Mediterranean fast-casual chain CAVA Group, Inc. (CAVA) is having a moment. Shares jumped 7.49% in premarket trading Wednesday after the company reported first-quarter results that blew past Wall Street expectations and raised its full-year outlook. Not bad for a restaurant chain that refuses to play the discount game.
Here's the headline: Q1 revenue hit $438.27 million, well above the $411.25 million analysts were looking for. Adjusted earnings came in at 20 cents per share, beating the 17-cent consensus. Adjusted EBITDA jumped 37.6% year over year to $61.7 million, fueled by strong comparable sales and new restaurant openings. And the company ended the quarter with zero debt and $403 million in cash and investments. That's a balance sheet that would make most CFOs weep with joy.
How did CAVA pull this off while some competitors are slashing prices to lure in cautious consumers? Management says it's all about the "structural strength" of the business and its leadership in the Mediterranean category — a space CAVA helped create and continues to define. While others lean on promotions, CAVA has stayed focused on its long-term strategy, offering customers flexibility across everyday and premium menu options while expanding access to Mediterranean cuisine nationwide.
Same-restaurant sales rose 9.7% year over year, with traffic up 6.8%. That's real growth, not just price hikes. CAVA did implement a 1.4% menu price increase in January 2026, but kept prices unchanged on core items like bowls and pitas to maintain its value positioning. The strategy seems to be working: system-wide average unit volumes hit about $3 million, and new restaurant productivity exceeded 100%.
CAVA opened 20 net new restaurants during the quarter, bringing the total to 459 locations across 29 states and Washington, D.C. — a 20.2% increase from a year ago. The company plans to open 75 to 77 new restaurants this year.
One notable move: CAVA launched its first seafood offering, Pomegranate Glazed Salmon, nationwide during the quarter. Early customer response has been positive, and management expects the launch to support menu diversification and customer engagement. However, the nationwide rollout of salmon is expected to pressure margins by about 100 basis points through the rest of fiscal 2026. Food, beverage and packaging costs improved 20 basis points year over year to 29.1% of revenue, helped by a favorable menu mix, but salmon will be a headwind.
On the technology front, CAVA is investing in two internally developed platforms: CAVA Core, a companywide data platform, and CAVA Current, a real-time operations and commerce system aimed at improving execution, personalization, labor management and AI-driven decision-making. Management says these platforms are intended to create a real-time, AI-enabled operating system for the business over the next decade.
CEO Brett Schulman noted that restaurant performance remains strong across all income-based market cohorts, with locations in lower-income areas continuing to outperform despite the broader "K-shaped" economy, where consumer spending trends remain uneven across income groups. In other words, CAVA's appeal isn't limited to the affluent.
Looking ahead, CAVA raised its full-year 2026 same-restaurant sales growth guidance to 4.5% to 6.5%, up from the prior range of 3% to 5%. Adjusted EBITDA is now expected to be between $181 million and $191 million, up from $176 million to $184 million. The company also reiterated its plan to open 75 to 77 new restaurants this year.
CAVA shares were trading at $83.97 in premarket action Wednesday. The stock has been on a tear, and with results like these, it's easy to see why. No discounts needed.
