Mediterranean fast-casual restaurant chain CAVA (NYSE:CAVA) fell short of the market’s revenue expectations in Q3 2026, but revenue rose 22% year on year to $356.4 million. Its GAAP profit of $0.11 per share was in line with analysts’ consensus estimates.
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CAVA (CAVA) Q3 2026 highlights:
- Revenue $356.4 million vs S&P analysts’ consensus estimates of $359 million (22% year-on-year growth, 0.7% miss)
- EPS (GAAP) $0.11 vs analysts’ consensus estimates of $0.12 (in line)
- Adjusted EBITDA $42.33 million vs analysts’ consensus estimates of $44.11 million (11.9% margin, 4% miss)
- EBITDA guidance $186.5 million at the midpoint for the full year, below analysts’ consensus estimates of $190.3 million
- Operating margin 4.2%, down from 5.9% in the same quarter last year
- Locations 500 at quarter end, up from 426 in the same quarter last year
- Same-store sales rose 3.1% year on year (1.9% in the same quarter last year)
- Market capitalization $7.04 billion
“In the third quarter, despite broader industry pressures, we continued to gain market share, expand our footprint, and see strong performance from our new restaurants,” said Brett Schulman, co-founder and CEO. “Same Restaurant Sales grew 3.1%, CAVA Revenue increased 22.1%, and we opened our 500th restaurant ahead of schedule. As we look ahead, we will continue investing in our teams and our guests, strengthening the lasting relationships that support durable growth.”
Revenue growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
With $1.44 billion in revenue over the past 12 months, CAVA is a mid-sized restaurant chain, which sometimes brings disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale. On the positive side, it can still grow rapidly because it’s working from a smaller revenue base.
As shown below, CAVA’s revenue grew at a strong 24.9% annualized rate over the last five years as it opened new restaurants and increased revenue at existing, established dining locations.
This quarter, CAVA generated an impressive 22% year-on-year revenue growth rate, but its $356.4 million of revenue fell short of Wall Street’s high expectations.
Looking ahead, sell-side analysts expect revenue to grow 21.3% over the next 12 months, according to S&P, a deceleration versus the last five years. Despite the slowdown, this projection remains strong and indicates the market is forecasting success for its menu offerings.
Restaurant performance
Number of restaurants
A restaurant chain’s total number of dining locations influences how much it can sell and how quickly revenue can grow.
CAVA operated 500 locations in the latest quarter. Over the last two years, it has opened new restaurants at a rapid pace, averaging 18% annual growth, among the fastest in the restaurant sector. This gives it a chance to become a large, scaled business over time.
When a chain opens new restaurants, it usually means it’s investing for growth because there’s healthy demand for its meals and there are markets where its concepts have few or no locations.
Same-store sales
A company’s restaurant base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales provide a deeper understanding of this issue because they measure organic growth at restaurants open for at least a year.
CAVA has been one of the most successful restaurant chains over the last two years thanks to rapidly growing demand at its existing dining locations. On average, the company has posted strong year-on-year same-store sales growth of 7.3%. This performance along with its substantial expansion of new restaurants suggests it’s pursuing an aggressive growth strategy.
In the latest quarter, CAVA’s same-store sales rose 3.1% year on year. This was a meaningful deceleration from its historical levels. Whether CAVA can reaccelerate growth bears watching.
Key takeaways from CAVA’s Q3 results
CAVA delivered a weaker quarter with few positives: EBITDA missed expectations and full-year EBITDA guidance fell short of Wall Street’s consensus estimates. Shares plunged 11.2% to $54.68 immediately after the report.
CAVA’s results could have been better this quarter. When deciding whether to buy the stock, it’s important to consider its valuation, business quality and latest quarterly results. Read our full research report here (it’s free).