Hội nghị công bố kết quả kinh doanh quý 3/2026 của CAVA: Doanh thu tăng 22.1%, cập nhật định hướng năm 2026

Điểm nhấn chính

• Doanh thu của CAVA tăng 22,1% so với cùng kỳ năm trước lên 353,7 triệu USD, nhờ việc mở rộng chuỗi nhà hàng và tăng trưởng doanh số cùng cửa hàng đạt 3,1%.
• Lượng khách tăng trưởng dương nhẹ. Ban lãnh đạo ước tính rằng ký sinh trùng Cyclospora và những lo ngại chung về tiêu thụ nông sản tươi sống đã làm giảm 150 điểm cơ bản trong tăng trưởng doanh số cùng cửa hàng.
• Lợi nhuận cấp nhà hàng tăng 16,2% lên 82,7 triệu USD, trong khi biên lợi nhuận giảm từ 24,6% xuống 23,4% do các khoản đầu tư cho nhân sự, tỷ trọng giao hàng qua bên thứ ba tăng lên, cùng chi phí sửa chữa và bảo trì cao hơn.
• EBITDA điều chỉnh tăng 5,7% lên 42,3 triệu USD. Thu nhập ròng giảm từ 14,7 triệu USD xuống 13,2 triệu USD, trong khi EPS pha loãng giảm từ 0,12 USD xuống 0,11 USD.
• CAVA đã mở ròng 24 nhà hàng mới và kết thúc quý với 500 địa điểm, tăng 20,5% so với cùng kỳ năm trước. Hiệu suất của các nhà hàng mới vẫn duy trì ở mức xấp xỉ 100%.
• Ban lãnh đạo đã cập nhật triển vọng năm 2026 với 76–78 nhà hàng mở mới ròng, tăng trưởng doanh số cùng cửa hàng đạt 6%–7%, và EBITDA điều chỉnh đạt 184 triệu–189 triệu USD.

Dữ liệu tài chính chính

Chi phí thực phẩm, đồ uống và bao bì chiếm 30,0% doanh thu, giảm 10 điểm cơ bản so với cùng kỳ năm trước. Việc thu hồi thuế quan và cơ cấu sản phẩm thuận lợi đã bị bù trừ một phần bởi các chi phí liên quan đến món cá hồi sốt lựu và phụ phí nhiên liệu.

Chi phí nhân sự và các chi phí liên quan tăng 50 điểm cơ bản lên 26,0% doanh thu. Mức tăng này phản ánh khoản đầu tư tăng lương khoảng 3%, việc mở rộng vai trò Trợ lý Giám đốc Nhà hàng, cùng số giờ làm việc bổ sung của nhân viên nhằm hỗ trợ dịch vụ và việc khai trương các nhà hàng mới.

Hiệu quả kinh doanh và hoạt động

CAVA đã đạt cột mốc 500 nhà hàng trên khắp 30 tiểu bang và Đặc khu Columbia, vượt tiến độ so với lộ trình đã đề ra là đạt ít nhất 1.000 nhà hàng vào năm 2032. Ban lãnh đạo cho biết kế hoạch phát triển mở rộng vẫn rất vững chắc và dự kiến sẽ tiến vào Las Vegas vào cuối năm 2026.

Hiệu suất của các nhà hàng mới duy trì ở mức xấp xỉ 100%. Công ty cho biết các nhà hàng mới tiếp tục mang lại tỷ suất sinh lời trên vốn thực góp (cash-on-cash return) hơn 40% trong năm đầu tiên. CAVA cũng đã tăng cường đào tạo trước khi mở cửa và hỗ trợ sau khai trương, bao gồm việc đưa các giám đốc nhà hàng và quản lý theo giờ vào làm việc sớm hơn.

Ban lãnh đạo đang đầu tư vào hoạt động vận hành nhà hàng thông qua món gà ướp sẵn, máy cắt rau củ quả, Trung tâm Điều hành CAVA (CAVA Command Center) và Cổng thông tin Quản lý Vận hành (Operator Portal). Các công cụ này nhằm đơn giản hóa khâu chuẩn bị, tăng cường kiểm soát an toàn thực phẩm, đồng thời giúp các nhà quản lý kiểm soát theo thời gian thực đối với các món hết hàng và điều tiết đơn đặt hàng trực tuyến.

Project Soul và Project Sun-Kissed được thiết kế nhằm tạo ra không gian dùng bữa ấm cúng hơn. Ban lãnh đạo cho biết một địa điểm thử nghiệm tại khu vực đô thị đã ghi nhận mức tăng 18% vào khung giờ ăn tối sau khi được cải tạo theo Project Sun-Kissed, dù không cung cấp kết quả trên toàn hệ thống.

Món cá hồi sốt lựu đạt hiệu quả kinh doanh đúng như kỳ vọng của ban lãnh đạo và sẽ tiếp tục có mặt trong thực đơn cho đến hết mùa xuân. CAVA đã hoàn tất việc thử nghiệm thị trường và vận hành đối với món tôm nướng tỏi, đồng thời dự kiến sẽ cung cấp thêm thông tin chi tiết vào quý tới về lộ trình triển khai trên toàn quốc.

Chương trình khách hàng thân thiết sẽ chuyển sang nền tảng mới, tạo tiền đề cho giai đoạn thứ ba tập trung vào cá nhân hóa sâu hơn trong vòng 12–18 tháng tới. Ban lãnh đạo cho biết chương trình phân hạng thành viên này đã tạo ra các cơ hội nhằm khuyến khích khách hàng tăng tần suất ghé thăm.

Triển vọng kinh doanh của ban lãnh đạo

Ban lãnh đạo cho biết xu hướng doanh số tương đương đã tăng tốc vào cuối Quý 3 và đà cải thiện này tiếp tục kéo dài sang Quý 4. Công ty nhận định mức trung vị của phạm vi dự báo cả năm là kịch bản có khả năng xảy ra cao nhất.

Đối với năm 2027, ban lãnh đạo kỳ vọng số lượng nhà hàng sẽ tăng trưởng ít nhất 16%, dựa trên tiềm năng của quỹ mặt bằng bất động sản. Công ty cũng tái khẳng định mô hình tăng trưởng dài hạn với mức tăng trưởng doanh số cùng cửa hàng ở mức một chữ số từ thấp đến trung bình.

CAVA dự kiến chi phí thực phẩm, đồ uống và bao bì tính theo tỷ lệ phần trăm trên doanh thu sẽ tăng trong Quý 4 do phụ phí nhiên liệu và việc tiếp tục triển khai món gà ướp sẵn. Chi phí quản lý doanh nghiệp (G&A) trong Quý 4 tính theo giá trị USD dự kiến sẽ cao hơn một chút so với Quý 3.

