CAVA : Quarterly Report for Quarter Ending October 5, 2025 (Form 10-Q)

About this update from Cava Group, Inc.

Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim condensed consolidated financial statements and the related notes included elsewhere in this Form 10-Q and our Annual Report on Form 10-K for the year ended December 29, 2024 (our "2024 Annual Report"). In addition to historical information, this discussion and analysis contains forward-looking statements based on current expectations that involve risks, uncertainties, and other factors outside the Company's control, as well as assumptions, such as our plans, objectives, expectations, and intentions. Our actual results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors, including those described under the sections entitled "Cautionary Statement Concerning Forward-Looking Statements" above and "Risk Factors" in our 2024 Annual Report. Overview CAVA Group, Inc. (together with its wholly owned subsidiaries, referred to as the "Company," "CAVA," "we," "us," and "our" unless specified otherwise) was formed as a Delaware corporation in 2015, and prior to that, the first CAVA restaurant opened in 2011 in Bethesda, Maryland. The Company is headquartered in Washington, D.C. and, as of October 5, 2025, the Company operated 415 fast-casual CAVA Restaurants in 28 states and Washington, D.C. The Company's authentic Mediterranean cuisine unites taste and health, with a menu that features chef-curated and customizable bowls and pitas. The Company centrally produces dips, spreads, and certain dressing bases for use in its restaurants while also selling its dips, spreads, and prepared dressings in grocery stores. Segments The Company's operations are conducted as two segments: CAVA and CAVA Foods. CAVA includes the operations of all company-owned CAVA restaurants. CAVA Foods includes the production of dips, spreads, and certain dressing bases used in CAVA restaurants as well as sales from our consumer-packaged goods ("CPG") business. CAVA is the Company's only reportable segment as CAVA Foods is below the quantitative thresholds for segment reporting purposes. See Item 1. "Financial Statements," Note 12 (Segment Reporting) for more information. Key Performance Measures In assessing the performance of our business, in addition to considering a variety of measures in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), our management team also considers a variety of other key performance measures, including non-GAAP measures. The key performance measures used by our management for determining how our business is performing are detailed in the table below. We believe that these key financial measures provide useful information to users of our financial statements in understanding and evaluating our results of operations in the same manner as our management team. The presentation of these key performance measures, including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income margin, which are non-GAAP financial measures, is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. See "Non-GAAP Financial Measures" below. The following table sets forth our key performance measures: Twelve Weeks Ended Forty Weeks Ended ($ in thousands) October 5, 2025 October 6, 2024 Change October 5, 2025 October 6, 2024 Change CAVA Revenue $ 289,787 $ 241,499 $ 48,288 $ 896,518 $ 729,173 $ 167,345 CAVA Same Restaurant Sales Growth 1 1.9 % 18.1 % (16.2) % 5.1 % 11.1 % (6.0) % CAVA AUV 2 $ 2,935 $ 2,784 $ 151 N/A N/A N/A CAVA Restaurant-Level Profit $ 71,165 $ 61,819 $ 9,346 $ 226,732 $ 187,700 $ 39,032 CAVA Restaurant-Level Profit Margin 24.6 % 25.6 % (1.0) % 25.3 % 25.7 % (0.4) % Net New CAVA Restaurant Openings 17 11 6 48 43 5 CAVA Digital Revenue Mix 37.6 % 35.8 % 1.8 % 37.6 % 36.2 % 1.4 % Net income $ 14,747 $ 17,966 $ (3,219) $ 58,822 $ 51,700 $ 7,122 Adjusted EBITDA 3 $ 40,042 $ 33,479 $ 6,563 $ 126,996 $ 101,144 $ 25,852 Adjusted Net Income 3 $ 14,747 $ 15,012 $ (265) $ 58,822 $ 43,741 $ 15,081 Net income margin 5.0 % 7.4 % (2.4) % 6.5 % 7.0 % (0.5) % Adjusted EBITDA margin 3 13.7 % 13.7 % - % 14.0 % 13.7 % 0.3 % Adjusted Net Income margin 3 5.0 % 6.2 % (1.2) % 6.5 % 5.9 % 0.6 % __________________ 1 To achieve an optimal comparison of fiscal weeks in the CAVA Same Restaurant Sales Growth calculation in fiscal 2024, giving consideration to holiday periods, each week of fiscal 2023 was shifted by one week. As a result of this shift, approximately $2.3 million of revenue is not included in CAVA Same Restaurant Sales Growth for the forty weeks ended October 6, 2024. Had this shift not been made, CAVA Same Restaurant Sales Growth would have been 11.6% in the forty weeks ended October 6, 2024 and immaterially impacted in the twelve weeks ended October 6, 2024. 