By Evie Liu

Mediterranean fast-casual chain Cava Group posted another strong quarter, sending the stock higher in after-hours trading on Tuesday.

First-quarter revenue rose 32.2% year over year to $434.4 million, beating Wall Street expectations of $418.5 million. The growth was partially driven by 92 new restaurant openings over the past year, with recent new market entries across many Midwest states.

Same-restaurant sales increased 9.7%, mostly thanks to improving guest traffic -- a sign the company is still attracting customers even as much of the restaurant industry struggles with weaker demand.

Adjusted earnings came at 20 cents a share, down from 22 cents a year ago but topping Wall Street expectations of 17 cents. The decrease was due to lower tax benefits associated with equity-based compensation as well as higher depreciation and amortization, the company said.

"Amid today's broader macroeconomic environment and geopolitical uncertainty, our first quarter results reflect our position as a clear industry leader and our ability to meet the moment for the modern consumer," said CEO Brett Schulman in a statement.

The company has raised its guidance for fiscal 2026 given the momentum in the first quarter. Management now expects to open 75 to 77 net new restaurants during 2026 and anticipates same-restaurant sales to grow 4.5% to 6.5%, up from the previous estimates of 3% to 5% growth.

While pre-opening costs are expected to be higher than previously expected, adjusted earnings before interest, taxes, depreciation and amortization are now expected to come in between $181 and $191 million, up from the previous guidance of $176 million to $184 million.

Following the earnings report, the stock jumped nearly 8% on Tuesday in after-hours trading. Shares have gained 29% year to date, reversing the downtrend in 2025 when investors were concerned that the chain's rapid growth might come to a plateau.

Investors will remain focused on whether Cava can sustain its growth as the chain expands deeper into new markets.

Write to Evie Liu at evie.liu@barrons.com

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May 19, 2026 17:22 ET (21:22 GMT)

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