Rủi ro và các khía cạnh cần theo dõi

• Ký sinh trùng Cyclospora và những lo ngại chung về nông sản tươi sống đã làm giảm tăng trưởng doanh số cùng cửa hàng trong Quý 3 ước tính khoảng 150 điểm cơ bản.
• Ban lãnh đạo viện dẫn giá xăng tăng là một nguyên nhân khác gây ra biến động về lượng khách trong quý, mặc dù áp lực này đã hạ nhiệt vào cuối quý.
• Biên lợi nhuận cấp nhà hàng bị thu hẹp khi CAVA đầu tư vào tiền lương, nhân sự, bảo trì và hỗ trợ các nhà hàng mới.
• Dịch vụ giao hàng qua bên thứ ba vẫn làm suy giảm tỷ lệ phần trăm biên lợi nhuận, dù ban lãnh đạo cho biết dịch vụ này đóng góp giá trị lợi nhuận biên dương nhờ mức định giá cao hơn đối với khách hàng.
• Món gà ướp sẵn và phụ phí nhiên liệu dự kiến sẽ làm tăng chi phí thực phẩm trong Quý 4.
• Thu nhập ròng và EPS sụt giảm chủ yếu do chi phí khấu hao tài sản cố định hữu hình và vô hình cao hơn cùng chi phí thù lao bằng cổ phiếu gia tăng, được bù trừ một phần nhờ hiệu quả hoạt động được cải thiện.

Điểm nhấn phiên hỏi đáp với chuyên gia phân tích

Đầu tư nhân sự và tỷ lệ luân chuyển lao động: Ban lãnh đạo cho biết các giám đốc nhà hàng thuộc chương trình Academy có tỷ lệ nghỉ việc ở mức một chữ số từ thấp đến trung bình. Đối với các giám đốc nhà hàng được đào tạo thêm ba tháng, tỷ lệ nghỉ việc đã giảm xuống gần bằng 0 hoặc ở mức một chữ số thấp. CAVA dự định tiếp tục các khoản đầu tư có mục tiêu vào nhân sự tại những mảng mà ban lãnh đạo nhận thấy mang lại lợi ích cho việc giữ chân nhân viên và nâng cao sự hài lòng của khách hàng.

Chi phí trước khai trương: Khoản hỗ trợ tăng thêm dự kiến sẽ làm phát sinh thêm khoảng 50.000–60.000 USD cho mỗi nhà hàng so với mức chi tiêu trước khai trương trong lịch sử. Ban lãnh đạo dự kiến khoản đầu tư này sẽ tiếp tục được duy trì, dù chi phí trên mỗi nhà hàng vào năm 2027 dự kiến sẽ không cao như mức hiện tại.

Vận hành nhà hàng mới: CAVA đã tạm thời tắt dịch vụ giao hàng qua bên thứ ba và dịch vụ tiệc lưu động tại một số nhà hàng mới để đội ngũ nhân viên có thể tập trung phục vụ khách tại cửa hàng. Ban lãnh đạo cho biết điều này có thể làm giảm nhẹ doanh số trong ngắn hạn nhưng đã cải thiện điểm số trải nghiệm của khách hàng.

Hành vi người tiêu dùng: Các nhà hàng tại những thị trường có thu nhập hộ gia đình trung vị thấp hơn tiếp tục ghi nhận tăng trưởng doanh số cùng cửa hàng mạnh nhất. Ban lãnh đạo cho rằng điều này xuất phát từ mức tăng trưởng số lượng giao dịch, đồng thời lưu ý rằng các địa điểm này cũng có tỷ lệ gọi kèm protein cao cấp cao hơn.

Dịch vụ tiệc lưu động (Catering): CAVA đang thử nghiệm mô hình tiệc lưu động theo cụm trung tâm - vệ tinh (hub-and-satellite) so với phương pháp phục vụ tại từng nhà hàng rộng rãi hơn tại Houston. Ban lãnh đạo dự kiến sẽ xác định chiến lược triển khai trong tương lai vào đầu năm 2027.

Phân bổ vốn: Hội đồng quản trị đã phê chuẩn chương trình mua lại cổ phiếu trị giá lên tới 100 triệu USD, nhưng chưa có cổ phiếu nào được mua lại vào thời điểm diễn ra cuộc họp. Ban lãnh đạo cho biết việc mở các nhà hàng mới vẫn là ưu tiên sử dụng vốn cao nhất.

Toàn văn nội dung cuộc họp báo cáo kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Hello, everyone. Thank you for joining us, and welcome to CAVA's Third Quarter 2026 Financial Results Conference Call. [Operator Instructions]

I will now hand the conference over to Matt Milanovich, Head of Investor Relations. Matt, please go ahead.

Matt Milanovich

Welcome to CAVA's third quarter 2026 financial results conference call. Before we begin, if you do not already have a copy, the earnings release and related 8-K furnished to the SEC are available on our website at investor.cava.com. The purpose of this conference call is to give investors further details regarding the company's financial results as well as a general update on the company's progress.

You will find reconciliations of any non-GAAP financial measure discussed on today's call to the most directly comparable financial measure calculated in accordance with GAAP to the extent available without unreasonable efforts in today's earnings release and supplemental deck, each of which is posted on the company's website.

Before we begin, let me remind everyone that this call will contain forward-looking statements. For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements. Investors should be aware that any forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those discussed here today. These risk factors are explained in detail in CAVA's most recent annual report on Form 10-K as may be updated by its reports on Form 10-Q and other filings with the SEC. Please refer to these filings for a more detailed discussion of forward-looking statements and the risks and uncertainties of such statements.

All forward-looking statements are made as of today, and except as required by law, CAVA undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

And now I'll turn the call over to the company's Co-Founder and CEO, Brett Schulman.

Brett Schulman

Thanks, Matt, and welcome to the call, everyone. During the third quarter, we continued to gain market share and saw strength in new restaurant openings as we brought CAVA to more communities across the country. We also reached an important milestone as we celebrated 500 restaurants in Minnesota ahead of schedule on our goal of at least 1,000 restaurants by 2032. As consumers seek real food that tastes as good as it makes them feel, combined with the human connection that brings people together, our flavors, hospitality, and generosity are resonating more than ever. That combination is at the heart of what makes CAVA distinctive and reinforces our belief that CAVA is well positioned for this moment. With significant growth opportunities ahead, we remain confident in our ability to earn lasting guest loyalty, define the Mediterranean category, and create value for our shareholders for years to come.

