10q10k10q10k.net

What changed in CAVA GROUP, INC.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of CAVA GROUP, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+279 added−304 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-26)

Top changes in CAVA GROUP, INC.'s 2025 10-K

279 paragraphs added · 304 removed · 229 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

35 edited+9 added−7 removed39 unchanged
Biggest changeOur Community Days help us share our Mediterranean Way with new and existing guests and authentically engage with the communities we serve by partnering with and showcasing local organizations and charities. This work reinforces our mission and drives interest and excitement for our brand, which in turn helps to attract guests and support the strong performance of our restaurants.
Biggest changeRestaurant Marketing In our restaurants, we aim to create a warm, welcoming experience inspired by the Mediterranean with every visit. Our Community Days allow us to authentically engage with new and existing guests by partnering with local organizations and charities, reinforcing our mission while strengthening community ties.
We have designed our menu to offer vibrant flavors using fresh, high-quality ingredients inspired by our Mediterranean roots. Our guests can choose a chef-curated meal or a build-your-own-bowl or 7 Table of Contents pita using our 38 ingredients with over 17.4 billion combinations. We make it deliciously simple to eat well and feel good every day.
We have designed our menu to offer vibrant flavors using many fresh, high- 7 Table of Contents quality ingredients inspired by our Mediterranean roots. Our guests can choose a chef-curated meal or a build-your-own-bowl or pita using our 38 ingredients with over 17.4 billion combinations. We make it deliciously simple to eat well and feel good every day.
We believe we are well positioned to benefit from the following strong and emerging trends: • Evolving consumer preferences for authentic and ethnic cuisine • Increased focus on health and wellness • Emphasis on combined quality and convenience We aim to create an industry-leading, category defining brand rooted in the following strategic pillars: Expand our Mediterranean Way in Communities Across the Country • Grow our footprint and expand multi-channel access • Fuel our culinary innovation and communication engine to drive traffic, mix, and check • Express the essence of our category-defining concept consistently across brand properties Develop Personal Relationships with Guests, Even as We Scale • Leverage our digital ecosystem to enable more personalized communication with guests • Deepen our connections with guests and drive increased frequency with our reimagined loyalty offering • Create a cohesive physical and digital journey Run Great Restaurants, Every Location, Every Shift • Streamline and automate preparation to make our restaurants easier to run • Enhance our training and standards to consistently deliver our Mediterranean hospitality • Leverage technologies to increase automation and improve restaurant operations Operate As a High-Performing Team • Create a culture of growth and accountability • Use best-in-class data capabilities to unlock powerful, actionable insights • Implement programs and tools that engage, retain, and connect the organization Our Food - Where Taste and Health Unite Our menu fulfills a broad range of dietary preferences, from hearty and indulgent to vegan, vegetarian, gluten-free, dairy-free, paleo, keto, and nut-free diets.
We believe we are well positioned to benefit from the following strong and emerging trends: • Evolving consumer preferences for authentic and ethnic cuisine • Increased focus on health and wellness • Emphasis on combined quality and convenience We aim to create an industry-leading, category defining brand rooted in the following strategic pillars: Expand our Mediterranean Way in Communities Across the Country • Grow our footprint and expand multi-channel access • Fuel our culinary innovation and communication engine to drive traffic, mix, and check • Express the essence of our category-defining concept consistently across brand properties Develop Personal Relationships with Guests, Even as We Scale • Leverage our digital ecosystem to enable more personalized communication with guests • Deepen our connections with guests and drive increased frequency with our enhanced loyalty offerings • Create a cohesive physical and digital journey Run Great Restaurants, Every Location, Every Shift • Streamline and automate preparation to make our restaurants easier to run • Enhance our training and standards to consistently deliver our Mediterranean hospitality • Leverage technologies to increase automation and improve restaurant operations Operate As a High-Performing Team • Create a culture of growth and accountability • Use best-in-class data capabilities to unlock powerful, actionable insights • Implement programs and tools that engage, retain, and connect the organization Our Food - Where Taste and Health Unite Our menu fulfills a broad range of dietary preferences, from hearty and indulgent to vegan, vegetarian, gluten-free, dairy-free, paleo, keto, and nut-free diets.
We completed our initial public offering (“IPO”) in June 2023 and our common stock is listed on the New York Stock Exchange under the symbol “CAVA.” CAVA’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act, as amended (the “Exchange Act”), are publicly available free of charge on the Investor Relations section of our website at investor.cava.com or at www.sec.gov as soon as reasonably practicable after these materials are filed with or furnished to the SEC.
We completed our initial public offering (“IPO”) in June 2023 and our common stock is listed on the New York Stock Exchange under the symbol “CAVA.” CAVA’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports filed with or furnished to the Securities and Exchange Commission (“SEC”) pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are publicly available free of charge on the Investor Relations section of our website at investor.cava.com or at www.sec.gov as soon as reasonably practicable after these materials are filed with or furnished to the SEC.
Additionally, our recently opened production facility in Virginia will be evaluated under the same third-party standards. Competition The restaurant industry is highly competitive with respect to, among other things, food quality and presentation, taste preferences, price, brand reputation, digital engagement, service, value, and location.
Additionally, our production facility in Virginia will be evaluated under the same third-party standards. Competition The restaurant industry is highly competitive with respect to, among other things, food quality and presentation, taste preferences, price, brand reputation, digital engagement, service, value, and location.
Our Employee Net Promoter Score indicates we have a highly engaged team according to Denison Consulting, which conducted our 2024 Team Member engagement survey. Our Values We maintain a core set of values that guide the organization and our culture. They are: • Generosity First, Always - We lead with kindness.
Our Employee Net Promoter Score indicates we have a highly engaged team according to Denison Consulting, which conducted our 2025 Team Member engagement survey. Our Values We maintain a core set of values that guide the organization and our culture. They are: • Generosity First, Always - We lead with kindness.
We offer our Team Members competitive compensation and benefits including: • medical, dental, and vision insurance for full-time Team Members and a mini-medical plan for part-time Team Members including office visits, telemedicine, behavioral health, and prescription discounts, among other items; • 401K matching; • an employee stock purchase plan that gives virtually all our Team Members an ownership opportunity; • an Employee Assistance Program that covers paid mental health benefits and counseling for all Team Members and their household members, elder care services, alcohol and drug dependency programs, continuing education and college planning, marriage and relationship counseling, relocation guidance, and family planning assistance; • continuing education, including a tuition discount program in partnership with University of Maryland Global Campus for any Team Member wanting to further their education; • financial assistance for adoption and family planning through our Well Being program for all Team Members; • free meals to all Team Members during working hours and discounted meals outside of working hours; and • short- and long-term incentive programs for Team Members who hold a position above General Manager, including Team Members within manufacturing and our Collaboration Center Organization, while our General Managers participate in a short-term incentive program.
