CAVA's Restaurant Empire Keeps Growing — Las Vegas and Bay Area Are Next

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CAVA Group, Inc. (NYSE: CAVA) shares were up 11.33% at $67.70 during premarket trading on Wednesday after the company reported better-than-expected second-quarter results and maintained its 2026 outlook. The Mediterranean fast-casual chain is on a roll, and it's not just about the numbers—though the numbers are pretty good.

Earnings Snapshot

CAVA reported second-quarter revenue of $368.44 million. CAVA Revenue, which excludes revenue from licensed restaurants, rose 31.3% year over year to $365.43 million, topping the $360.53 million analyst estimate. Diluted EPS came in at 19 cents, ahead of the 18-cent analyst estimate.

Revenue growth was driven by restaurant expansion and a 9% increase in same-restaurant sales, including 5.3% traffic growth. The company opened 17 net new restaurants, ending the quarter with 476 locations across 29 states and Washington, D.C., up 19.6% year over year.

Restaurant-level profit increased 28.1% year over year to $93.8 million, while the margin declined to 25.7% from 26.3% in the year-ago quarter. Adjusted EBITDA grew 30% year over year to $54.7 million in the quarter.

Year-to-date operating cash flow stood at $134.5 million and free cash flow reached $44.8 million, marking the 10th consecutive quarter of positive cash flow. CAVA ended the second quarter debt-free with $435.6 million in cash and investments.

Segment Performance And Key Updates

Food, beverage and packaging costs increased to 30% of revenue from 29.5%, mainly due to input costs associated with the salmon launch, partly offset by a favorable product mix. Labor and related expenses rose to 25.3% from 25%, reflecting a 3% wage investment, while occupancy costs improved to 6.3% from 6.8% and G&A expenses, excluding equity compensation, fell to 9.3% from 9.8%.

CAVA launched its first nationwide seafood item, Pomegranate Glazed Salmon, during Q2, with customer response meeting expectations. It also tested Roasted Garlic Shrimp and is evaluating the product's next steps. The company launched its Mediterranean Summer campaign, featuring Harissa Barbecue Pita Chips, Strawberry Ginger drinks and a digital-exclusive salmon bowl, while expanding its loyalty program through the new Flavor Passport app experience.

CAVA also launched its Flavor Your Future team-member development program, with plans to hire more than 2,500 employees to strengthen its leadership pipeline. The company is rolling out pre-marinated chicken through 2026 and 2027 to simplify operations, improve consistency and reduce back-of-house work.

On the expansion front, CAVA plans to enter Las Vegas in the second half of 2026 and the San Francisco Bay Area in 2027. That's a big deal for a brand that's still relatively young in the public markets.

But it hasn't all been smooth sailing. Cyclospora-related food-safety concerns temporarily weighed on sales late in the second quarter, but same-restaurant sales have since recovered to the mid-single-digit range. Management said it has not seen an immediate impact from the recent Salmonella outbreak and does not source from the farms involved.

CAVA Outlook

CAVA maintained its 2026 outlook for 75-77 net new restaurants, same-restaurant sales growth of 4.5%-6.5%, restaurant-level profit margin of 23.7%-24.3%, pre-opening costs of $22 million-$22.5 million and adjusted EBITDA of $181 million-$191 million.

The outlook factors in the Cyclospora disruption, ongoing macroeconomic and geopolitical uncertainty, as well as second-half margin pressure from fuel surcharges, the pre-marinated chicken rollout and wage investments. Despite these near-term headwinds, management remains confident in CAVA's long-term growth, supported by strong sales, attractive unit economics, new-store productivity and demand for fresh, flavorful, protein-rich Mediterranean food.

So, what's the takeaway? CAVA is growing fast, but it's also investing heavily in its people, its menu, and its future. The stock's pop on Wednesday suggests investors like what they see. And with Las Vegas and the Bay Area on the horizon, there's plenty of room to run.