Our third quarter financial highlights include a 22.1% increase in CAVA revenue, same-restaurant sales of 3.1%, 24 net new restaurants, ending the quarter with 500 restaurants, a 20.5% increase year-over-year.

Adjusted EBITDA of $42.3 million a 5.7% increase over the third quarter of 2025, net income of $13.2 million and $37.1 million in year-to-date free cash flow. The impact of broader concerns around the consumption of fresh produce at the beginning of the quarter, followed by the reemergence of high gas prices impacted traffic across the category.

Importantly, these factors do not change the structural strength of our business, the health of our brand, or our ability to execute against the long-term opportunity. While we are not immune to the environment around us, we are focused on what we can control, running great restaurants, delivering differentiated value through high-quality Mediterranean food and hospitality and continuing to invest with discipline in our teams and guests for the long-term growth. We saw that shine through as we exited the quarter and broader concerns abated.

Within this environment, our new restaurant productivity remained approximately 100%. Our development pipeline remains strong, and our newest restaurants continue to reinforce the portability and resilience of the CAVA concept. We have always focused on building this business for the long-term, not just for the next quarter. The same structural advantages that have driven our growth over our history remain intact, a category-defining brand, a powerful unit economic model, significant white space, and a team that executes with focus and consistency. This, coupled with a strong balance sheet and a robust development pipeline gives us confidence in our ability to navigate different operating environments while continuing to invest in long-term sustainable growth. That long-term focus is brought to life through our first pillar, expand our Mediterranean way in communities across the country.

During the third quarter, we opened 24 net new restaurants, ending the quarter with 500 locations across 30 states in the District of Columbia. As I mentioned, we opened our highly anticipated 500th restaurant and my co-founders, Ted, Ike, and Dimitri joined me for a ribbon cutting and celebration in Minneapolis as we continue our expansion in the Midwest. Reaching 500 restaurants ahead of schedule on our commitment of 1,000 restaurants by 2032 is more than a milestone for CAVA. It is evidence of the proven portability of our concept and the strength of the development pipeline we have built.

We are also preparing to enter the Las Vegas market later this year marking another important step in CAVA's national expansion. As we are welcomed into new communities, we remain equally focused on ensuring that each restaurant reflects the warmth, hospitality, and Mediterranean way that defines the CAVA experience. Recent openings continue to bring Project Soul to life, our restaurant design initiative focused on creating warm, welcoming places where guests want to spend time.

Our location at 56th and 6th in New York City showcases the new Project Soul prototype with warmer tones, greenery, and natural light creating a more inviting dining room. As consumers increasingly seek authentic moments and inviting aesthetics, we are building upon Project Soul with the launch of Project Sun-Kissed, which incorporates the core elements from Project Soul into a reimaging for legacy restaurants. We will have more details about these investments in the coming quarters. Just as our environments invite meaningful moments and deepen relationships with our guests, so do our bold Mediterranean flavors.

Our pomegranate glazed salmon performed in line with our expectations and demonstrated both our ability to extend into seafood in a way that is authentic to CAVA and the trust guests have in us to bring new Mediterranean flavors to their meals. In that spirit, we have completed our roasted garlic shrimp market and operational testing and are looking forward to sharing more next quarter on the projected national rollout time line.

That same disciplined approach to innovation comes through with our new culinary launches. In October, we introduced our Greek Goddess dressing, a twist on our Greek Green Goddess dip sold in grocery channels and a pomegranate apple drink that balances slightly sweet and tart flavors in a vibrant red sip that's made for crisp fall days. We launched our new menu with a larger-than-life Greek Goddess etched in stone in Flatiron Plaza in New York, driving social buzz and consumer engagement. We know these pulses of seasonal innovation across chips, drinks, and dressings keeps the menu fresh and exciting for our guests without overcomplicating operations.

We are also excited to announce the launch of new packaging for our dips and spreads at the end of the year for our CPG business. This refreshed packaging is designed to create a stronger link between the CAVA experience guests know and love in our restaurants and the food they bring to their homes. As we continue to introduce more people to the Mediterranean Way, this CPG business is another opportunity to extend the warmth, flavor, and quality of CAVA beyond our restaurants while reinforcing 1 cohesive brand wherever guests engage with us.

Shifting to our second strategic pillar, deepened personal relationships with guests even as we scale. This past quarter saw the continued growth of our loyalty platform and a focus on in-person authentic moments with our guests. Over the last few months, we hosted CAVA Mediterranean Beach Club experiences at UT Austin, SMU, and the Minnesota/Michigan football game.

At UT, Austin, that engagement translated into an encouraging loyalty signal. Loyalty purchases increased 8% in the local market, the week after the pop-up compared to the prior week. Just as importantly, we want every guest to feel welcomed into CAVA, whether they are visiting us for the first time or have been part of our community for years. We recently launched a 1-day mini bag drop where guests received a miniature version of CAVA's iconic yellow tote bag with purchase. It was a small but meaningful way to surprise and delight guests with something fun and wearable. These moments are made possible through the team members who show up every day to bring care and consistency to the CAVA experience, reflecting the focus of our third strategic pillar, run great restaurants every location, every shift.

Running great restaurants starts with our ability to consistently deliver fresh, high-quality food, and Mediterranean hospitality that guests expect from CAVA. Fresh food made in-house daily is core to who we are, and it requires meaningful prep work, strong supply chain collaboration, and disciplined restaurant leadership. That is why we continue to invest in tools and processes that make it easier for our teams to deliver consistent, high-quality food every day, from the premarinated chicken we are currently rolling out that reduces raw poultry handling in our restaurants, simplifies back-of-house processes and is designed to strengthen food safety controls while improving operational and flavor consistency to the produce slicers that simplify preparation of our beloved cucumber and pickle toppings.

In addition, we are rolling out a new operator portal to simplify the GM management of out-of-stock items and their control of digital order throttles. These investments are about reducing complexity for our teams and creating better, more consistent experiences for our guests.

Alongside our investments in tools and process simplification we are learning from our teams delivering the most exceptional guest experiences. This past summer, we launched our Welcome to Our Table hospitality contest with our GMs to identify and recognize best practices across the system as part of a broader effort embedding epic hospitality across CAVA. Approximately 2/3 of our restaurants saw an improvement in guest experience during the exercise giving us a clearer view into the behaviors and routines that are driving results.

We are now focused on scaling these practices across the system to give our teams the support they need to deliver hospitality consistently as our AUVs grow. In addition to year-over-year growth in our AUVs, demand for CAVA remains strong in our new restaurant openings, where we continue to see new restaurant productivity of approximately 100%. To support this demand, we have increased our focus on preopening leadership readiness and training as well as the support our teams receive after opening.