We offer our Team Members competitive compensation and benefits including: • medical, dental, and vision insurance for full-time Team Members and a mini-medical plan for part-time Team Members including office visits, telemedicine, behavioral health, and prescription discounts, among other items; • 401K matching; • an employee stock purchase plan that gives virtually all our Team Members an ownership opportunity; • an Employee Assistance Program that covers paid mental health benefits and counseling for all Team Members and their household members, elder care services, alcohol and drug dependency programs, continuing education and college planning, marriage and relationship counseling, relocation guidance, and family planning assistance; • continuing education, including a tuition discount program in partnership with University of Maryland Global Campus for any Team Member wanting to further their education; • financial assistance for adoption and family planning through our Well Being program for all Team Members; • free meals to all Team Members during working hours and discounted meals outside of working hours; and • short- and long-term incentive programs for our General Managers and Team Members within manufacturing and our Collaboration Center Organization.
The CAVA Food Safety Council, which is comprised of independent outside food safety experts, also supplements the knowledge and experience of our FSQA team and advises us on key initiatives in our restaurants and manufacturing facilities. 10 Table of Contents Our Suppliers As part of new suppliers’ onboarding, we review applicable food safety and quality programs as well as general insurance coverage as appropriate.
The CAVA Food Safety Council, which is comprised of independent outside food safety experts, also supplements the knowledge and experience of our FSQA team and advises us on key initiatives in our restaurants and manufacturing facilities. Our Suppliers As part of new suppliers’ onboarding, we review applicable food safety and quality programs as well as general insurance coverage as appropriate.
We also make available through the Investor Relations Section of our website other reports filed with or furnished to the SEC under the Exchange Act, including our proxy statements and reports filed by officers and directors 12 Table of Contents under Section 16(a) of the Exchange Act, as well as our Code of Business Conduct and Ethics, Corporate Governance Guidelines and Board committee charters.
We also make available through the Investor Relations Section of our website other reports filed with or furnished to the SEC under the Exchange Act, including our proxy statements and reports filed by officers and directors under Section 16(a) of the Exchange Act, as well as our Code of Business Conduct and Ethics, Corporate Governance Guidelines and Board committee charters.
Fair Labor Standards Act, which governs such matters as minimum wages and overtime, California Assembly Bill No. 1228, which increases the state’s minimum wage and creates a council to set minimum wages and recommend regulations to address working conditions and other matters in the broadly defined fast food industry, and a variety of similar federal, state, and local laws (such as fair work week laws, various wage and hour laws, termination and discharge laws, and state occupational safety regulations) that govern these and other employment law matters.
Fair Labor Standards Act, which governs such matters as minimum wages and overtime, California Assembly Bill No. 1228, which increased the state’s minimum wage and created a council to set minimum wages and recommend regulations to address working conditions and other matters in the broadly defined fast food industry, and a variety of similar federal, state, and local laws (such as fair work week laws, various wage and hour laws, termination and discharge laws, and state occupational safety regulations) that govern these and other employment law matters.
Intellectual Property We rely on a combination of trademark, patent, trade secret, copyright, and other intellectual property laws, as well as contractual provisions, including in employment, confidentiality, and inventions assignment agreements, to protect our intellectual property, intangible assets, and associated proprietary rights.
Intellectual Property We rely on a combination of trademark, patent, trade secret, copyright, and other intellectual property laws, as well as contractual provisions, including in employment, confidentiality, and inventions assignment agreements, to protect our 11 Table of Contents intellectual property, intangible assets, and associated proprietary rights.
Our FSQA, supply chain, culinary, and operations teams work together to implement our standards for food safety, restaurant cleanliness, and employee health protocols. In addition, we periodically conduct reviews in an effort to confirm that our ongoing food safety practices across our operations are robust and efficient.
Our FSQA, supply chain, culinary, 10 Table of Contents and operations teams work together to implement our standards for food safety, restaurant cleanliness, and employee health protocols. In addition, we periodically conduct reviews in an effort to confirm that our ongoing food safety practices across our operations are robust and efficient.
In the United States, we have obtained trademark registrations for key trademarks including CAVA, CRAZY FETA, SPLENDIDGREENS, and CAVA DIGITAL KITCHEN. We are currently pursuing additional trademark 11 Table of Contents registrations in the United States and will continue to pursue additional trademark registrations to the extent we believe they would be beneficial and cost-effective.
In the United States, we have obtained trademark registrations for key trademarks including CAVA, CRAZY FETA, SPLENDIDGREENS, and CAVA DIGITAL KITCHEN. We are currently pursuing additional trademark registrations in the United States and will continue to pursue additional trademark registrations to the extent we believe they would be beneficial and cost-effective.
The information on our website (or any webpages referenced in this Annual Report on Form 10-K) is not part of this or any other report CAVA files with, or furnishes to, the SEC.
The information on our website (or any webpages referenced in this Annual Report) is not part of this or any other report CAVA files with, or furnishes to, the SEC.
Our principal offices, which we refer to as our restaurant collaboration center, are located at 14 Ridge Square NW, Suite 500, Washington, D.C. and our telephone number is (202) 400-2920. Our website address is www.cava.com.
Our principal offices, which we refer to as our restaurant collaboration center, are located at 14 Ridge Square NW, Suite 500, Washington, D.C. 20016 and our telephone number is (202) 12 Table of Contents 400-2920. Our website address is www.cava.com.
Creating an Inclusive Culture Guided by the skills and insights of our Team Members, we’re intentional about bringing down barriers and creating a more inclusive world where everyone is welcome at our table. 8 Table of Contents We are strongly committed to supporting and engaging all Team Members.
Creating an Inclusive Culture Guided by the skills and insights of our Team Members, we’re intentional about human connection, bringing down barriers, and creating an environment where everyone is welcome at our table. 8 Table of Contents We are strongly committed to supporting and engaging all Team Members.
“Risk Factors—Risks Related to Information Technology Systems, Cybersecurity, Data Privacy and Intellectual Property” for more information. Government Regulation We are subject to various U.S. federal, state, and local regulations, including those relating to building and zoning requirements, public health and safety, the preparation and sale of food, and data privacy.
