 29.1% of revenue, down 20 basis points from the first quarter of 2025, largely due to favorable mix. Labor and related costs were 25.7% of revenue, approximately flat year over year, as sales leverage offset a 2% investment in team member wages, including the expansion of the assistant general manager role.

Occupancy and related expenses improved 50 basis points to 6.9% of revenue, while other operating expenses increased 80 basis points to 13.3% of revenue. Tolivar said that increase was primarily driven by a higher mix of third-party delivery and other smaller items.

Net income was $23.6 million, down from $25.7 million in the prior-year quarter, while diluted earnings per share were $0.20 compared with $0.22 a year earlier. Tolivar said the decrease reflected a lower tax benefit from equity-based compensation, partially offset by nearly 50% higher earnings before taxes.

CAVA ended the quarter with no debt outstanding, $403 million in cash and investments, and access to a $150 million revolver. Cash flow from operations was $64.1 million, and free cash flow was $15.5 million.

For fiscal 2026, CAVA raised or updated its outlook to include:

• 75 to 77 net new CAVA restaurant openings;
• Same-restaurant sales growth of 4.5% to 6.5%;
• Restaurant-level profit margin of 23.7% to 24.3%;
• Pre-opening costs of $22 million to $22.5 million;
• Adjusted EBITDA of $181 million to $191 million, including the burden of pre-opening costs.

Tolivar said the margin outlook includes a 20- to 40-basis-point headwind tied to a cautious view on energy costs, as well as additional labor investments. She also said the national launch of salmon is expected to be a restaurant-level margin rate headwind of approximately 100 basis points beginning in the second quarter, though it is priced to be neutral on penny profit.

Menu Innovation and Digital Engagement

Schulman said CAVA brought back its Roasted White Sweet Potato in January and saw a warm reception from guests. He said the item drove increased visit frequency among returning guests and introduced the brand to new customers.

The company also launched its first seafood offering, Pomegranate Glazed Salmon, across all restaurants nationwide. Schulman described salmon as a natural extension of the Mediterranean menu. In response to an analyst question, he said early performance has been in line with market tests and expectations. He added that CAVA has not committed to making salmon a permanent everyday item but expects it to run through at least the fourth quarter.

Schulman also discussed Roasted Garlic Shrimp, which has moved from an operations test into a broader market test in Northern New Jersey and Nashville. He said CAVA continues to use a disciplined stage-gate process for innovation, with one larger “tentpole” menu moment each year supported by seasonal items and collaborations.

CAVA also leaned into digital engagement during the quarter through its loyalty program, including a Flavor Bracket in-app game and partnerships with basketball players Azzi Fudd and Alex Karaban. Tolivar said the loyalty program has increased the company’s loyalty pool, improved frequency and shown progression across tiers in line with expectations.

Technology and Talent Investments

Schulman said CAVA launched Cava Core, a modern data platform intended to unify data across the business. The company is also rolling out CAVA Current, described as an edge-enabled, real-time commerce platform that is already processing orders across restaurants.

Schulman said the systems are intended to support more personalized guest experiences, predictive operations, demand forecasting, staffing alignment, prep planning and inventory management. He said the company views technology as a way to “enhance the human experience, not replace it.”

The company also highlighted its Flavor Your Future talent platform and the rollout of an assistant general manager position. Schulman said restaurants with AGM coverage are outperforming those without, as the role adds leadership support during dinner and weekend shifts. Tolivar said AGM coverage is approaching more than 50% of locations, with a focus on higher-volume restaurants.

Schulman closed the call by thanking CAVA’s nearly 15,000 team members and said the company remains focused on making Mediterranean cuisine more accessible while investing in people and restaurant execution.

About CAVA Group NYSE: CAVA

CAVA Group, Inc NYSE: CAVA is a leading fast-casual restaurant company specializing in Mediterranean-inspired cuisine. Operating under the CAVA brand, the company offers customizable bowls, pitas and salads built around a variety of proteins, grains, fresh vegetables and house-made spreads. With a focus on high-quality ingredients and made-to-order preparation, CAVA aims to deliver a casual yet elevated dining experience for dine-in, takeout and catering customers.

Founded in 2011 in the Washington, DC metro area by Ike Grigoropoulos, Dimitri Katsanis and Brett Schulman, CAVA has pursued an aggressive growth strategy that included the 2018 acquisition of Zoe's Kitchen.

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