CAVA Group, Inc. 10-Q Summary: Fiscal Q1 2026
Business Context and Reporting Period
This report covers the sixteen-week period ended April 19, 2026 (Fiscal Q1 2026). CAVA Group, Inc. operates 459 fast-casual Mediterranean restaurants across 29 states and Washington, D.C., alongside a consumer packaged goods (CPG) segment. The company operates on a 52-week fiscal year ending on the last Sunday of the calendar year.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $438.3 million | $331.8 million |
| Net Income | $23.6 million | $25.7 million |
| Net Income Margin | 5.4% | 7.7% |
| Adjusted EBITDA | $61.7 million | $44.9 million |
| Adjusted EBITDA Margin | 14.1% | 13.5% |
| Restaurant-Level Profit | $108.9 million | $82.3 million |
| Restaurant-Level Profit Margin | 25.1% | 25.1% |
| Cash & Equivalents | $295.8 million | $282.9 million (prior year-end) |
| Operating Cash Flow | $64.1 million | $38.6 million |
| Debt | $0 (No borrowings) | $0 |
| Available Credit | $149.1 million | N/A |
Material Changes vs. Prior Period
- Revenue Growth: Consolidated revenue increased 32.1% year-over-year, driven by 92 net new restaurant openings since the prior year period and a 9.7% increase in Same Restaurant Sales (comprising 6.8% guest traffic growth and 2.9% price/mix).
- Profitability: While Net Income decreased 8.3% due to a higher effective tax rate (21.5% vs. a 26.3% benefit in the prior year) and increased operating expenses, Adjusted EBITDA grew 37.6% to $61.7 million.
- Cost Structure: Restaurant operating expenses remained flat at 74.9% of revenue. General and administrative expenses increased 24.6% due to growth investments and higher equity-based compensation, though they decreased as a percentage of revenue (11.8% vs. 12.5%).
- Expansion: The company opened 21 new restaurants and closed 1 permanently during the quarter, resulting in 20 net new openings.
Guidance, Outlook, and Risks
Management Commentary: Management highlighted strong execution in unit growth and digital channels, with Digital Revenue Mix increasing to 39.9%. The company successfully refinanced its credit facility in March 2026, extending the maturity to 2031 and doubling capacity to $150 million.
Risks and Contingencies:
- Market Risks: Exposure to commodity price fluctuations, labor cost increases, and inflation.
- Operational Risks: Challenges in maintaining brand perception, food safety, and scaling IT systems.
- Legal: Ongoing routine litigation regarding employment matters; no material impact expected.
- Forward-Looking Statements: Future growth depends on successful new market entry and maintaining culture during rapid expansion.
Unusual Items: The company recorded $2.7 million in impairment and asset disposal costs, primarily related to operating lease assets and property/equipment. Additionally, $5.0 million was invested in a convertible promissory note for Hyphen Technologies, Inc.
Investor Verification Checklist
- Same Store Sales Sustainability: Verify if the 9.7% same-restaurant sales growth is driven by traffic or price increases, and assess sustainability in a competitive market.
- Capital Expenditures: Review the $48.6 million in CapEx for the quarter against the pipeline of new openings to ensure cash flow adequacy.
- Debt Covenant Compliance: Confirm continued compliance with the Total Rent Adjusted Net Leverage Ratio under the new $150 million credit facility.
- Equity Compensation Impact: Monitor the trajectory of equity-based compensation ($7.7 million in Q1) and its effect on future GAAP net income.
- Digital Mix: Assess the profitability of the 39.9% digital revenue mix given third-party delivery fees included in "Other operating expenses."