2 Presented on a trailing thirteen period basis. For purposes of calculating CAVA AUV for the reporting period ended October 5, 2025, the applicable measurement period is the trailing thirteen periods ended October 5, 2025. For the reporting period ended October 6, 2024, the applicable measurement period is the trailing thirteen periods ended October 6, 2024, excluding the 53rd week of fiscal 2023. 3 See "Non-GAAP Financial Measures" below for a discussion of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income margin and reconciliations of Adjusted EBITDA and Adjusted Net Income to net income, the most directly comparable GAAP measure. Adjusted EBITDA margin is Adjusted EBITDA as a percentage of revenue. Adjusted Net Income margin is Adjusted Net Income as a percentage of revenue. CAVA Restaurants and Net New CAVA Restaurant Openings The following table details CAVA Restaurant unit data: Twelve Weeks Ended Forty Weeks Ended October 5, 2025 October 6, 2024 October 5, 2025 October 6, 2024 CAVA Restaurants Beginning of period 398 341 367 309 New CAVA Restaurant openings 17 11 48 44 Permanent closure - - - (1) End of period 415 352 415 352 Results of Operations Our results of operations, on a consolidated basis and by segment, for the twelve and forty weeks ended October 5, 2025 and October 6, 2024, are set forth below. We present our segment results before our consolidated results as we believe that our CAVA segment is more useful and meaningful in assessing the performance of our business, which is mainly driven by our CAVA segment. Comparison of the twelve weeks ended October 5, 2025 and October 6, 2024 CAVA Segment Results The following table summarizes the results of the CAVA segment: Twelve Weeks Ended October 5, 2025 October 6, 2024 Change (in thousands) $ % of Revenue $ % of Revenue $ % Revenue $ 289,787 100.0 % $ 241,499 100.0 % $ 48,288 20.0 % Restaurant operating expenses (excluding depreciation and amortization) Food, beverage, and packaging 87,245 30.1 72,230 29.9 15,015 20.8 Labor 73,849 25.5 61,233 25.4 12,616 20.6 Occupancy 19,523 6.7 16,412 6.8 3,111 19.0 Other operating expenses 38,005 13.1 29,805 12.3 8,200 27.5 Total restaurant operating expenses 218,622 75.4 179,680 74.4 38,942 21.7 Restaurant-level profit $ 71,165 24.6 % $ 61,819 25.6 % $ 9,346 15.1 % CAVA Revenue: The increase in CAVA Revenue was primarily due to a $43.0 million increase from the 74 Net New CAVA Restaurant Openings during or subsequent to the twelve weeks ended October 6, 2024. In addition, the increase in CAVA Revenue was driven by CAVA Same Restaurant Sales Growth of 1.9%, primarily from menu price and product mix with guest traffic being approximately flat. CAVA food, beverage, and packaging: The increase in CAVA food, beverage, and packaging was primarily due to a $13.2 million increase from the 74 Net New CAVA Restaurant Openings during or subsequent to the twelve weeks ended October 6, 2024. The remainder of the increase was primarily due to CAVA Same Restaurant Sales Growth of 1.9%. As a percentage of CAVA Revenue, CAVA food, beverage, and packaging increased primarily due to the impact of tariffs and our chicken shawarma offering. CAVA labor: The increase in CAVA labor was primarily due to the 74 Net New CAVA Restaurant Openings during or subsequent to the twelve weeks ended October 6, 2024. The remainder of the increase was primarily due to the impact of higher average hourly wages of approximately 2%. As a percentage of CAVA Revenue, CAVA labor increased due to the aforementioned incremental wage investments, partially offset by the impact of higher sales. CAVA occupancy: The increase in CAVA occupancy was primarily due to the 74 Net New CAVA Restaurant Openings during or subsequent to the twelve weeks ended October 6, 2024. As a percentage of CAVA Revenue, CAVA occupancy decreased primarily due to operating leverage associated with higher sales. CAVA other operating expenses: The increase in CAVA other operating expenses was primarily due to the 74 Net New CAVA Restaurant Openings during or subsequent to the twelve weeks ended October 6, 2024 and CAVA Same Restaurant Sales Growth of 1.9%. As a percentage of CAVA Revenue, CAVA other operating expenses increased due to a higher mix of third-party delivery, insurance costs, and other individually insignificant items, partially offset by operating leverage associated with higher sales. Other Results The following table summarizes remaining activity related to our CPG operations and the production of dips, spreads, and certain dressing bases used in CAVA