$CAVA · CAVA GROUP, INC.
CAVA Group filed its Q3 FY2026 10-Q for the twelve weeks ended October 4, 2026. Revenue grew 22.0% YoY to $356.4M, but net income declined 10.5% to $13.2M ($0.11 diluted EPS vs $0.12 a year ago). Operating margin compressed to 4.2% from 5.9%, driven by a 70.5% jump in pre-opening costs to $8.4M and higher labor and other operating expenses. The company ended the quarter with 500 CAVA restaurants, up from 415 a year earlier.
- Revenue rose 22.0% YoY to $356.4M in Q3 FY2026.
- Net income fell 10.5% to $13.2M; diluted EPS dropped to $0.11 from $0.12.
- Pre-opening costs surged 70.5% to $8.4M on 24 new restaurant openings.
- Operating margin compressed to 4.2% from 5.9% a year ago.
- CAVA restaurant count reached 500, up from 415 a year earlier.
Extended-hours trading shows CAVA down 11.39% to $54.59 versus the $61.61 regular close, signaling investors are selling the margin compression and earnings decline despite strong top-line growth.
CAVA's growth is no longer translating to profit growth, with margin compression and surging pre-opening costs driving an 11% after-hours selloff.
Fast-casual peers face similar margin pressure from aggressive unit growth and rising labor costs, with CAVA's 22% revenue growth offset by declining profitability.
Rising pre-opening costs (up 70.5%) and labor expenses are compressing margins even as revenue scales. New restaurant openings may not be profitable and could cannibalize existing locations.