“Risk Factors—Risks Related to Information Technology Systems, Cybersecurity, Data Privacy and Intellectual Property” for more information. Government Regulation We are subject to or affected by various U.S. federal, state, and local laws and regulations, including those relating to building and zoning requirements, public health and safety, the preparation and sale of food, import duties and tariffs, and data privacy.
Manufacturing and Distribution We operate a 30,000-square-foot production facility in Laurel, Maryland, a state-of-the-art 55,000-square-foot production facility in Verona, Virginia, and a 4,000-square-foot distribution facility in Edison, New Jersey, which we use primarily for CPG distribution in the Northeast.
“Risk Factors—Risks Related to our Manufacturing and Supply Chain.” Manufacturing and Distribution We operate a 30,000-square-foot production facility in Laurel, Maryland, a state-of-the-art 55,000-square-foot production facility in Verona, Virginia, and a 4,000-square-foot distribution facility in Edison, New Jersey, which we use primarily for CPG distribution in the Northeast.
As of December 29, 2024, we operate 367 fast-casual CAVA Restaurants in 25 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. Our dips, spreads, and dressings are centrally produced and sold in grocery stores.
As of December 28, 2025, we operate 439 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.
People and Culture As of December 29, 2024, we employed approximately 10,300 Team Members in our restaurants and 390 within manufacturing and our Collaboration Center Organization.
People and Culture As of December 28, 2025, we employed approximately 12,900 Team Members in our restaurants and 580 within manufacturing and our Collaboration Center Organization.
Business Strategy We believe that our differentiated offerings and broad appeal give us significant opportunity in the Mediterranean and health and wellness food categories. Our guests span age groups, genders, and income brackets with a strong Millennial and a growing Gen Z contingent. The broad appeal of our brand is evidenced by substantial diversity across geographies, formats, dayparts, and channels.
Our guests span age groups, genders, and income brackets with a strong Millennial and a growing Gen Z contingent. The broad appeal of our brand is evidenced by substantial diversity across geographies, formats, dayparts, and channels.
We expect that our production facilities will support at least 750 restaurants, as well as our CPG business, with the potential to add capacity over time.
We expect that our production facilities will support at least 750 restaurants, as well as our CPG business, and plans are currently underway to develop additional capacity over time.
We continuously nurture our talent-rich pipeline by offering a clear promotional track for Team Members to become General Managers. A key component of our Team Member development pipeline includes a nationwide training network led by our Academy General Managers, who we have identified as achieving strong operational and financial results at the restaurants they operate.
Another key component of our Team Member development pipeline includes a nationwide training network led by our Academy General Managers, who we have identified as achieving strong operational and financial results at the restaurants they operate. Total Rewards We believe recognition and rewards are key to a healthy and vibrant culture.
Our CAVA Digital Revenue Mix was 36.4% and 36.0% in fiscal 2024 and 2023, respectively. We are in the early stages of our catering program and plan to expand our catering capabilities to more CAVA restaurants around the country by leveraging our kitchen production in 2025. Quality and Food Safety We are deeply committed to food safety.
Digital Revenue Mix was 37.9% and 36.4% in fiscal 2025 and 2024, respectively. We are in the early stages of our catering program and plan to expand our catering capabilities to an additional test market in 2026. Quality and Food Safety We are deeply committed to food safety.
As certain suppliers come on board, we ask them to verify their sustainability and sourcing credentials, including animal welfare. We remain dedicated to broiler chicken welfare and work diligently with our suppliers to deliver on that commitment. Marketing Our marketing strategy is anchored in our growth mindset and centered on the needs of our guests.
We remain dedicated to broiler chicken welfare and work diligently with our suppliers to support that commitment. Marketing Our marketing strategy is grounded in a growth mindset and centered on the evolving needs of our guests.
Many of our 2025 restaurant openings in new markets will incorporate elements of our new Project Soul design, which, in addition to convenience, expresses our Mediterranean hospitality and taps into guests’ desire for human connection, including softer seating, more greenery and a warmer brand pallet.
Our 2026 restaurant openings will feature our new Project Soul design, which, in addition to convenience, expresses our Mediterranean hospitality and taps into guests’ desire for human connection, including softer seating, more greenery and a warmer brand pallet. Our restaurants generally range from 2,000 to 3,000 square feet in size and seat approximately 30 to 60 guests indoors.
To secure any potential sourcing needs well in advance of our growth, we continually evaluate the strength and diversity of our supply chain.
We conduct certain site visits to maintain our strong relationships and seek to ensure that our partners adhere to our high-quality standards. To secure any potential sourcing needs well in advance of our growth, we continually evaluate the strength and diversity of our supply chain. For additional information, see Item 1A.
Digital Business As consumers evolve and look for more convenient and personalized ways to engage with CAVA, our digital strategy is a key element of our growth strategy. We have developed an extensive multi-channel experience that consists of in-restaurant dining, digital pick-up, drive-thru pick-up in select restaurants, delivery, catering, and CPG offerings, fully supported by our robust digital infrastructure.
Digital Business As consumer preferences continue to shift toward convenience and personalization, digital remains a core pillar of our growth strategy. We have built a robust, multi-channel experience that includes in-restaurant dining, digital pick-up, drive-thru pick-up in select restaurants, delivery, catering in select markets, and CPG offerings—all supported by a strong digital and data infrastructure.
We care deeply about the quality of our food, where it comes from, and how it’s created. We are dedicated to working with and sourcing our products from farmers and suppliers who share our values. We strive to use clean label-friendly ingredients, source dairy products from farmers who don’t treat their cows with rbST, and serve only antibiotic-free proteins.
In 2025, we donated over 60,000 pounds of food with an overall retail value of $0.8 million. We care deeply about the quality of our food, where it comes from, and how it’s created. We are dedicated to working with and sourcing our products from farmers and suppliers who share our values.
We are focused on creating, capturing, and retaining demand by increasing our brand awareness while also building upon our existing value proposition to our guests. Brand Marketing Our diverse guest engagement touchpoints create an integrated guest experience ecosystem.
We focus on creating, capturing, and retaining demand by building brand awareness while working to strengthen our value proposition and relevance with guests across occasions and channels. Brand Marketing We engage guests through an integrated ecosystem of touchpoints designed to deliver a cohesive and consistent brand experience.