restaurants: Twelve Weeks Ended October 5, 2025 October 6, 2024 Change (in thousands) $ % of Revenue $ % of Revenue $ % Revenue $ 2,451 100.0 % $ 2,318 100.0 % $ 133 5.7 % Food, beverage, and packaging 1,044 42.6 1,310 56.5 (266) (20.3) Other operating expenses 206 8.4 180 7.8 26 14.4 The increase in revenue noted above was primarily due to higher CPG sales. As a percentage of revenue, food, beverage, and packaging decreased due to operational efficiencies realized since the commencement of operations at our facility in Verona, VA in the first quarter of fiscal 2024. Consolidated Results The following table summarizes our consolidated results of operations: Twelve Weeks Ended (in thousands) October 5, 2025 October 6, 2024 Change $ % of Revenue $ % of Revenue $ % Revenue $ 292,238 100.0 % $ 243,817 100.0 % $ 48,421 19.9 % Operating expenses: Restaurant operating costs (excluding depreciation and amortization) Food, beverage, and packaging 88,289 30.2 73,540 30.2 14,749 20.1 Labor 73,849 25.3 61,233 25.1 12,616 20.6 Occupancy 19,523 6.7 16,412 6.7 3,111 19.0 Other operating expenses 38,211 13.1 29,985 12.3 8,226 27.4 Total restaurant operating expenses 219,872 75.2 181,170 74.3 38,702 21.4 General and administrative expenses 31,499 10.8 29,830 12.2 1,669 5.6 Depreciation and amortization 17,628 6.0 14,325 5.9 3,303 23.1 Restructuring and other costs - - 230 0.1 (230) (100.0) Pre-opening costs 4,942 1.7 2,819 1.2 2,123 75.3 Impairment and asset disposal costs 1,176 0.4 1,675 0.7 (499) (29.8) Total operating expenses 275,117 94.1 230,049 94.4 45,068 19.6 Income from operations 17,121 5.9 13,768 5.6 3,353 24.4 Interest income, net (3,575) (1.2) (4,091) (1.7) 516 (12.6) Other expense (income), net 30 - (50) - 80 (160.0) Income before taxes 20,666 7.1 17,909 7.3 2,757 15.4 Provision for (benefit from) income taxes 5,919 2.0 (57) - 5,976 N/M Net income $ 14,747 5.0 % $ 17,966 7.4 % $ (3,219) (17.9) % __________________ N/M data not meaningful Revenue, Food, beverage, and packaging, Labor, Occupancy, and Other operating expenses: The increases in Revenue, Food, beverage, and packaging, Labor, Occupancy, and Other operating expenses are primarily driven by the growth of our CAVA Segment. Refer to "CAVA Segment Results" above for more information. General and administrative expenses: The increase in general and administrative expenses was primarily due to investments to support future growth and executive transition costs, partially offset by lower performance-based incentive compensation and legal costs. Depreciation and amortization: The increase in depreciation and amortization was primarily driven by the addition of assets from the 74 Net New CAVA Restaurant Openings during or subsequent to the twelve weeks ended October 6, 2024 and technology improvements. Pre-opening costs: The increase in pre-opening costs was due to the volume of new CAVA restaurants under construction and higher costs on a per unit basis. Interest income, net: The decrease in interest income, net, was due to lower interest rates on short term investments in the current quarter. Provision for (benefit from) income taxes: The effective tax rate for the twelve weeks ended October 5, 2025 was 28.6%. The effective tax rate for the twelve weeks ended October 6, 2024 was (0.3)% as the amount of income tax expense was immaterial prior to the Company's release of its valuation allowance against deferred tax assets in the fourth quarter of fiscal 2024. Comparison of the forty weeks ended October 5, 2025 and October 6, 2024 CAVA Segment Results The following table summarizes the results of the CAVA segment: Forty Weeks Ended October 5, 2025 October 6, 2024 Change (in thousands) $ % of Revenue $ % of Revenue $ % Revenue $ 896,518 100.0 % $ 729,173 100.0 % $ 167,345 22.9 % Restaurant operating expenses (excluding depreciation and amortization) Food, beverage, and packaging 265,679 29.6 212,414 29.1 53,265 25.1 Labor 227,907 25.4 186,134 25.5 41,773 22.4 Occupancy 62,722 7.0 52,751 7.2 9,971 18.9 Other operating expenses 113,478 12.7 90,174 12.4 23,304 25.8 Total restaurant operating expenses 669,786 74.7 541,473 74.3 128,313 23.7 Restaurant-level profit $ 226,732 25.3 % $ 187,700 25.7 % $ 39,032 20.8 % CAVA Revenue: The increase in CAVA Revenue was primarily due to a $131.1 million increase from the 106 Net New CAVA Restaurant Openings during or subsequent to the forty weeks ended October 6, 2024. In addition, the increase in CAVA Revenue was driven by CAVA Same Restaurant Sales Growth of 5.1%, which consisted of a 2.6% increase from guest traffic and a 2.5% increase from menu price and product mix. CAVA food, beverage, and packaging: The increase in