Key Highlights

  • Same restaurant sales rose 3.1% in the quarter ended October 4, 2026, and management said Cyclospora and fresh-produce concerns removed about 150 basis points from that growth.
  • Total Revenue reached USD 356.4 million against USD 292.2 million a year earlier, while Diluted Earnings per Share edged down to USD 0.11 from USD 0.12.
  • Restaurant-level profit Margin fell 120 basis points to 23.4%, and adjusted EBITDA was USD 42.3 million, up 5.7% from the prior-year quarter.
  • Cava ended the period with 500 restaurants after 24 net openings, holding USD 297.9 million of cash and USD 130.0 million of investments.

Food-Safety Scare Trims Same Restaurant Sales

Cava (NYSE:CAVA) reported third-quarter results on November 4, 2026, and shares were reported about 8% lower in regular trading on November 5, according to market wraps. The exact close was not confirmed. Same restaurant sales growth of 3.1% compared with a market estimate of 3.3%, and traffic was roughly flat. Management attributed about 150 basis points of drag to a Cyclospora outbreak linked to produce and wider concern over fresh ingredients, and market commentary also pointed to higher gas prices. Menu price and product mix contributed about 3.0 points, so the growth came almost entirely from price rather than additional visits. Year-to-date free Cash Flow was USD 37.1 million, far below Operating Cash Flow of USD 181.6 million, which reflects heavy spending on new restaurants.

Margin Slips Even as Revenue Grows 22%

The Mediterranean fast-casual chain grew Cava-branded revenue 22.1% to USD 353.7 million, helped by new units and a higher average unit Volume of USD 3.1 million versus USD 2.9 million. Profitability moved the other way. Restaurant-level profit rose 16.2% to USD 82.7 million, yet margin narrowed from 24.6% to 23.4%. Net Income was USD 13.2 million, down from USD 14.7 million. Adjusted EBITDA of USD 42.3 million was below a market estimate of about USD 44 million. Because a restaurant pays for food and labor before sales recover, a traffic dip hits margin faster than it hits revenue.

Narrower Margin Outlook and Higher Opening Costs

The company updated its 2026 outlook on November 4. It now expects a restaurant-level margin of 23.7% to 24.0%, down from a prior ceiling of 24.3%, and adjusted EBITDA of USD 184 million to USD 189 million versus USD 181 million to USD 191 million before. Pre-opening costs were lifted to USD 28.5 million to USD 29.5 million from USD 22.0 million to USD 22.5 million, and net new openings are targeted at 76 to 78. The revised same restaurant sales outlook could not be confirmed here, so it is left out. Risks include further produce-safety headlines, consumer sensitivity to prices and the cost of fast expansion. Net openings of 24 in the quarter lifted the total to 500, up 20.5% from a year earlier, so unit growth remains the main driver of the story.

Where Things Stand

Cava (NYSE:CAVA) fell about 8% because the quarter showed a food-safety dent to sales, a thinner restaurant margin and a slight miss against estimates, even though revenue grew 22%. The lost 150 basis points are a one-off in management's telling, but the narrower margin and EBITDA ranges and higher opening costs leave less room for error. Next markers are whether traffic recovers as the outbreak fades, how the fourth quarter margin lands against the 23.7% to 24.0% full-year range, and the pace of new openings.