CAVA Q2 2026 earnings: Revenue rose 31.3% as restaurant margins narrowed

CAVA Group (NYSE: CAVA) reported fiscal Q2 2026 consolidated revenue of $368.4 million, approximately 31.3% above $280.6 million a year earlier, while diluted EPS increased to $0.19 from $0.16. CAVA segment revenue rose 31.3% to $365.4 million, supported by new restaurants and 9.0% same-restaurant sales growth. Profit dollars increased, but restaurant-level margin narrowed as product costs, delivery mix, and wage investments offset some of the benefit from higher sales.

Core financial results

Top-line growth reflected both restaurant expansion and higher sales at established locations. CAVA said the 94 net new restaurants opened during or after fiscal Q2 2025 contributed to the increase, alongside same-restaurant sales growth.

Net income and adjusted EBITDA grew by roughly 25% and 30%, respectively. However, restaurant-level, net income, and adjusted EBITDA margins were slightly lower than a year ago, showing that revenue growth did not translate into uniform margin expansion.

Adjusted EBITDA is a non-GAAP measure. Consolidated revenue and CAVA segment revenue are separate reported measures and should not be treated as interchangeable.

Restaurant growth and same-store performance

CAVA opened 17 net new restaurants during the quarter, ending the period with 476 locations, up 19.6% from 398 a year earlier. Management said newly opened restaurants continued to exceed its performance expectations, supporting its view that the concept can translate to additional markets.

Same-restaurant sales increased 9.0%. Guest traffic contributed 5.3 percentage points, while menu pricing and product mix contributed 3.7 points, indicating that customer visits—not only higher prices—were an important growth driver. Annualized unit volume increased to $3.1 million from $2.9 million, while digital channels represented 39.0% of revenue.

Sales growth lifted profit dollars, but product, delivery, and wage costs narrowed margins

Restaurant-level profit increased by $20.6 million, but it grew more slowly than CAVA segment revenue. Food, beverage, and packaging costs rose to 30.0% of segment revenue from 29.5%, labor increased to 25.3% from 25.0%, and other operating expenses increased to 12.8% from 12.4%. Lower occupancy expense as a percentage of revenue provided a partial offset.

CAVA attributed the margin decline to input costs associated with the April launch of Pomegranate Glazed Salmon, a higher mix of third-party delivery, and incremental wage investments. The salmon product and delivery mix were dilutive to the margin rate but still added profit dollars because of their higher guest price.

Corporate cost leverage helped cushion the restaurant-level pressure. General and administrative expenses declined to 10.8% of consolidated revenue from 11.4%, mainly because higher sales absorbed more fixed costs, the prior-year period included the timing of the CAVA Connect conference, and performance-based compensation timing differed. This leverage helped operating margin improve even as restaurant-level margin declined. Net margin nevertheless fell because of a higher effective tax rate and increased depreciation and amortization.

Cash flow and balance sheet

The cash-flow figures provided are for the first 28 weeks of fiscal 2026 rather than Q2 alone. Year-to-date operating cash flow was $134.5 million, while non-GAAP free cash flow was $44.8 million.

Cash and cash equivalents increased to $322.8 million at July 12, 2026, from $282.9 million at December 28, 2025. Together with $112.8 million of investments at fair value, CAVA reported approximately $435.6 million in cash and investments. Total liabilities were $658.5 million, compared with $580.4 million at the end of fiscal 2025, while stockholders’ equity increased to $841.3 million.

Fiscal 2026 guidance

CAVA reaffirmed its full-year fiscal 2026 outlook across all disclosed measures. The unchanged guidance includes same-restaurant sales growth below the Q2 rate and a full-year restaurant-level margin below the quarter’s 25.7%, making traffic, cost trends, and new-unit execution important measures for the remainder of the year.

Recent insider transactions

The supplied insider dataset reports 121,191 shares purchased across 21 transactions and 3,145,214 shares sold across 14 transactions over the prior six months, resulting in net sales of 3,024,023 shares. Recent reported transactions included six director stock grants and two direct sales; these disclosures do not by themselves establish insiders’ views of CAVA’s prospects.

Risks investors should monitor

• Restaurant margin pressure: Product input costs, third-party delivery mix, and wage investments already reduced restaurant-level margin by 60 basis points. Continued pressure in these areas could limit the profit benefit from higher sales.
• Expansion execution: The full-year plan calls for 75 to 77 net new restaurants and $22.0 million to $22.5 million of pre-opening costs. Maintaining new-unit performance while managing opening expenses is central to delivering the outlook.
• Dependence on traffic growth: Guest traffic produced 5.3 points of the quarter’s 9.0% same-restaurant sales increase. A slowdown in visits would reduce sales growth and the operating leverage that helped offset higher restaurant costs.

Summary

CAVA’s fiscal Q2 2026 growth came from a combination of restaurant expansion, higher guest traffic, and pricing and product mix. These factors lifted revenue, net income, and adjusted EBITDA, but restaurant-level margin narrowed because of salmon input costs, greater third-party delivery activity, and wage investments. The key issues for the rest of fiscal 2026 are whether traffic remains supportive, new restaurants sustain their early performance, and cost management keeps results within the reaffirmed full-year guidance.