TD Cowen has named CAVA Group Inc. a top pick, maintaining confidence in the Mediterranean restaurant chain despite recent sales headwinds caused by industry‑wide Cyclospora publicity that temporarily dampened consumer sentiment. The brokerage kept its FY2026 same‑store sales forecast at 7%, citing the company’s strong second‑quarter performance and week‑over‑week improvements as evidence that sales momentum will resume.
CAVA reported second‑quarter same‑store sales growth of 9.0%, driven by 5.3% traffic growth, 1.4% price increases and a 2.3% favorable mix. This result beat TD Cowen’s estimate of 7.5% and represented the best restaurant same‑store sales performance during the June‑quarter earnings season. Adjusted EBITDA for the quarter reached $54.7 million, surpassing the firm’s estimate of $52.4 million.
Management reiterated FY2026 guidance, projecting the opening of 75‑77 net new restaurants, same‑restaurant sales growth of 4.5% to 6.5%, and adjusted EBITDA in the range of $181 million to $191 million. Restaurant‑level margins in the second quarter were 25.7%, falling within analyst expectations.
The company highlighted operational improvements under new Chief Operating Officer Doug Thompson. Recent initiatives include an April salmon launch that met expectations, shrimp testing in select markets, and a braised‑beef offering in Philadelphia with a $3.70 upcharge. CAVA also plans a second market test of its catering service in the fall.
TD Cowen noted that CAVA retains low marketing spend, roughly 1% of sales, and has additional levers available should sales rebound stall. Following the earnings release, analyst price targets were adjusted: RBC Capital raised its target, while KeyBanc, Guggenheim, DA Davidson and Mizuho lowered theirs, resulting in ratings ranging from Outperform to Neutral.
Overall, the recommendation reflects TD Cowen’s belief that CAVA’s operational fundamentals and growth initiatives will enable it to overcome the temporary sales disruption and deliver on its FY2026 outlook.