Preliminary results are promising, with new restaurant openings that received investments, seeing higher guest satisfaction and lower turnover rates. Sustaining that energy requires strong leadership and real ownership at the restaurant level. That's why at CAVA, we continue to invest in our general managers and provide them with opportunities to create value for themselves as they create value for our guests and for our shareholders. This past year, we introduced annual long-term incentive equity grants for GMs to truly have ownership in our business. Our Academy GMs now at 110 locations receive elevated compensation for their Academy certification. We also provide additional incentives tied to GM hiring and promotions, recognizing that great leaders do more than run strong restaurants. They build strong teams and develop the next generation of leaders. We will have more in the coming quarters on additional opportunities for our GMs to participate in the value creation they drive. These efforts are all part of Flavor Your Future and our ongoing commitment to making CAVA the best GM role in the industry.

The restaurant industry is one of the few industries where anyone can carve a path for themselves. We've always said that as a team member, if you have the will and develop the skill in 24 to 36 months, you can be running a multimillion dollar business making 6 figures. But at CAVA, our team members can build a career, not just have employment. We want our GMs to have meaningful opportunities to grow, the tools and capabilities to lead with confidence and a tangible connection to the success they help create.

In that spirit, we recently rolled out the CAVA Command Center, which acts as a single pane of glass for operational insights and provides a centralized way for operators to track the health of their restaurant. It gives GM's real-time visibility into key restaurant vitals with the ability to benchmark performance against peers and across the broader system. The new command center helps leaders identify opportunities faster, recognize what is working, coach teams more effectively and build a strong sense of ownership and accountability for restaurant performance and team member development. Capabilities like CAVA Command Center and the Operator Portal mentioned earlier are made possible by our new CAVA Core Data Foundation. Early results have been encouraging, and we are beginning to leverage next-gen capabilities built upon CAVA Core across our organization, whether in our restaurants with operational insights and our analytics teams with enhanced business intelligence, or through deeper customer insights, enabling marketing personalization.

I want to close with a note we received from a guest at our Kenwood restaurant in Cincinnati, the guest has celiac disease and shared how a team member took the time to understand her needs, follow the appropriate food safety steps, helped her navigate the menu and even prepare the fresh avocado away from the pita bread. She described the experience of some of the best service she had received in a restaurant, and she said she felt safe, welcomed and eager to return. That is the kind of care and ownership from our teams we want every guest to feel at CAVA, and a great example of team members, bringing Mediterranean hospitality to life. The progress we have made this year is a direct reflection of the commitment of our more than 15,000 team members across the U.S. to our culture, our guests, and our collective ambition. I want to thank each of them for the care, energy, and ownership they bring to CAVA every day.

With that, I'll turn it over to Tricia to walk you through our third quarter results and outlook.

Tricia Tolivar

Thanks, Brett, and hello, everyone. CAVA revenue in the third quarter of 2026 grew 22.1% year-over-year to $353.7 million. During the quarter, we opened 24 net new restaurants, bringing our total CAVA restaurant count to 500. Same-restaurant sales increased by 3.1%, primarily from menu price and product mix with guest traffic slightly positive. The estimated effect on same-restaurant sales from Cyclospora and broader concerns around fresh produce consumption was 150 basis points for the quarter. As Brett noted, the impact was category-wide, and we continue to gain market share while maintaining positive traffic and strong new restaurant performance for the quarter.

CAVA restaurant-level profit in the third quarter was $82.7 million or 23.4% of revenue compared to $71.2 million or 24.6% of revenue in the prior year quarter, representing a 16.2% increase. The decrease as a percent of revenue was driven by incremental labor investments, a higher mix of third-party delivery as well as investments in repairs and maintenance, partially offset by leverage from higher sales. As previously shared, third-party delivery is dilutive to margin rate but has a positive impact on margin dollars due to a higher guest price. Importantly, these investments are supporting higher guest experience scores, improved new restaurant readiness, and the continued strength of our development pipeline. We remain focused on converting sales growth into attractive long-term returns while investing ahead of the next phase of CAVA's expansion.

CAVA's food, beverage, and packaging costs were 30% of revenue, lower than the third quarter of 2025 by 10 basis points due to expected tariff recoveries in the current year quarter, the absence of tariffs incurred in the prior year quarter and favorable mix partially offset by higher input costs associated with the second quarter launch of pomegranate glazed salmon and fuel surcharges incurred during the current quarter. We anticipate CAVA's food, beverage, and packaging costs to increase as a percent of revenue for Q4 as a result of fuel surcharges and the continued rollout of premarinated chicken.

CAVA's labor and related costs were 26% of revenue, up from the third quarter of 2025 by 50 basis points. This was largely driven by an incremental 3% team member wage investment, inclusive of the expansion of our AGM role, and additional team member hours to support improved guest service and post open success, which drove higher guest experience scores.

CAVA occupancy and related expenses were 6.7% of revenue, flat from the third quarter of 2025. CAVA Other operating expenses were 13.8% of revenue, reflecting an increase of 70 basis points from the third quarter of 2025. This increase was primarily driven by a higher mix of third-party delivery and investments in repairs and maintenance.

Shifting to overall performance. Our general and administrative expenses for the quarter equity-based compensation and executive transition costs remained flat at 9.4% of revenue, primarily due to leverage from higher sales, offset by investments to support future growth. Preopening expenses were $8.4 million in the current quarter compared with $4.9 million in the prior year quarter. The $3.5 million increase includes a higher number of units under construction and additional investments in new restaurant openings to support increased volumes such as bringing in GMs and hourly managers in earlier so they can train, build confidence, and see an NRO before opening. We are seeing promising early results from these efforts, including improved GM turnover.

Adjusted EBITDA for the third quarter was $42.3 million, a 5.7% increase versus the third quarter of 2025. The increase was driven by same-restaurant sales and strength in new restaurant openings, partially offset by investments to support future growth, including preopening costs.

For the third quarter of 2026, equity-based compensation was $4.5 million. We continue to expect equity-based compensation, which includes our new programs to provide equity grants to GMs and performance-based LTI to be between $22 million and $24 million in aggregate for the full year. In the third quarter, our effective tax rate was 29.3%. For the full year of 2026, we expect our effective tax rate to be between 23% and 25%, with the rate in the second half of the year being higher than the first half of the year due to the timing of equity-based vesting. As a reminder, the increase in our tax rate in 2026 versus the prior year is due to the lower permanent benefit from equity-based compensation. Our cash taxes will continue to be immaterial until we fully utilize our net operating losses.

