CAVA Group, Inc. 10-Q Summary: Fiscal Q2 2026
Business Context and Reporting Period
This Quarterly Report on Form 10-Q covers the twelve-week period ended July 12, 2026, and the twenty-eight-week period ended the same date. CAVA Group, Inc. operates a fast-casual restaurant chain serving Mediterranean cuisine. As of the period end, the company operated 476 CAVA Restaurants across 29 states and Washington, D.C. The company operates on a 52-week fiscal year ending on the last Sunday of the calendar year.
Key Financial Metrics
| Metric | 12 Weeks Ended July 12, 2026 | 28 Weeks Ended July 12, 2026 |
|---|---|---|
| Revenue | $368.4 million | $806.7 million |
| Net Income | $23.0 million | $46.6 million |
| Diluted EPS | $0.19 | $0.39 |
| Adjusted EBITDA | $54.7 million | $116.5 million |
| Adjusted EBITDA Margin | 14.9% | 14.4% |
| Restaurant-Level Profit Margin | 25.7% | 25.3% |
| Cash and Cash Equivalents | $322.8 million | $322.8 million (Balance Sheet) |
| Operating Cash Flow (28 weeks) | N/A | $134.5 million |
| Debt | $0 borrowings | $0 borrowings |
| Available Credit Facility | $149.1 million | $149.1 million |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 31.3% year-over-year (YoY) for the quarter and 31.7% for the year-to-date (YTD). Growth was driven by 94 net new restaurant openings since the prior year quarter and a 9.0% increase in Same Restaurant Sales (driven by 5.3% guest traffic growth and 3.7% price/mix).
- Profitability: Net income rose 25.3% YoY for the quarter. Restaurant-level profit increased 28.1% to $93.8 million. However, the Restaurant-Level Profit Margin compressed slightly to 25.7% from 26.3% due to input costs (specifically the launch of Pomegranate Glazed Salmon) and higher average hourly wages (~3% increase).
- Cost Structure: Food, beverage, and packaging costs rose to 30.0% of revenue (from 29.6%). Labor costs increased to 25.1% of revenue (from 24.8%). General and administrative expenses decreased as a percentage of revenue (10.8% vs 11.4%) due to sales leverage.
- Digital Mix: Digital Revenue Mix increased to 39.0% from 37.3% YoY.
Outlook, Risks, and Unusual Items
- Food Safety Impact: In July 2026, a multistate cyclosporiasis outbreak associated with iceberg lettuce adversely impacted revenue in the third quarter. While no CAVA ingredients were implicated, broader consumer concerns affected sales. Management notes the impact appears to be moderating but remains uncertain.
- Capital Expenditures: The company invested heavily in expansion, with $89.7 million in purchases of property and equipment for the 28-week period. Pre-opening costs increased 32.3% YoY due to the volume of new restaurants under construction.
- Debt Facility: In March 2026, the company amended its Credit Facility, extending the maturity to March 2031 and increasing capacity to $150.0 million. There are currently no borrowings outstanding.
- Legal Proceedings: A derivative action was filed on July 22, 2026, by the Cleveland Bakers and Teamsters Pension Fund against certain officers and directors alleging breaches of fiduciary duty. The complaint does not seek damages from the Company.
Investor Verification Checklist
- Food Safety Recovery: Verify the duration and financial impact of the iceberg lettuce outbreak on Q3 and Q4 sales trends.
- Margin Sustainability: Assess whether the 25.7% restaurant-level profit margin can be maintained given rising labor costs and new menu item input costs.
- Unit Economics: Confirm the profitability timeline for the 94 net new openings added since the prior year quarter.
- Legal Exposure: Monitor the status of the derivative lawsuit filed in July 2026 to ensure no material financial liability emerges.
- Capital Allocation: Review the balance between aggressive expansion (CapEx) and maintaining liquidity, noting the $149.1 million available credit line.