Cava Group stock jumped more than 10% in Tuesday's after hours trading after the restaurant chain delivered stronger-than-expected second quarter results as customer foot traffic continued to rise.

For the quarter ended July 12, Cava's restaurant revenue increased 31.3% to $365.4 million, leaving total company revenue at $368.4 million. Wall Street analysts polled by FactSet had expected roughly $360 million in revenue.

Cava opened 17 net new restaurants during the quarter, bringing its presence to 476 locations.

Same-restaurant sales increased 9% from a year ago, including a 5.3% increase in guest traffic and a 3.7% contribution from higher prices and customers buying more expensive items.

Earnings of 19 cents a share were slightly ahead of the 18 cents analysts expected. But the restaurant-level profit margin slipped a bit from a year earlier. The company said its new salmon menu, launched in April, has diluted the margin. A higher share of delivery orders and wage investments have also dented margins, the company said.

Cava said in June it plans to hire more than 2,500 workers this year as it accelerates restaurant expansion. Still, management left its 2026 outlook unchanged.

The restaurant industry is facing a new round of food-safety scares that threaten to weaken sales. To be sure, Cava itself hasn't been linked to the recent food-safety outbreaks. Still, its sales could be affected by consumers' broader concern about leafy greens and produce.

For the full year of 2026, the company expects same-restaurant sales growth of 4.5% to 6.5% and adjusted earnings before interest, taxes, depreciation, and amortization of $181 million to $191 million.

Despite the company's solid growth, the stock has fallen 37% from its recent peak in April as of Tuesday's close, reflecting a reset in investor expectations. The stock had traded at an exceptionally high valuation, pricing in sustained traffic growth, margin expansion, and near-flawless execution.

As same-store sales growth began to moderate and restaurant-level margins faced pressure from wages and food costs, investors are now less willing to pay a much lower multiple for that growth. The broader weakness and food-safety concerns in the restaurant industry have also added uncertainty.