During the third quarter, we reported $13.2 million of net income compared to $14.7 million of net income in the third quarter of 2025. Diluted EPS was $0.11 in the third quarter compared with $0.12 in the third quarter of 2025. The decrease in net income and EPS was primarily due to higher depreciation and amortization, which includes the impact of capital investments to enhance the guest and team member experience and higher equity-based compensation, partially offset by improved operating performance.

Turning to liquidity. At the end of the quarter, we had 0 debt outstanding, $427.9 million in cash and investments and access to $150 million undrawn revolver with an option to increase our liquidity if needed. As part of our balanced approach to capital allocation, the Board authorized a share repurchase program of up to $100 million of its outstanding shares of common stock. To date, the company has not purchased any of its shares of common stock under the program. The buyback authorization is opportunistic, funded from excess cash but does not take priority over our investment in NROs and our commitment to our people, guests, and technology. Our highest and best use of capital remains opening new restaurants, which have been generating over 40% cash-on-cash returns in year 1.

Through the third quarter, cash flow from operations increased to $181.6 million in 2026 compared to $144.5 million in the prior year period. Year-to-date free cash flow was $37.1 million.

Now to our outlook for full year 2026. We are updating our guidance to expect the following: 76 to 78 net new CAVA restaurant openings, same-restaurant sales of 6% to 7%, CAVA restaurant level profit margin between 23.7% to 24%, preopening costs between $28.5 million to $29.5 million, and adjusted EBITDA, including the burden of preopening costs between $184 million and $189 million.

I'd like to provide some additional context around our updated guidance. Our outlook reflects the strength we're seeing in the business and the trends to date. Looking ahead, we remain confident in the long-term structural health of the business, reaffirmed by our strengthening AUVs and new restaurant performance.

Turning to restaurant level margin. Our guidance reflects dynamics we experienced in the third quarter as well as traditional seasonality of the business. COGS reflects the continued rollout of premarinated chicken into Q4.

On the labor front, our guidance embeds continued investments in our teams and our guests to deliver epic hospitality at every restaurant, every shift. Additionally, it reflects investments in our AGM program with around 75% of restaurants now having an AGM and more robust post opening support. Preopening expenses reflect the continued expansion of support for new unit volumes, which includes additional training for our teams ahead of opening. For G&A, we expect slightly higher spend in Q4.

As we look ahead to 2027, we remain confident in the structural foundation of the business and the durability of our long-term algorithm, which calls for low to mid-single-digit same-restaurant sales growth. In addition, given the health of our 2027 real estate pipeline, we anticipate at least 16% unit count growth.

And with that, I will turn the call back over to the operator to open it up for Q&A.

Operator

[Operator Instructions] Your first question comes from the line of Chris O'Cull with Baird.

Phần hỏi đáp

Christopher O'Cull

Brett, the updated full year guidance implies fourth quarter comps, I think, or roughly 1.5% to [ 1.6%. ] Can you share how the quarter has started or at least help us understand where within that range, current trends would put you?

Brett Schulman

Yes, Chris, thanks for the question. As we noted, beginning of Q3 was impacted by the broader concerns around produce consumption. We saw that bounce back as we noted at our Q2 earnings call, it had rebounded. And then post Labor Day, we did see some choppiness as gas prices spiked but that abated as we exited the quarter, we saw comps strengthen and we've seen those trends continue into Q4. And our range reflects what we think is the highest probability for the full year with the midpoint of the range being the highest probability within the range of what we expect for the full year.

Christopher O'Cull

Okay. And then just as a follow-up. Beyond opening restaurants, can you talk a little bit about the biggest opportunities for bringing new customers in to CAVA? And specifically, I'm just wondering whether the new CMO has identified maybe new ways to approach marketing or innovation?

Brett Schulman

Well, certainly, Chris, with our NROs opening at 100% productivity, we are getting significant awareness and pent-up demand before we open in markets. I'm very excited to have John Ludeke on board. I think our overall brand awareness and cultural relevance is something that's a huge opportunity for us. We certainly have great grassroots awareness and word of mouth and excitement and passion from our guests, but excited for John to take the brand to what we think is going to be another level in the sense of being culturally relevant and engaging existing guests as well as new guests and driving awareness across the country in a very compelling way.

Operator

Your next question comes from the line of John Ivankoe with JPMorgan.

John Ivankoe

When I was looking at the promotional calendar for the lack of the better word, you introduced salmon, in April. So you've obviously been featuring that for quite some time. So now that we've had salmon really for good 6-plus months, what have we kind of learned on that on a -- kind of on a post [indiscernible] basis. Is there anything that you would have done differently with salmon, a product like salmon in the future relative to what you did this year?

And of course, I'm going to ask the question, how does the salmon experience, if at all, influence future kind of bigger protein focuses outside of what you currently have. We might we actually have an opportunity to take one potentially higher frequency protein and replace it with a -- or actually replace it with a lower frequency protein?

Brett Schulman

Yes, John, thanks for the question. We're very pleased with the way salmon's performed. It's performed in line with expectations. We think the cadence is still appropriate. I know there's been an acceleration in the industry of LTO's in general. I think they've doubled in recent years. I think we're up to like 42,000 LTOs annually. And we're just very mindful given our dynamic growth of new restaurant openings, growth of AUVs that we do not push too many changes out on to our operators in a given year. So we feel very comfortable with the current cadence.

And within that cadence, we always look to say, how do we have the best portfolio of proteins or ingredients on our serving line to meet our guest needs and changing preferences. And seafood was an opportunity. It was our first foray with Salmon. I think one of the learnings from Salmon that was interesting is it's a 4-ounce fillet. It's the 1 protein where our guests cannot break into a half and half item, which we know our guests love to do. And so in our shrimp test, we've seen accelerated adoption because of the half-and-half opportunity that guests have with shrimp compared to Salmon. So Salmon will stay on the menu through spring. We had originally said through the end of the year. We're going to extend it to spring, and we will have more next quarter on the official launch date of shrimp. But certainly, it's a protein that our guests will be able to do half-and-half, and we think that, that can drive even increased incidence.

And the other thing I'd note is in January, we're going to bring back our fan favorite white sweet potato, which has continued to build its constituency every time we brought it back on the menu and has increased its incidence rate. And of note, a lot of that incidence to my earlier comment, is driven by half-and-half portion. So it's a unique item on our menu that guests can pair with steak or chicken as a half-and-half item that serves a unique purpose on the menu that our other proteins done. So we're always analyzing the portfolio in that sense to put forward the best group of offerings for our guests.

Operator

Your next question comes from the line of Danilo Gargiulo with Bernstein.

