Cava Growth Cools From Torrid Pace as Guidance Holds Steady
Cava Group posted 9.0% same-restaurant sales growth in the second quarter, decelerating from 9.7% but still running well above the top of its full-year guidance range.
Cava Group (CAVA) reported same restaurant sales growth of 9.0% in the second quarter of fiscal 2026, decelerating from 9.7% in the first quarter. The Mediterranean fast-casual chain's growth rate remains far above the 0.5% to 2.1% range it posted across the third and fourth quarters of fiscal 2025 and the second quarter a year ago, underscoring that the deceleration is a moderation from an unusually strong run rather than a reversal.
Guest traffic told a similar story, rising 5.3% in the quarter, down from 6.8% in the first quarter but still well ahead of the roughly flat-to-negative traffic the company reported in the fourth quarter of fiscal 2025, when traffic fell 1.4%. Revenue growth decelerated for a second straight quarter, up 31.3% year over year versus 32.2% in the first quarter and 21.2% in the fourth quarter of fiscal 2025.
Restaurant-level profit margin compressed 60 basis points year over year to 25.7%, down from 26.3% in the second quarter of fiscal 2025, reversing the flat year-over-year margin the company had reported in the first quarter. The compression was due to input costs tied to its Pomegranate Glazed Salmon launch on April 20, 2026, along with a higher mix of third-party delivery orders and continued wage investments — a different cost driver than the tariffs and chicken shawarma limited-time offer cited in prior quarters. The margin remains part of a broader recovery arc, having troughed at 21.4% in the fourth quarter of fiscal 2025 before climbing to 25.1% in the first quarter and 25.7% in the second.
Average unit volumes continued their steady climb, reaching $3.088 million in the quarter, up from $3.027 million in the first quarter and $2.939 million a year earlier, extending a sequential rise from the $2.9 million to $2.94 million range held throughout fiscal 2025. Net new restaurant openings fell to 17 in the quarter from 20 in the first quarter, a pace roughly in line with the 17 openings in the third quarter of fiscal 2025.
General and administrative expenses, excluding equity compensation and executive transition costs, fell to 9.3% of revenue from 9.8% a year earlier, continuing a leverage trend that has held despite a sequential uptick to 9.9% in the first quarter. Adjusted EBITDA rose 30.0% to $54.7 million, though the adjusted EBITDA margin slipped to 14.9% from 15.0%, and dollar growth trailed the first quarter's 37.6% increase to $61.7 million. Net income rose 25.3% to $23.0 million, reaccelerating after first-quarter net income of $23.6 million had declined year over year from $25.7 million; both periods saw a higher effective tax rate tied to lower equity-compensation tax benefits and increased depreciation and amortization.
Digital revenue mix slipped to 39.0% of sales from 39.9% in the first quarter, though it remained above the 37% to 39% range Cava posted across fiscal 2025. Free cash flow more than doubled to $44.8 million year-to-date through the second quarter, from $21.9 million a year earlier, as operating cash flow rose to $134.5 million from $98.9 million despite capital expenditures increasing to $89.7 million from $77.0 million.
Cava reaffirmed its full-year 2026 guidance without changes, calling for 75 to 77 net new openings, same restaurant sales growth of 4.5% to 6.5%, restaurant-level profit margin of 23.7% to 24.3%, and adjusted EBITDA of $181.0 million to $191.0 million. The decision to hold the range steady, rather than raise it, stood out against a second-quarter same restaurant sales figure that already ran well above the top of the guided band, leaving the company's outlook conservative relative to its most recent quarterly result.