CAVA food, beverage, and packaging was primarily due to a $39.8 million increase from the 106 Net New CAVA Restaurant Openings during or subsequent to the forty weeks ended October 6, 2024. The remainder of the increase was primarily due to CAVA Same Restaurant Sales Growth of 5.1%. As a percentage of CAVA Revenue, CAVA food, beverage, and packaging increased primarily due to input costs associated with the launch of grilled steak in the second quarter of fiscal 2024, the impact of tariffs, and our chicken shawarma offering in the current quarter. CAVA labor: The increase in CAVA labor was primarily due to the 106 Net New CAVA Restaurant Openings during or subsequent to the forty weeks ended October 6, 2024 and higher average hourly wages of approximately 2%. As a percentage of CAVA Revenue, CAVA labor decreased due to the impact of higher sales, partially offset by the aforementioned incremental wage investments. CAVA occupancy: The increase in CAVA occupancy was primarily due to the 106 Net New CAVA Restaurant Openings during or subsequent to the forty weeks ended October 6, 2024. As a percentage of CAVA Revenue, CAVA occupancy decreased primarily due to operating leverage associated with higher sales. CAVA other operating expenses: The increase in CAVA other operating expenses was primarily due to the 106 Net New CAVA Restaurant Openings during or subsequent to the forty weeks ended October 6, 2024 and CAVA Same Restaurant Sales Growth of 5.1%. As a percentage of CAVA Revenue, CAVA other operating expenses increased due to a higher mix of third-party delivery, insurance costs, and other individually insignificant items, partially offset by operating leverage associated with higher sales. Other Results The following table summarizes remaining activity related to CPG operations and the production of dips, spreads, and certain dressing bases used in CAVA restaurants: Forty Weeks Ended October 5, 2025 October 6, 2024 Change (in thousands) $ % of Revenue $ % of Revenue $ % Revenue $ 8,161 100.0 % $ 7,145 100.0 % $ 1,016 14.2 % Food, beverage, and packaging 3,119 38.2 3,912 54.8 (793) (20.3) Other operating expenses 664 8.1 560 7.8 104 18.6 The increase in revenue noted above was primarily due to higher CPG sales. As a percentage of revenue, food, beverage, and packaging decreased due to operational efficiencies realized since the commencement of operations at our facility in Verona, VA in the first quarter of fiscal 2024. Consolidated Results The following table summarizes our consolidated results of operations: Forty Weeks Ended (in thousands) October 5, 2025 October 6, 2024 Change $ % of Revenue $ % of Revenue $ % Revenue $ 904,679 100.0 % $ 736,318 100.0 % $ 168,361 22.9 % Operating expenses: Restaurant operating costs (excluding depreciation and amortization) Food, beverage, and packaging 268,798 29.7 216,326 29.4 52,472 24.3 Labor 227,907 25.2 186,134 25.3 41,773 22.4 Occupancy 62,722 6.9 52,751 7.2 9,971 18.9 Other operating expenses 114,142 12.6 90,734 12.3 23,408 25.8 Total restaurant operating expenses 673,569 74.5 545,945 74.1 127,624 23.4 General and administrative expenses 104,944 11.6 91,951 12.5 12,993 14.1 Depreciation and amortization 55,254 6.1 45,380 6.2 9,874 21.8 Restructuring and other costs - - 582 0.1 (582) (100.0) Pre-opening costs 14,519 1.6 9,500 1.3 5,019 52.8 Impairment and asset disposal costs 3,917 0.4 3,795 0.5 122 3.2 Total operating expenses 852,203 94.2 697,153 94.7 155,050 22.2 Income from operations 52,476 5.8 39,165 5.3 13,311 34.0 Interest income, net (11,773) (1.3) (12,829) (1.7) 1,056 (8.2) Other income, net (471) (0.1) (188) - (283) 150.5 Income before taxes 64,720 7.2 52,182 7.1 12,538 24.0 Provision for income taxes 5,898 0.7 482 0.1 5,416 N/M Net income $ 58,822 6.5 % $ 51,700 7.0 % $ 7,122 13.8 % __________________ N/M data not meaningful Revenue, Food, beverage, and packaging, Labor, Occupancy, and Other operating expenses: The increases in Revenue, Food, beverage, and packaging, Labor, Occupancy, and Other operating expenses are primarily driven by the growth of our CAVA Segment. Refer to "CAVA Segment Results" above for more information. General and administrative expenses: The increase in general and administrative expenses was primarily due to investments to support future growth, including our CAVA Connect conference, higher equity-based compensation, including payroll taxes arising from the vesting of RSUs, and executive transition costs, partially offset by lower performance-based incentive compensation and legal costs. Depreciation and amortization: The increase in depreciation and amortization was primarily driven by the addition of assets from the 