We utilize brand campaigns across a variety of paid, owned, and earned channels to reinforce our mission and extend the reach of our brand. Our paid channels include Google, Instagram, TikTok, influencer and creator partnerships, and out-of-home advertising. Our owned channels include our restaurants, loyalty program, CPG offerings, CAVA website, CAVA app, and CAVA social media.
Our brand campaigns span an optimized mix of paid, owned, and earned channels, reinforcing our mission and extending the reach of the CAVA brand. Paid media includes platforms such as Google, Instagram, TikTok, influencer and creator partnerships, and out-of-home advertising.
Sourcing, Manufacturing, and Distribution Our Sourcing and Supply Chain We have invested in vertically-integrated manufacturing capabilities and built a differentiated directly-sourced supply chain with more than 50 trusted grower, rancher, and producer partners. We conduct certain site visits to maintain our strong relationships and seek to ensure that our partners adhere to our high-quality standards.
As of December 28, 2025, we offered drive-thru pick-up at 75 locations. In select markets, we operate Digital Kitchens to serve as centralized production hubs. Sourcing, Manufacturing, and Distribution Our Sourcing and Supply Chain We have invested in vertically-integrated manufacturing capabilities and built a differentiated directly-sourced supply chain with more than 50 trusted grower, rancher, and producer partners.
Our reimagined loyalty program includes an earn and bank points model with a menu of reward redemption options, from our freshly made juices to entrées. Since its launch, loyalty sales have grown more than 2%.
Loyalty Program In 2024, we launched our reimagined loyalty program nationwide which features an earn-and-bank points model with flexible redemption options across our menu, from freshly made juices to entrees.
Diversity cultivation is one of seven core competencies we use to highlight the behaviors we expect of Team Members, which includes leveraging thoughts and insights of all Team Members. In addition, inclusivity is a hallmark of several of our other core competencies, such as enterprise leadership, service mindset, and people development.
We encourage our Team Members, to leverage each of their unique backgrounds, perspectives, and experiences to deliver exceptional results. Inclusivity is a hallmark of several of our core competencies, such as enterprise leadership, service mindset, and people development.
We also leverage our large social media following and frequently advertise our new restaurant openings on social media channels. We routinely announce new restaurants and Community Days to local media, and from time to time deliver flyers and menus to the homes and offices in the neighborhood to drive awareness and excitement.
To support new restaurant openings, we leverage our growing social media presence, local media outreach, and targeted neighborhood marketing efforts, including direct distribution of menus and flyers to nearby homes and offices. Together, these efforts drive awareness, trial, and excitement, contributing to strong restaurant performance.
Removed
Total Rewards We believe recognition and rewards are key to a healthy and vibrant culture.
Added
We centrally produce our dips, spreads, and certain dressing bases for use in our restaurants while also selling our dips, spreads, and prepared dressings in grocery stores. Business Strategy We believe that our differentiated offerings and broad appeal give us significant opportunity in the Mediterranean and health and wellness food categories.
Removed
We have a Team Member resource group, Allies in Motion (AIM), which encourages our Team Members to celebrate and learn about underrepresented groups to build a better world for our guests, other Team Members, and community.
Added
Under our Flavor Your Future platform, we continuously nurture our talent-rich pipeline by offering a clear promotional track for Team Members to become General Managers, including by the introduction of the Assistant General Manager role.
Removed
In addition, on average, we rank in the top quintile within the diversity and inclusion category, based on our Team Members’ responses to our 2024 Team Member engagement survey.
Added
We are committed to equal employment opportunities and to providing a respectful work environment free of harassment, discrimination, or retaliation on the basis of any protected classes or characteristics in accordance with applicable federal, state, and local laws.
Removed
Our restaurants generally range from 2,000 to 3,000 square feet in size and seat approximately 30 to 60 guests indoors. As of December 29, 2024, we offered drive-thru pick-up at 53 locations.
Added
We have also signed a lease to expand our Laurel, Maryland facility by an additional 20,000 square feet. This expansion is expected to support the growth of our CPG production and provide additional capacity for the restaurant‑focused manufacturing operations currently centered in Verona.
Removed
In select markets, we operate CAVA digital kitchens to serve as centralized production hubs and are currently piloting CAVA hybrid kitchens where we believe there is strong demand for our catering services.
Added
We strive to use clean label-friendly ingredients, source dairy products from farmers who don’t treat their cows with rbST, and serve only antibiotic-free beef and chicken. As certain suppliers come on board, we ask them to verify their sustainability and sourcing credentials, including with respect to animal welfare.
Removed
We also use a seasonal framework to generate excitement around new menu offerings several times a year. We recently launched our reimagined loyalty program nationwide with the goal of deepening personal relationships with guests, even as we scale.
Added
Our owned channels include our restaurants, loyalty program, CPG offerings, the CAVA website and app, and our presence on social media platforms. We also leverage a seasonal marketing framework to create excitement around new menu offerings throughout the year.
Removed
This initial phase of a multi-phased approach will grow our first-party data and help us share our Mediterranean hospitality across platforms in ways that resonate with guests on a personal level. Restaurant Marketing We strive to give our guests the warm and welcoming feeling of the Mediterranean with each visit to our restaurants.
Added
In 2025, we continued to evolve our reimagined loyalty program, introducing Sea, Sand, and Sun status tiers designed to recognize and reward our most engaged guests as their relationship with CAVA deepens. Guests may unlock accelerated earning, exclusive benefits, and elevated experiences as they progress through higher tiers.
Added
This tiered structure enables us to more effectively reward higher levels of spend, encourage progression over time, and deliver increasingly personalized experiences. As part of a multi-phased roadmap, the program continues to expand our first-party data capabilities and strengthens our ability to extend Mediterranean hospitality across channels in ways that feel both personal and scalable.
Added
All of our CPG products undergo a validated cold, pressurized process step that demonstrably reduces pathogens and ensures a high-level of food safety.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

111 edited+20 added−30 removed327 unchanged
Biggest changeIf consumption of any food causes or is alleged to cause injury or illness, we may be subject to litigation and may be liable for monetary damages as a result of a judgment against us or fines by federal, state, and foreign regulatory agencies. 16 Table of Contents In the event of a food safety or food packaging incident, the protocols and procedures that we have in place and the public statements we make in response to such incident may not be sufficient to address the potential impact to the safety of our guests and our reputation.
Biggest changeIf consumption of any food causes or is alleged to cause injury or illness, we may be subject to litigation 16 Table of Contents and may be liable for monetary damages as a result of a judgment against us or fines by federal, state, and foreign regulatory agencies.