Danilo Gargiulo

I want to touch base on the restaurant level margin, specifically on the labor component. So in the past, you've always framed the labor as a needed investment to sustain comps but also to have better experiences for customers as well as for your own team. I'm wondering where you are in the curve of investment here, whether you're starting to see some diminishing returns on those investments. Therefore, you're getting to a point where the labor as a percentage of sales is going to be relatively stable and then potentially over time, seeing some leverage coming in as traffic rebound? Or if you see that there are still some incremental pockets of investments across your stores? And if so, if you can highlight a couple of opportunities from a labor investment that you think could be the top priority in the coming quarters?

Tricia Tolivar

Thanks, Nilo. So certainly, we're always looking at the business and wanting to make thoughtful investments to drive the business for the long-term and create a long-term durable brand that drives value to our shareholders as well. In the quarter, the investments that we delivered on in labor were around increases in wages of about 3% year-over-year. Further expansion of our AGM role, the Assistant General Manager role that provides bench strength for future openings, but also provides the general managers in the restaurant, another leader in that 4 walls that can help them manage these significantly growing businesses that went from $2.4 million in AUVs a couple of years ago to over $3 million -- at $3.1 million today. And so we're seeing that, that investment in the AGM role is providing better strength and also helping to general manager turnover overall, which will have a long-term benefit.

In the third quarter as well, Brett referenced this on the call and I did see a little bit -- we added hours into our restaurants, particularly in our new restaurant openings to ensure they're post open success, and that is reflected in the labor results that we delivered in the quarter. We like what we're seeing there and expect to continue to make those investments as we finish the year and go into 2027. And as it relates to leverage and what we anticipate, we're -- like I said at the beginning, we want to make sure that we're doing the right things for the business to drive the momentum that we're seeing and continue that for the next 12 weeks, 12 years and beyond.

Operator

Your next question comes from the line of Margaret-May Binshtok with Wolfe Research.

Margaret-May Binshtok

I guess a little bit of a follow-up and a little bit of something new. I know you guys have talked about 2/3 of the restaurants with that top-notch guest experience. I mean, where -- what do you think those restaurants are doing differently? How are you scaling some of those practices across the system? And are there any kind of, I guess, low-hanging fruit levers that you guys can pull for the rest of the system?

Brett Schulman

Yes, Margaret, thanks for the question. Well, first, I'd point to 110 Academy general managers that run exceptional restaurants. Those certainly make up a portion of those 2/3. And I think the other thing we noted, the hospitality contest was a great way for us to gain the key behaviors and activities that are driving some of those exceptional hospitality results that we can scale across the system. And that's going to be a focus. As Tricia noted, some of the labor investments we've been making, the AGM position it's really kind of an all-of-the-above when you think about premarinated chicken, our new produce slicers. These are all different ways that free our team up, take complexity and physical tests off of their plate to free them up to deliver great hospitality and have those human interactions with our teams -- or sorry, with our guests.

So that's been a real focus that we believe we can deliver epic hospitality across every location, every shift. And so we've been very intentional about all these different activities coming at it, whether it's from an equipment standpoint, whether it's from a labor investment standpoint, or whether it's from a best practices standpoint to set our teams up for success to deliver epic hospitality.

Operator

Your next question comes from the line of Sara Senatonay (sic) [ Sara Senatore ] with Bank of America.

Aisling Grueninger

This is Aisling on for Sara. Just in the updated guidance, preopening moved roughly $7 million higher, but only 1 unit was added to the opening guide. And I know you touched on kind of what drove the higher expense in the 3Q time period. But is the heavier spend kind of the new run rate or are you getting a head start on the 2027 class? Just anything you can say on how that informs unit growth next year would be helpful.

Tricia Tolivar

Sure, happy to. So certainly, for preopening, we saw an opportunity to invest in the business. These robust openings that we've been delivering across the country wanted and needed the appropriate support to be able to deliver on that guest experience and continue that momentum as we move forward. So what we did, and we talked a little bit about on the call, is we're bringing in general managers earlier, team leads earlier traveling to other openings to experience a new restaurant opening ahead of what the restaurants that they're going to open themselves.

And so those investments that we were working with are about $50,000 to $60,000 per restaurant overall, and I would expect that to continue as we move forward from our historical run rate because we're seeing good returns out of those seeing unbelievably low GM turnover as a result and then also contributing to the success of the restaurant overall. So what we're seeing as you go forward, there are a couple of other things in the quarter itself that were driving preopening costs as well that I want to call out. And then I'll give a little more color related to your question on 2027.

In the quarter, we also embarked on some remodels. So there are preopening costs that are incurred in the quarter as well as expected in the fourth quarter as we're taking some of the or all of the elements for Projects Soul and doing some significant remodels to understand opportunity for additional updates as we move forward. And then there are some urban locations with some longer times of development as well as some higher costs that impacted the overall cost of remodel -- excuse me, of preopening this year, driving that range of $28.5 million to $29.5 million. So as we look into 2027, we will not be as high as we are now currently on a per restaurant basis. But we do anticipate there'll be about that $50,000 to $60,000 more per restaurant on top of the historical run rates that we've had as we move forward and deliver a great experience.

Operator

Your next question comes from the line of Gregory Francfort with Guggenheim.

Gregory Francfort

Maybe I just want to go back to the changes you're making on kind of the GM incentives. And I guess what is industry standard? And maybe how are you different when you go to these managers and pitch them on joining CAVA?

And then you also made a comment about in the future tying their incentive or their pay more directly to the benefits they drive. I guess I'm curious what you mean by that comment and what you're contemplating?

Brett Schulman

Yes, Greg, I can't speak to others' compensation models. But what I can speak to is that we have always set out for CAVA to be a place where our team members can grow into GMs and build careers for themselves or even come into support center and build a career for themselves. And so we've structured GM comp over the years to increasingly give them opportunities to earn greater compensation, whether that's the equity grants we rolled out this year, whether it is increased compensation for achieving that Academy certification which now 110 of our general managers are achieving or if there is development in creating future GMs that are promoted that these general managers have developed, they get bonuses for that, and really shifting toward an owner-operator mindset where they have skin in the game and participate in the upside that they're creating. So we've looked at different adjustments to our current short-term incentive and bonus model. And we'll have more to come on that in the coming quarters, as I mentioned earlier. But we are always reviewing. I mean we've done this over the course of our journey to continue to not have a kind of stated compensation number but to continue to raise the ceiling for their compensation opportunities every year.

Operator

Your next question comes from the line of Sharon Zackfia with William Blair.