106 Net New CAVA Restaurant Openings during or subsequent to the forty weeks ended October 6, 2024 and technology improvements. Pre-opening costs: The increase in pre-opening costs was due to the volume of new CAVA restaurants under construction and higher costs on a per unit basis. Interest income, net: The decrease in interest income, net, was due to lower interest rates on short term investments in the current year period. Other income, net: The increase in other income, net, was due to the fair value change recognized on a convertible promissory note described in Item 1, Financial Statements, Note 3 (Investments). Provision for income taxes: The effective income tax rate for the forty weeks ended October 5, 2025 was 9.1%, which includes the impact of a $12.6 million reduction to income tax expense associated with equity-based compensation. The effective tax rate for the forty weeks ended October 6, 2024 was 0.9% as the amount of income tax expense was immaterial prior to the Company's release of its valuation allowance against deferred tax assets in the fourth quarter of fiscal 2024. Non-GAAP Financial Measures In addition to our consolidated financial statements, which are prepared in accordance with GAAP, we present Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income margin as supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP. We believe these non-GAAP financial measures assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our operating performance. Management believes Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income margin are useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate, and capital investments. Management uses Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income margin to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other peer companies using similar measures. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone provide. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income margin are not recognized terms under GAAP and should not be considered as alternatives to net income or net income margin as measures of financial performance, or cash provided by operating activities as measures of liquidity, or any other performance measure derived in accordance with GAAP. Additionally, these measures are not intended to be measures of free cash flow available for management's discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments, and debt service requirements. Because not all companies use identical calculations, the presentation of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income margin measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Some of these limitations are: • Adjusted EBITDA and Adjusted Net Income do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; • Adjusted EBITDA and Adjusted Net Income do not reflect changes in, or cash requirements for, our working capital needs; • Adjusted EBITDA and Adjusted Net Income do not reflect financing activities of our business; • Adjusted EBITDA does not reflect period to period changes in taxes, income tax expense or the cash necessary to pay income taxes; • Adjusted EBITDA does not reflect the impact of earnings or cash charges resulting from matters we consider not to be indicative of our ongoing operations; • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; and • other companies in our industry may calculate Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income margin differently than we do, limiting their usefulness as comparative measures. Because of these limitations, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income margin should not be considered as measures of discretionary cash available to invest in business growth or to reduce any applicable indebtedness. The following table provides a reconciliation of net income to Adjusted EBITDA and net income margin to Adjusted EBITDA margin: Twelve Weeks Ended Forty Weeks Ended (in thousands) October 5, 2025 October 6, 2024 October 5, 2025 October 6, 2024 Net income $ 14,747 $ 17,966 $ 58,822 $ 51,700 Non-GAAP Adjustments Interest income, net (3,575) (4,091) (11,773) (12,829) Provision for (benefit from) income taxes 5,919 (57) 5,898 482 Depreciation and amortization 17,628 14,325 55,254 45,380 Equity-based compensation 3,285 3,481 14,517 12,222 Other expense (income), net 30 (50) (471) (188) Impairment and asset disposal costs 1,176 1,675 3,917 3,795 Restructuring and other costs - 230 - 582 Executive transition costs 1 832 - 832 - Adjusted EBITDA $ 40,042 $ 33,479 $ 126,996 $ 101,144 Revenue $ 292,238 $ 243,817 $ 904,679 $ 736,318 Net income margin 5.0 % 7.4 % 6.5 % 7.0 % Adjusted EBITDA margin 