CAVA Group, Inc. 2026 Q2 Earnings Call

Matt, please go ahead. Good afternoon and welcome to CAVA's second 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.

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

Thanks, Matt, and welcome to the call, everyone. Our second quarter results underscore the continued strength of our category-defining brand and the resonance of our value proposition with today's consumer. From Mishawaka, Indiana, to Downingtown, Pennsylvania, our newest restaurants continue to outperform our expectations, reinforcing the proven portability of our concept and the growing demand for our differentiated Mediterranean cuisine and welcoming hospitality. 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. Our second quarter financial highlights include a 31.3% increase in CAVA revenue, same-restaurant sales of 9% driven by 5.3% traffic, 17 net new restaurants, ending the quarter with 476 restaurants, a 19.6% increase year-over-year, adjusted EBITDA of $54.7 million, a 30% increase over the second quarter of 2025.

Net income of $23 million and $44.8 million in year-to-date free cash flow. While near-term macroeconomic conditions continue to evolve, our focus remains firmly on building for the long term. We're seeing durable shifts in how consumers choose to eat, with growing demand for bold, flavorful food, fresh ingredients, and protein-rich meals that don't require compromising on health. Our Mediterranean cuisine sits at the intersection of these trends, making it increasingly relevant in today's environment and further reinforcing our confidence in the category we are pioneering. As the clear scale leader in Mediterranean, we believe CAVA is uniquely positioned to capture the significant opportunity ahead with the strength and durability of our model, providing us with the flexibility to continue to invest with intention in our team members, our operations, the quality of our food, and the everyday value we deliver to our guests.

Whether it's strengthening our leadership pipeline through our Flavor Your Future team member development platform, or building more consistent operational foundations through initiatives like CAVA Core and CAVA Current, we're making choices today that we believe will strengthen the business for years to come. You can see that long-term oriented approach come to life across our strategic pillars, beginning with our first, expand our Mediterranean way in communities across the country. During the second quarter, we opened 17 net new restaurants, ending the quarter with 476 locations across 29 states and the District of Columbia. Our momentum from the first quarter continued into the second, with restaurant expansion in both new and existing markets, including our recent entries into Indiana and Ohio.

As we look ahead into the second half of the year, I'm excited to share that we'll be making our entry into Las Vegas, Nevada, and in 2027, our highly anticipated expansion to the Bay Area. Each new market continues to strengthen our confidence in the long-term opportunity ahead with second quarter new restaurant productivity once again above 100%, further demonstrating the broad appeal of our brand. As we continue to expand our Mediterranean way across the country, culinary innovation remains at the heart of our journey. Seafood is a staple of the Mediterranean diet, and the second quarter marked an exciting milestone for us with the nationwide launch of our first ever seafood offering, Pomegranate Glazed Salmon.

As a natural complement to the way our guests are increasingly choosing to eat, salmon expands the variety of choices available while staying true to the bold flavors and ingredient quality that define our brand. Guest reception has been strong and overall performance has been in line with our expectations. While we are encouraged by salmon's early performance, it represents just the beginning of a broader opportunity within seafood. I am pleased to share that we have recently concluded the market test of our Roasted Garlic Shrimp, another protein that aligns naturally with our menu. As with all of our culinary innovation, we will continue moving through our disciplined testing process before determining the appropriate path forward, and we look forward to sharing more in the coming quarters.

While our larger culinary launches continue to broaden our menu appeal, we believe smaller seasonal moments are just as important, giving guests new reasons to come back to CAVA more frequently. Recently, our Mediterranean summer campaign introduced a collection of limited time offerings, including our Harissa BBQ Pita Chips, which bring together smoky, spicy, and subtly sweet flavors in a new take on one of our guest favorites and has quickly become one of my favorite additions to the menu. The campaign also includes our seasonal house-made Strawberry Ginger drink and our digital exclusive Pomegranate Glazed Salmon Bowl, extending the flavors of summer across even more guest occasions. These seasonal moments continue to reinforce the relevance of our brand while staying true to our concept essence. Shifting to our second strategic pillar, deepen personal relationships with guests, even as we scale.

We are encouraged by the continued growth of our loyalty platform and the new opportunities it creates. As our first-party audience grows, we are expanding what loyalty means at CAVA, creating experiences rooted in discovery, generosity, and meaningful connection. Building on the interactive digital experiences we introduced earlier this year, this past quarter, we launched Flavor Passport, an in-app experience that encourages guests to explore more of our menu while discovering new flavors and earning rewards along the way. It is another example of how we are continuing to evolve our loyalty platform while creating deeper, more meaningful connections with our guests. Just as importantly, we want every guest to feel welcomed and included, whether they are visiting CAVA for the first time or have been with us for years.

To kick off the summer, we celebrated the summer solstice by surprising our rewards members with complimentary pita chips, another expression of our spirit of generosity. We brought that same spirit to life in our communities through our Mediterranean Summer Supper Series in partnership with Airbnb Experiences, where guests gathered around a shared table to experience the warmth, connection, and hospitality at the heart of CAVA. As part of the series, Oasis members received exclusive invitations, creating another meaningful way to deepen our relationships with our most engaged guests. These gatherings reflected something that has always been at the heart of CAVA, bringing people together through meaningful moments, genuine hospitality, and experiences that leave people feeling good about themselves. Ultimately, creating these moments for our guests starts with the people who show up every day to bring our Mediterranean hospitality to life, reflected in our third strategic pillar.

Run great restaurants, every location, every shift. Great restaurants are built by great leaders, and we are committed to making CAVA the best general manager opportunity in the industry. That commitment comes to life through our Flavor Your Future initiative, our holistic team member development platform designed to attract, develop, and retain the next generation of leaders who will grow with us. Officially launched this past quarter, the program is committed to hiring more than 2,500 new team members, reinforcing our belief that the best guest experiences begin by investing in our people. One of the things I am most proud of is seeing our leaders continue to grow long after they become general managers. Earlier this summer, we welcomed more than 100 of our top-performing general managers to our annual Academy GM Summit, where we celebrated excellence, shared best practices, and strengthened the leadership culture that drives CAVA forward.