Sharon Zackfia

I guess I'm curious, as you've made all of these investments both at the managerial and hourly labor level. Have you seen kind of -- or can you quantify what kind of impact you're seeing on turnover at both of those levels? I know you said it's improved, but it'd be great to get some numbers around that? And whether kind of where you are in that journey towards what you would target?

Brett Schulman

Yes, Sharon, we're growing -- we've been growing, what, 17% to 19% compound annual unit growth rate. We've committed to at least 16% next year. Growth is not easy in this business. And we want to make sure we are staying in front of the investments that are needed to drive sustainable, durable long-term growth, and that starts with our people. And so we have been very steadfast about this since we've been public that we are going to use opportunities to stay in front of this.

And then we need to show that those investments get a return on investments and that they pay off over time. So again, what we're seeing is, better guest satisfaction, reduced turnover, if you take our Academy GMs, for example, low to mid-single-digit turnover in our Academy GM population. So we want to develop more people to get into that population because we see the increased compensation, the increased ownership mentality, the opportunities for them to build a career reduces turnover and it creates lower turnover of team members. So we've continued to see steady reduction in turnovers in our GM population overall and in our team member population as we continue to make these investments.

And then for example, Tricia spoke to some of the preopening investments we've been making. So since we've been training GM's 3 months additional time with these investments versus what we were doing before, turnover has dropped to almost 0 of that population, low single digits of that population versus much higher turnover previously, where the intensity of these openings were challenging to folks and they weren't lasting either through training or we're burning out a few weeks after training. So again, we need to see a return on these investments. We've seen that in some of these targeted ones we've made or test pilots that we've done. So we are leaning in that because we are laser focused on creating long-term sustainable durable growth. And again, we're not going to do this for the next 12 weeks. We're doing this for the next 12 years and beyond. And if that is an investment of 20 basis points or 30 basis points of restaurant-level margin or some preopening costs in a given quarter or given year, we're going to do that because we believe it's going to create that long-term sustainable growth and restaurant level margin expansion.

Sharon Zackfia

And then I think you mentioned that you're rolling out a new Operator Portal that will give the GM different things, but also the ability to throttle delivery. Is that something that they have the capability to do now? Or will that be new? I mean how do you manage delivery at the unit level right now so that the units aren't overwhelmed?

Brett Schulman

Yes, great question. We have throttle set today, and we have the ability to out-of-stock ingredients. But previously, they had to submit a ticket to tech to be able to do that. Now they have an interface. This has rolled out in over 100 restaurants already and it will be rolled out across the fleet shortly, where they have an interface that they can manually control it now themselves, and they no longer have to submit a ticket. So you're getting it in real time.

Again, we want our GMs to be business leaders. They're running multimillion dollar businesses. We want them to own it the right way, and we want to give them the tools and capabilities to own it and not have to necessarily go to another person or go to another department to get things done for them that they can run their businesses the way they see fit and to create greater opportunities for them to create value for themselves and for our shareholders and for our guests.

Operator

Your next question comes from the line of Jacob Aiken-Phillips with Melius Research.

Jacob Aiken-Phillips

Last quarter, you called out some of your strongest comps in the lower income markets and with the choppiness around gas prices and improvement you're seeing heading in 4Q, how is the performance across income cohorts evolved?

Tricia Tolivar

Thanks, Jacob. We are continuing to see our restaurants in median household income markets that are lower, have the strongest and highest same-restaurant sales. So that trend has continued into third quarter. And still seeing great trends across all of our platforms and all of our environments.

Jacob Aiken-Phillips

And then you mentioned some remodels to test elements of Project Soul. What are you looking for to learn from those restaurants about the sales opportunity and investment required? And I guess as you think about a broader Sun-Kissed rollout, how much could fit within a normal refresh cycle? And what would justify an increase in spending across the fleet?

Brett Schulman

Yes, Jacob, thanks for the question. We see that our cross channel, our multichannel users have a 3.3x frequency. So we want to make sure that it's not an either/or it's an and that we have great digital and great physical experiences because when we present our guests with robust experience across all channels, we gain more occasions and more frequency from them. And when you think about how we're applying Project Soul to Project Sun-Kissed, one of the urban locations that Tricia mentioned as a test location, post-project Sun-Kissed remodel, we saw an 18% increase at the dinner day part as more guests came more frequently to eat in our physical space.

So again, I've been on record for years saying the demise of the dining room is greatly exaggerated. And when many industry participants have been shrinking their dining rooms or going to austere spaces, littered with kiosks, we've been going in the other direction and investing in warm inviting aesthetics that drive human connection that give our guests the opportunity and the optionality when they so choose to come and have that human connection and a physical experience complemented by when they want a quick, convenient experience where they can go and opt into 1 of our digital channels. So very pleased with the early returns we're seeing on the more inviting experiential aesthetic that Project Soul and now Project Sun-Kissed are delivering.

Operator

Your next question comes from the line of Brian Harbour with Morgan Stanley.

Brian Harbour

I have a question about new store productivity. And you mentioned that, Brett, as we can kind of measure it to me, it looked like it took a down shift from the first half into the third quarter. What I don't know is sort of -- is that just timing of units? Is it mix of markets that you opened more recently. I guess I'd be curious if some of the honeymoon effects have played into this. And I guess maybe the question would be you're sort of investing more resources in some of these new openings are you, in fact, kind of seeing the benefit of that in real time?

Tricia Tolivar

Yes. Thanks, Brian. The biggest factor in the new restaurant productivity, the way you're calculating is timing and understanding when those restaurants are opening. So if you had a better visibility into the timing of their openings in the quarter. I think you'd see an outcome that was right at 100% from a new restaurant productivity standpoint. I will say that one of the things we've done in addition to investing in more training, bringing team members on sooner to understand the CAVA way and prepare them for a successful opening is we've also made some adjustments in the restaurants to help them through that process, meaning turning off third-party delivery in those restaurants and catering restaurant, not having catering capabilities such that the team members can give exceptional epic hospitality experience for the guests as they're coming into the restaurant without being distracted by third-party delivery drivers, waving the phones in their faces, while there's a line out the door of guests and restaurants waiting to be served.

So that is something that we changed a few months ago and are finding that it's improving our guest experience scores. And so while it has a little bit of an impact on the overall sales results in the short-term, we do think it's the best thing for the long-term success of the brand and the operations in that restaurant.

Operator

Your next question comes from the line of J.P. Wollam with ROTH Capital Partners.

John-Paul Wollam

Just 2-part here on kind of some sales initiatives. First, just on the second catering market rollout, just can you share kind of what incremental knowledge you're hoping to gain?