13.7 % 13.7 % 14.0 % 13.7 % __________________ 1 Includes costs associated with the separation of the Company's Chief Operations Officer. The following table provides a reconciliation of net income to Adjusted Net Income and net income margin to Adjusted Net Income margin: Twelve Weeks Ended Forty Weeks Ended (in thousands) October 5, 2025 October 6, 2024 October 5, 2025 October 6, 2024 Net income $ 14,747 $ 17,966 $ 58,822 $ 51,700 Quarterly allocation of income tax expense, excluding VA Release 1 - (2,954) - (7,959) Adjusted Net Income $ 14,747 $ 15,012 $ 58,822 $ 43,741 Revenue $ 292,238 $ 243,817 $ 904,679 $ 736,318 Net income margin 5.0 % 7.4 % 6.5 % 7.0 % Adjusted Net Income margin 5.0 % 6.2 % 6.5 % 5.9 % __________________ 1 Reflects an allocation of income tax expense excluding the net benefit from the release of the valuation allowance previously recorded against our deferred tax assets, or the VA Release, recorded in Q4 2024 assuming a consistent effective tax rate. Liquidity and Capital Resources We assess our liquidity in terms of our ability to generate adequate amounts of cash to meet our current and expected future operating needs. Our expected primary uses of cash on a short- and long-term basis are for the expansion of our restaurant base, working capital, and other capital expenditures. We believe that cash provided by operating activities and existing cash on hand, together with amounts available under our 2022 Credit Facility, will be sufficient to satisfy our anticipated cash requirements for the next twelve months and foreseeable future, including our expected capital expenditures for expansion of our CAVA restaurant base, operating lease obligations, and working capital requirements. Our sources of liquidity could be affected by general macroeconomic conditions, as well as tariff policy and geopolitical tensions between the United States and foreign countries, as well as the factors described under the section entitled "Risk Factors" in our 2024 Annual Report. Depending on the severity and direct impact of these factors on us, we may not be able to secure additional financing on acceptable terms, or at all. Cash Overview We had cash and cash equivalents of $284.6 million and $366.1 million as of October 5, 2025 and December 29, 2024, respectively. In addition, we had investments in fixed income debt securities of $103.1 million as of October 5, 2025. For the forty weeks ended October 5, 2025, our operations were funded from cash flows from operations. Cash Flows The following table summarizes our cash flows: Forty Weeks Ended Change (in thousands) October 5, 2025 October 6, 2024 $ % Net cash provided by operating activities $ 144,537 $ 131,174 $ 13,363 10.2 % Net cash used in investing activities (228,808) (80,389) (148,419) 184.6 Net cash provided by (used in) financing activities 2,721 (16,053) 18,774 (117.0) Net change in cash and cash equivalents $ (81,550) $ 34,732 $ (116,282) (334.8) % Operating Activities: The increase in net cash provided by operating activities was primarily due to improved operating performance, partially offset by working capital changes. Investing Activities: The increase in net cash used in investing activities was primarily due to launching an investment portfolio of fixed income debt securities to optimize returns on our cash balance, higher capital expenditures related to future new CAVA restaurant openings, and an investment in a convertible promissory note described in Item 1, Financial Statements, Note 3 (Investments). Financing Activities: The change in net cash provided by (used in) financing activities was primarily due to decreased tax withholding obligations arising from the vesting of RSUs and an increase in proceeds from shares acquired under equity plans in the forty weeks ended October 5, 2025 compared with the prior year period. Material Cash Commitments There have been no significant changes to the material cash commitments as disclosed in our 2024 Annual Report, other than those payments made in the ordinary course of business. Credit Facility Refer to Item 1, Financial Statements, Note 6 (Debt), for a description of our 2022 Credit Facility. Critical Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information available as of the date of the consolidated financial statements; therefore, actual results could differ from those estimates. We had no significant changes to our critical accounting estimates as described in our 2024 Annual Report. Recent Accounting Pronouncements Refer to Item 1, Financial Statements, Note 1 (Nature of Operations and Basis of Presentation).

View stock analysis, news, and events for Cava Group, Inc.