Each new location requires that we take into account numerous factors in order to be profitable, such as: • negotiating leases with acceptable terms; • obtaining licenses, permits, and approvals on a timely basis; • complying with applicable zoning, land use, environmental, health and safety, and other governmental rules and regulations (including interpretations of such rules and regulations); 14 Table of Contents • unforeseen engineering or environmental problems; • proximity of a potential location to an existing location; • identifying, hiring, and training qualified Team Members to meet staffing needs; • local economic trends, population density, and area demographics; and • longer permitting or inspection cycles and availability of construction and restaurant equipment and services.
Each new location requires that we take into account numerous factors in order to be profitable, such as: • negotiating leases with acceptable terms; 14 Table of Contents • obtaining licenses, permits, and approvals on a timely basis; • complying with applicable zoning, land use, environmental, health and safety, and other governmental rules and regulations (including interpretations of such rules and regulations); • unforeseen engineering or environmental problems; • proximity of a potential location to an existing location; • identifying, hiring, and training qualified Team Members to meet staffing needs; • local economic trends, population density, and area demographics; and • longer permitting or inspection cycles and availability of construction and restaurant equipment and services.
Entering into acquisitions and investments and other strategic initiatives involve numerous risks, including: • expenses, delays, or difficulties in integrating acquired business, facilities, technologies, or products into our organization, including the failure to realize expected synergies and the inability to retain and integrate personnel; • expending significant cash or incurring substantial debt to finance acquisitions, which indebtedness may restrict our business or require the use of available cash to make interest and principal payments; • issues maintaining uniform standards, procedures, controls, and policies; • diversion of management’s attention and resources from operating our business to effectively execute the integration; • adverse effects on existing business relationships with suppliers, distributors, and partners; • guest acceptance of the acquired company’s offerings; • our ability to meet our targeted revenue, profit, and cash flow from acquired companies; • the possibility that we have acquired substantial contingent or unanticipated liabilities in connection with acquisitions; • the inability to identify all material issues concerning the companies we acquire or invest in; and • the possibility that investments we have made may decline significantly in value, which could lead to the potential impairment of the carrying value of goodwill associated with acquired businesses.
Entering into acquisitions and investments and other strategic initiatives involve numerous risks, including: • expenses, delays, or difficulties in integrating acquired businesses, facilities, technologies, or products into our organization, including the failure to realize expected synergies and the inability to retain and integrate personnel; • expending significant cash or incurring substantial debt to finance acquisitions, which indebtedness may restrict our business or require the use of available cash to make interest and principal payments; • issues maintaining uniform standards, procedures, controls, and policies; • diversion of management’s attention and resources from operating our business to effectively execute the integration; • adverse effects on existing business relationships with suppliers, distributors, and partners; • guest acceptance of the acquired company’s offerings; • our ability to meet our targeted revenue, profit, and cash flow from acquired companies; • the possibility that we have acquired substantial contingent or unanticipated liabilities in connection with acquisitions; • the inability to identify all material issues concerning the companies we acquire or invest in; and • the possibility that investments we have made may decline significantly in value, which could lead to the potential impairment of the carrying value of goodwill associated with acquired businesses.
These legal proceedings, which could include class action lawsuits and allegations of illegal, unfair, or inconsistent employment practices, including wage and hour, discrimination, harassment, wrongful termination, and vacation and family leave laws; food safety issues including related to food-borne illness, food packaging or food contamination and adverse health effects from consumption of our food; the nutritional content of food sold; disclosure and advertising practices; data security or privacy breaches and other cybersecurity incidents, claims, and allegations; intellectual property infringement; lease issues; violation of the federal securities laws or state corporations law; or other concerns.
These legal proceedings could include class action lawsuits and allegations of illegal, unfair, or inconsistent employment practices, including wage and hour, discrimination, harassment, wrongful termination, and vacation and family leave laws; food safety issues including related to food-borne illness, food packaging or food contamination and adverse health effects from consumption of our food; the nutritional content of food sold; disclosure and advertising practices; data security or privacy breaches and other cybersecurity incidents, claims, and allegations; intellectual property infringement; lease issues; violation of the federal securities laws or state corporations law; or other concerns.
Any failure, or perceived failure, to comply with laws or regulations could result in, among other things, revocation of required licenses, civil and criminal liability to us or our personnel, higher Team Member turnover, and negative publicity, and could expose us to litigation, or governmental investigations, or proceedings, which could have a material adverse effect our business, financial condition, and results of operations.
Any failure, or perceived failure, to comply with laws, regulations, or orders could result in, among other things, revocation of required licenses, civil and criminal liability to us or our personnel, higher Team Member turnover, and negative publicity, and could expose us to litigation, or governmental investigations, or proceedings, which could have a material adverse effect our business, financial condition, and results of operations.
As a result of these factors and the differences among our fiscal quarters, our quarterly operating results as well as our key performance measures, such as CAVA Same Restaurant Sales Growth and CAVA Restaurant-Level Profit Margin, may fluctuate significantly from quarter to quarter and our results for any one quarter are not indicative of any other quarter.
As a result of these factors and the differences among our fiscal quarters, our quarterly operating results as well as our key performance measures, such as Same Restaurant Sales and CAVA Restaurant-Level Profit Margin, may fluctuate significantly from quarter to quarter and our results for any one quarter are not indicative of any other quarter.
We do not know if we will be able to identify acquisitions or strategic relationships we deem suitable, whether we will be able to successfully complete any such transactions on favorable terms or at all, or whether we will be able to successfully integrate any acquired business, facilities, technologies, or products into our business or retain any key personnel, suppliers, or guests.
We do not know if we will be able to identify acquisitions or strategic relationships we deem suitable, whether we will be able to successfully complete any such transactions on favorable terms or at all, or whether we will be able to successfully integrate any acquired businesses, facilities, technologies, or products into our business or retain any key personnel, suppliers, or guests.
See “— We are subject to evolving rules and regulations with respect to ESG matters. ” The ongoing and long-term costs of these impacts related to climate change and other sustainability related issues could have a material adverse effect on our business, financial condition, and results of operations.
See “— We are subject to evolving rules and regulations with respect to sustainability matters. ” The ongoing and long-term costs of these impacts related to climate change and other sustainability related issues could have a material adverse effect on our business, financial condition, and results of operations.
We may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 or our independent registered public accounting firm may not issue an unqualified opinion.
We may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404(a) or our independent registered public accounting firm may not issue an unqualified opinion.