And then just the second one, in terms of the loyalty program, could you just kind of tell us looking back over the last year and the rollout of status is, where are you seeing the greatest impact? Is it driving the additional visit from your already frequent guest or bringing kind of lapsed customers back? And where is the program still falling short as we think about next year?

Brett Schulman

Yes. So to your first question on catering, the goal of the second market test is to really codify our strategy moving forward on whether it would be a more broad-based chain-wide approach like we have in our current Houston market where every restaurant produces catering to a certain magnitude or in our second market test, which we just launched about a week or 2 ago, a more hub and satellite model where not every restaurant produces catering. And so that is designed to have a go-forward final strategy early next year for the larger rollout of catering in the future.

Regarding the loyalty question, we're very pleased with the evolution of the program. If you think about it, we launched the Reimagine program at the end of '24 Phase 1 with the Earn-and-Bank Points model. At the end of '25, we launched Phase 2, which was the tiered status level. And what we've seen is the opportunity to really influence behavior to encourage folks to trade up from the Sea status to the Sand status and then subsequently Sand to Sun to improve frequency.

And now with CAVA Core and CAVA Current, which is our customer data platform, on top of CAVA Core, that gives us the tools for Phase 3. And Phase 3 will kick off next year. We are shifting to a new loyalty platform next month which will unlock ability and give us the flexibility to enable the capabilities for us to roll out Phase 3 in the next 12 to 18 months that will allow for much greater personalization and be able to truly drive and influence deeper behavior to get people to move up in those tiered status levels, thereby driving greater frequency. So very happy with the evolution of loyalty and very excited at the promise for the next phase to come.

Operator

Your next question comes from the line of Jim Sanderson with Northcoast Research.

James Sanderson

I wanted to go back to a commentary on low and high income consumers. I'm wondering if you noticed any difference in the way each group manages the menu, meaning if their average check is different, how that comp performance is so much stronger. That's primarily transaction growth or a mix of both? Just any feedback on those differences.

Tricia Tolivar

It's certainly a transaction growth. And ironically, we're also seeing in the lower income cohorts of our restaurants that they're indexing higher on premium protein attachments, which is a little counterintuitive but we're seeing that, that is -- gives them opportunities, and that's really a function of that barbell menu option that we have. So our entry price point across many restaurants across the country is $10.65, which gives you chicken, falafel, or roasted vegetables, unlimited toppings, 3 dips and spreads and 2 dressings, and that's a great way to make our food accessible. But at the same time, if you want to experience more premium protein, there is the opportunity to do that as well on our menu, and we think that's an attractive choice for many across the country.

James Sanderson

All right. I had a quick question on catering as well. Are you expecting any increase in labor related to marketing, if you roll this out nationally? Is there a need at the store level to add labor to market the new product as you develop it?

Brett Schulman

No. We don't foresee any incremental catering to marketing in particular. And we already have and we have had -- even since our Zoes acquisition, we have an internal catering sales team that manages B2B sales. So that is a great marketing engine that's already built into our business.

Operator

Your next question comes from the line of Brian Vaccaro with Raymond.

Brian Vaccaro

My question is on digital sales. And the last several quarters, you saw some significant outsized growth in that channel. And it looks like it may have moderated a bit this quarter. Can you just elaborate on any trend changes you're seeing in third-party delivery or order ahead takeout within that digital sales mix?

Tricia Tolivar

So a portion of the digital sales shift is related to the new restaurant openings that I mentioned earlier, where we've turned off third-party digital -- excuse me, third-party ordering in those restaurants, and that's creating a bit of a mix shift overall in the entire portfolio. So as we continue to see how that performs over time, there really isn't anything about the consumer behavior or it's more of an intentional approach that we have. But I also believe that Project Soul has an impact because we're creating an environment for an in-restaurant occasion that allows us to serve those guests in a warm environment that gives them a great experience with our food and amazing hospitality.

Brian Vaccaro

All right. That's helpful color. And just 1 quick clarification, if I could, Tricia. On G&A, I think you said you expect 4Q to be slightly higher I just wanted to confirm that that's being compared to the third quarter G&A ex stock comp?

Tricia Tolivar

It is. So in terms of G&A spend in dollars, we expect fourth quarter to be slightly higher than third quarter. And one thing I'd like to add around G&A is certainly as we identified the opportunity to invest in preopening costs, we wanted to reallocate some of the spend that we had originally intended to incur related to G&A and bring it into preopen. So if you go back to the beginning of the year, we had suggested G&A as a percent of revenue would be flat to 2025. And as we finish out the year, we anticipate you will see some leverage in that G&A spend as a percent to revenue as we close out 2026.

Operator

Your next question comes from the line of Todd Brooks with StoneX.

Todd Brooks

I wanted to ask about the marinated chicken rollout, knowing that, that's not a labor saver but it allows you to reinvest labor dollars to more kind of front-of-house hospitality activities. Can you talk through how we should be thinking about food cost pressure from that? And then given the early reads on the initiative, as you're looking at other ingredients in the restaurant or high make items that tax your crews, are there opportunities to push more of kind of ingredient prep out to the vendor level and take it off the plates of your back house employee?

Tricia Tolivar

Yes. So as we look at COGS as a percent of revenue in the third quarter, we did experience some benefit as it relates to tariffs. And so during the quarter, we were successful in identifying opportunities to recover some of those tariffs and the third quarter reflects some of that benefit in the quarter itself. And so when you go from third quarter to fourth quarter, you will see an increase in COGS as a percent of revenue associated with the continued rollout of premarinated chicken, which does create incremental cost on the food beverage and packaging line while then giving us the opportunity to reinvest that labor on the labor line overall.

As it relates to overall what opportunities might we have to simplify the operations in the preparation, we're always looking for different opportunities to do that. As Brett mentioned, the cucumber slicers, there's been a number of different iterations and looking at, our falafel and having that made in advance, we make it all in-house today. And we'll continue to explore those and bring them to our restaurants if and only if they're able to deliver the quality that we do today or better.

Operator

We have reached the end of the Q&A session. I will now turn the call back to Brett Schulman, CEO, for closing remarks.

Brett Schulman

Thank you for joining us today. Before we close, I want to recognize the more than 15,000 team members across the U.S. who bring CAVA's mission to life every day. At our 500th restaurant opening in Minnesota, the pride of our teams and the warmth of our guests was a powerful reminder of what makes CAVA special as we continue to bring our Mediterranean way to more communities. This year has been one of continued progress focused on expanding our footprint, strengthening our restaurants and investing in the people, tools and capabilities that support great hospitality every day. As we look ahead, we remain focused on earning lasting guest loyalty and building CAVA for the long-term. Thank you for your time and support, and we look forward to speaking with you again in the new year.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.