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Investing.com - Cava Group Inc (NYSE:CAVA) reported second-quarter results that exceeded revenue expectations, driving shares up 10% in premarket U.S. trading Wednesday.
The Mediterranean fast-casual chain demonstrated continued momentum in same-restaurant sales and traffic growth. Adjusted earnings per share came in at $0.19, matching analyst estimates, while revenue touched $365.4 million, surpassing the consensus estimate of $360.1 million.
Revenue grew 31.3% from $278.2 million in the prior year quarter.
Same-restaurant sales increased 9.0%, driven by guest traffic growth of 5.3% and menu price and product mix contributing 3.7%. The company opened 17 net new restaurants during the quarter, bringing its total restaurant count to 476, a 19.6% increase YoY.
"Our second quarter results underscore the continued strength of our category-defining brand and the resonance of our value proposition with today’s consumer," said Brett Schulman, Co-Founder and CEO. "This strength, combined with the power of our unit economic model, gives us confidence not only in our momentum today, but in the long runway that lies ahead."
Restaurant-level profit margin came in at 25.7%, down 60 basis points from 26.3% in the prior year quarter. The decrease was driven by input costs associated with the launch of Pomegranate Glazed Salmon on April 20, 2026, a higher mix of third-party delivery, and incremental wage investments, partially offset by leverage from higher sales.
Net income reached $23.0 million, up 25.3% from $18.4 million in the second quarter of fiscal 2025. Adjusted EBITDA grew 30.0% to $54.7 million, representing 14.9% of revenue.
CAVA reaffirmed its fiscal full-year 2026 guidance, projecting 75 to 77 net new restaurant openings, same-restaurant sales growth of 4.5% to 6.5%, and adjusted EBITDA of $181.0 million to $191.0 million. The midpoint of the adjusted EBITDA guidance of $186.0 million aligns with the company’s continued expansion trajectory.
"[T]his isn’t a bad report, but the (slight) margin softness, coupled with the fact that guidance was only reiterated, might be underwhelming in the near-term," analysts at Vital Knowledge said in a note.
(Scott Kanowsky contributed reporting)