For example, we recently launched a new rewards program designed to increase customer loyalty. If the rewards program is not well received by customers or if we are unable to successfully implement the new program, the rewards program may fail to achieve its intended objectives.
For example, we recently launched a reimagined loyalty rewards program designed to increase customer loyalty. If the rewards program is not well received by customers or if we are unable to successfully implement the new program, the rewards program may fail to achieve its intended objectives.
If our ESG-related data, processes and reporting are incomplete or inaccurate, or if we fail to achieve progress with respect to our, and our industry’s, ESG-related aspirational goals, it could lead to private, regulatory, or administrative challenges or proceedings, including with respect to our disclosure controls and procedures, as well as adverse publicity, any of which could damage our reputation and our business, financial condition, and results of operations.
If our sustainability-related data, processes and reporting are incomplete or inaccurate, or if we fail to achieve progress with respect to our, and our industry’s, sustainability-related aspirational goals, it could lead to private, regulatory, or administrative challenges or proceedings, including with respect to our disclosure controls and procedures, as well as adverse publicity, any of which could damage our reputation and our business, financial condition, and results of operations.
The declaration, amount, and payment of any future dividends will be at the sole discretion of our Board of Directors, and will depend on, among other things, general and economic conditions, our results of operations and financial condition, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us, including restrictions under our credit agreements and other indebtedness we may incur, and such other factors as our Board of Directors may deem relevant.
The declaration, amount, and payment of any future dividends will be at the sole discretion of our Board of Directors, and will depend on, among other things, general and economic conditions, our results of operations and financial condition, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us, including restrictions under our credit agreements and 37 Table of Contents other indebtedness we may incur, and such other factors as our Board of Directors may deem relevant.
Further, we currently expect that a meaningful portion of our new restaurants opening in fiscal 2025 and beyond will have drive-thru pick-up capabilities, which typically require additional capital expenditures and higher real estate costs as well as incremental infrastructure and construction costs.
Further, we currently expect that a meaningful portion of our new restaurants opening in fiscal 2026 and beyond will have drive-thru pick-up capabilities, which typically require additional capital expenditures and higher real estate costs as well as incremental infrastructure and construction costs.
Evolving ESG rules, regulations and stakeholder expectations increase general and administrative expenses and may divert management’s attention to the consideration and measurement of metrics and standards related to these rules, regulations, and stakeholder expectations. Developing and acting on initiatives within the scope of ESG, and collecting, measuring, and reporting ESG-related information and metrics can be costly, difficult and time consuming.
Evolving rules, regulations and stakeholder expectations increase general and administrative expenses and may divert management’s attention to the consideration and measurement of metrics and standards related to these rules, regulations, and stakeholder expectations. Developing and acting on initiatives within the scope of sustainability, and collecting, measuring, and reporting sustainability-related information and metrics can be costly, difficult and time consuming.
We may communicate certain aspirational initiatives and goals regarding ESG-related matters to our stakeholders. These aspirational initiatives and goals could be difficult and expensive to quantify and implement. In addition, such aspirational initiatives and goals are subject to risks and uncertainties, many of which may not be foreseeable or may be outside of our control.
We may communicate certain aspirational initiatives and goals regarding sustainability-related matters to our stakeholders. These aspirational initiatives and goals could be difficult and expensive to quantify and implement. In addition, such aspirational initiatives and goals are subject to risks and uncertainties, many of which may not be foreseeable or may be outside of our control.
Our ability to maintain prices or effectively implement price increases may be affected by a number of factors, including competition, the effectiveness of our marketing programs, the continuing strength of our brand, and general economic conditions, including inflationary pressures.
Our ability to maintain prices or effectively implement price increases may be affected by a number of factors, including competition, the effectiveness of our marketing programs, the continuing strength of our brand, consumer perception and general economic conditions, including inflationary pressures.
ESG-related rules and regulations continue to evolve in scope and complexity, and the increase in costs to comply with such evolving rules and regulations, as well as any risk of noncompliance, could adversely impact our business, financial condition, and results of operations.
Sustainability-related rules and regulations continue to evolve in scope and complexity, and the increase in costs to comply with such evolving rules and regulations, as well as any risk of noncompliance, could adversely impact our business, financial condition, and results of operations.
Furthermore, maintaining appropriate staffing and hiring and training new staff, both for our restaurants and our facilities, requires precise workforce planning, which has become more complex due to, among other things: • significant staffing and hiring issues in the restaurant industry throughout the country; • laws related to wage and hour violations or predictive scheduling, such as “Fair Workweek” or “secure scheduling,” in certain geographic areas where we operate as well as New York City’s “just cause” termination legislation; and • low levels of unemployment, which has resulted in aggressive competition for talent, wage inflation, and pressure to improve benefits and workplace conditions to remain competitive.
Furthermore, maintaining appropriate staffing and hiring and training new staff, both for our restaurants and our facilities, requires precise workforce planning, which has become more complex due to, among other things: • significant staffing and hiring issues in the restaurant industry throughout the country; • laws related to wages and working hours and predictive scheduling, such as “Fair Workweek” or “secure scheduling,” in certain geographic areas where we operate, as well as New York City’s “just cause” termination legislation; and • low levels of unemployment, which has resulted in aggressive competition for talent, wage inflation, and pressure to improve benefits and workplace conditions to remain competitive.
See “—Risks Related to Our People and 30 Table of Contents Culture—We may face increases in labor costs, labor shortages, and difficulties in hiring, training, motivating, and retaining the right Team Members.” In addition, we are subject to changes in U.S. federal, state, and local regulations that impact the ingredients and nutritional content of the food and beverages we offer.
See “—Risks Related to Our People and Culture—We may face increases in labor costs, labor shortages, and difficulties in hiring, training, motivating, and retaining the right Team Members.” In addition, we are subject to changes in U.S. federal, state, and local regulations that impact the ingredients and nutritional content of the food and beverages we offer.
Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate of incorporation, except our 39 Table of Contents stockholders will not be deemed to have waived (and cannot waive) compliance with the federal securities laws and the rules and regulations thereunder.
Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate of incorporation, except our stockholders will not be deemed to have waived (and cannot waive) compliance with the federal securities laws and the rules and regulations thereunder.
We also use various third-party vendors, such as software as a service and infrastructure as a service, to provide support to our restaurant operations, core enterprise, and supply chain systems, cybersecurity solutions, and cloud based hosting of our proprietary applications. We also outsource certain accounting, payroll, and human resource functions to business process service providers.
We also use various third-party vendors, such as software as a service and infrastructure as a service, to provide support to our restaurant operations, core enterprise, and supply chain systems, cybersecurity solutions, and cloud based hosting of our proprietary applications. We also outsource certain accounting, payroll, and human resource functions to 29 Table of Contents business process service providers.
The risk of these claims may increase, and the cost to us to insure against such perils may rise or become more difficult to obtain, as the number of catering and delivery orders we fulfill increases.
The risk of these claims may increase, and the cost to us to insure against such risks may rise or become more difficult to obtain, as the number of catering and delivery orders we fulfill increases.
The CAVA app and online ordering system could be interrupted by technological failures or user errors, or be subject to cyber-attacks, which could adversely impact our sales and brand image. 18 Table of Contents Substantially all of our delivery orders, including native delivery orders, are fulfilled through our third-party delivery partners.
The CAVA app and online ordering system could be interrupted by technological failures or user errors, or be subject to cyber-attacks, which could adversely impact our sales and brand image. Substantially all of our delivery orders, including native delivery orders, are fulfilled through our third-party delivery partners.
Our amended and restated certificate of incorporation further will provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the federal securities laws of the United States, including any claims under the Securities Act and the Exchange Act of 1934, as amended (the “Exchange Act”).
Our amended and restated certificate of incorporation further will provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the federal securities laws of the United States, including any claims under the Securities Act of 1933, as amended (the “Securities Act”) and the Exchange Act.
As a result of these covenants and restrictions, we and our subsidiaries are, and will be, limited in 35 Table of Contents how we conduct our business, and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities. See Part II, Item 7.
As a result of these covenants and restrictions, we and our subsidiaries are, and will be, limited in how we conduct our business, and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities. See Part II, Item 7.
From time to time, legislative proposals are made to increase the minimum wage at the U.S. federal, state, and local levels, such as California Assembly Bill No. 1228, which was signed into law in September 2023 and which increases the state’s minimum wage and creates a Fast Food Council to set minimum wages and recommend regulations to address working conditions and other matters in the broadly defined fast food industry.
From time to time, legislative proposals are made to increase the minimum wage at the U.S. federal, state, and local levels, such as California Assembly Bill No. 1228, which was signed into law in September 2023 and which increased the state’s minimum wage and created a Fast Food Council to set minimum wages and recommend regulations to address working conditions and other matters in the broadly defined fast food industry.
An additional 17 states (Colorado, Connecticut, Iowa, Utah, Oregon, Montana, Tennessee, Indiana, Delaware, New Jersey, New Hampshire, Kentucky, Maryland, Minnesota, Nebraska, Rhode Island, and Texas), have since also passed comprehensive state privacy laws that impose additional obligations and requirements on businesses. Data privacy laws and regulations are constantly evolving and can be subject to significant change or interpretive application.
Additional states, such as Colorado, Connecticut, Iowa, Utah, Oregon, Montana, Tennessee, Indiana, Delaware, New Jersey, New Hampshire, Kentucky, Maryland, Minnesota, Nebraska, Rhode Island, and Texas, have since also passed comprehensive state privacy laws that impose additional obligations and requirements on businesses. Data privacy laws and regulations are constantly evolving and can be subject to significant change or interpretive application.
If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us 36 Table of Contents to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements, and harm our results of operations.
If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements, and harm our results of operations.
If any of our distributors or suppliers perform inadequately, or our distribution or supply relationships are disrupted for any reason, our business, financial condition, and results of operations could be materially adversely affected. 21 Table of Contents We may not successfully optimize, operate, and manage our production facilities.
If any of our distributors or suppliers perform inadequately, or our distribution or supply relationships are disrupted for any reason, our business, financial condition, and results of operations could be materially adversely affected. We may not successfully optimize, operate, and manage our production facilities.
These could include concerns about our food’s quality and safety, the impact that our food and products (including our packaging) may have on the environment, data security breaches, third-party service providers (including relating to delivery services and information technology), employment-related claims, or government or industry findings concerning our restaurants or our industry, or other concerns, which may be outside our control.
Negative publicity could include concerns about our food’s quality and safety, the impact that our food and products (including our packaging) may have on the environment, data security breaches, concerns or complaints about third-party service providers (including relating to delivery services and information technology), employment-related claims, or government or industry findings concerning our restaurants or our industry, or other concerns, which may be outside our control.
These efforts could be expensive and time-consuming and may disrupt our ongoing business and prevent management from focusing on our operations. 20 Table of Contents Risks Related to Our Manufacturing and Supply Chain We may not be able to manage our manufacturing and supply chain effectively, which may adversely affect our results of operations.
These efforts could be expensive and time-consuming and may disrupt our ongoing business and prevent management from focusing on our operations. Risks Related to Our Manufacturing and Supply Chain We may not be able to manage our manufacturing and supply chain effectively, which may adversely affect our results of operations.
Issuances of common stock or voting preferred stock would reduce your influence over matters on which our 37 Table of Contents stockholders vote, and, in the case of issuances of preferred stock, would likely result in your interest in us being subject to the prior rights of holders of that preferred stock, if any.
Issuances of common stock or voting preferred stock would reduce your influence over matters on which our stockholders vote, and, in the case of issuances of preferred stock, would likely result in your interest in us being subject to the prior rights of holders of that preferred stock, if any.
In addition, a ban of a social media platform, such as TikTok, on which we, and social media influencers that we partner with, have acquired significant followers, may adversely affect our ability to engage with guests and promote our brand.
In addition, a ban of a social media platform, such as TikTok, on which we, and social media 19 Table of Contents influencers that we partner with, have acquired significant followers, may adversely affect our ability to engage with guests and promote our brand.
The prices we pay are subject to fluctuations beyond our control, such as problems in production or distribution, food safety concerns, government regulation, livestock markets, food recalls, climate conditions, labor strikes or shortages, and macroeconomic conditions.
The prices we pay are subject to fluctuations beyond our control, such as problems in production or distribution, food safety concerns, government regulation, livestock markets, food recalls, climate conditions, labor strikes or shortages, and macroeconomic conditions, including inflation and tariffs.
We are subject to evolving rules and regulations with respect to ESG matters. We are subject to a variety of ESG-related rules and regulations promulgated by a number of governmental and self-regulatory organizations.
We are subject to evolving rules and regulations with respect to sustainability matters. We are subject to a variety of sustainability-related rules and regulations promulgated by a number of governmental and self-regulatory organizations.
Furthermore, we cannot predict the effects that world events, which may include climate disruptions, pandemic or disease outbreak, actual or threatened armed conflicts, including the ongoing armed conflicts in Ukraine and the Middle East, terrorist attacks, efforts to combat terrorism, heightened security requirements, or a failure to protect information systems for critical infrastructure could have on our operations, the economy, or guests’ confidence generally.
Furthermore, we cannot predict the effects that world events, which may include climate disruptions, pandemic or disease outbreak, actual or threatened armed conflicts, including the ongoing armed conflicts in Ukraine and other ongoing geopolitical tensions, terrorist attacks, efforts to combat terrorism, heightened security requirements, or a failure to protect information systems for critical infrastructure could have on our operations, the economy, or guests’ confidence generally.
Furthermore, we may in the future acquire restaurants with the plan of converting those restaurants into CAVA restaurants and we may not be able to do so successfully while ensuring that the converted restaurant meets our CAVA standards.
Furthermore, we may in the future acquire restaurants with the plan of converting those 20 Table of Contents restaurants into CAVA restaurants and we may not be able to do so successfully while ensuring that the converted restaurant meets our CAVA standards.
Any restrictions on the import of products imposed by government authorities, as well as any new or increased import duties, tariffs, sanctions, or taxes, geopolitical developments, such as the ongoing armed conflicts in Ukraine and the Middle East, or other changes in U.S. trade or tax policy, could result in higher food and supply costs.
Any restrictions on the import of products imposed by government authorities, as well as any new or increased import duties, tariffs, sanctions, or taxes, geopolitical developments, such as the ongoing armed conflict in Ukraine, or other changes in U.S. trade or tax policy, could result in higher food and supply costs.
Our quarterly financial results may fluctuate significantly, including due to factors that are not in our control, and could fail to meet investors’ expectations for various reasons, including: • negative publicity about the safety of our food, packaging, employment-related issues, litigation, or other issues involving our restaurants; • fluctuations in supply costs, including as a result of inflation, particularly for our most significant ingredients, and our inability to offset the higher cost with price increases without adversely impacting guest spending; • labor availability and wages of Team Members, including as a result of inflation; • increases in marketing or promotional expenses; • the timing of new restaurant openings and related revenue and expenses, such as increased labor expenses, and the operating costs at newly opened restaurants; • the impact of inclement weather and natural disasters, such as freezes and droughts, which could decrease sales volumes and increase the costs of ingredients; • the amount and timing of equity-based compensation; • litigation, settlement costs, and related legal expenses; • tax expenses, asset impairment charges, and non-operating costs; and • variations in general economic conditions and events, including the impact of inflation and recent turmoil in the banking industry.
Our quarterly financial results may fluctuate significantly, including due to factors that are not in our control. 33 Table of Contents Our quarterly financial results may fluctuate significantly, including due to factors that are not in our control, and could fail to meet investors’ expectations for various reasons, including: • negative publicity about the safety of our food, packaging, employment-related issues, litigation, or other issues involving our restaurants; • fluctuations in supply costs, including as a result of inflation and tariffs, particularly for our most significant ingredients, and our inability to offset the higher cost with price increases without adversely impacting guest spending; • labor availability and wages of Team Members, including as a result of inflation; • increases in marketing or promotional expenses; • the timing of new restaurant openings and related revenue and expenses, such as increased labor expenses, and the operating costs at newly opened restaurants; • the impact of inclement weather and natural disasters, such as freezes and droughts, which could decrease sales volumes and increase the costs of ingredients; • the amount and timing of equity-based compensation; • litigation, settlement costs, and related legal expenses; • tax expenses, asset impairment charges, and non-operating costs; and • variations in general economic conditions and events, including the impact of inflation, tariffs and high interest rates.
For example, we have experienced periodic shortages in grape tomatoes due to the impact of hurricanes over the last three years. As a result, we have entered into alternative arrangements to better ensure our supply. These factors are beyond our control and, in many instances, unpredictable.
For example, we have experienced periodic shortages in grape tomatoes due to the impact of hurricanes over several of the past years. As a result, we have entered into alternative arrangements to better ensure our supply. These factors are beyond our control and, in many instances, unpredictable.
Due to the highly competitive nature of our industry, we must effectively and efficiently promote and market our restaurants and brand to attract and retain guests and sustain our competitive position. Marketing investments may be costly.
Our efforts to market our restaurants and brand may not be successful. Due to the highly competitive nature of our industry, we must effectively and efficiently promote and market our restaurants and brand to attract and retain guests and sustain our competitive position. Marketing investments may be costly.
In particular, several jurisdictions in which we operate, including New York City, have implemented “Fair Workweek” legislation, which requires fast food employers to provide employees with specified notice in scheduling changes and pay premiums for changes made to employees’ schedules, among other requirements.
In particular, several jurisdictions in which we operate, including New York City, have implemented “Fair Workweek” legislation, which generally require fast food employers to provide employees with specified notice in scheduling changes and pay premiums for certain changes made to employees’ schedules, among other requirements.
Our larger competitors may also be able to take advantage of greater economies of scale than we can and may be better able to increase prices to reflect cost pressures and increase their marketing and promotional activity, including through discount strategies.
Our larger competitors may also be able to take advantage of greater economies of scale than we can and may be better able to limit price increases and/or increase prices to reflect cost pressures and increase their marketing and promotional activity, including through discount strategies.
However, Section 22 of the Securities Act of 1933, as amended (the “Securities Act”), creates concurrent jurisdiction for federal and state courts over all suits brought to enforce a duty or liability created by the Securities Act or the rules and regulations thereunder and accordingly, we cannot be certain that a court would enforce such provision.
However, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce a duty or liability created by the Securities Act or the rules and regulations thereunder and accordingly, we cannot be certain that a court would enforce such provision.
Consumer preference and behavior changes include dietary trends, attention to different nutritional aspects of foods and beverages (see “—Risks Related to Legal and Governmental Regulation—We are subject to extensive laws and regulatory requirements, and failure to comply with, or changes in, these laws or regulations could have an adverse impact on our business.”), preferences for certain sales channels, reduced demand for food away from home as a result of the recent increase in remote and hybrid working arrangements, concerns regarding the health effects of certain foods and beverages, attention to sourcing practices relating to ingredients, animal welfare concerns, and environmental concerns regarding packaging, among others.
Consumer preference and behavior changes include dietary trends, attention to different nutritional aspects of foods and beverages (see “—Risks Related to Legal and Governmental Regulation—We are subject to extensive laws and regulatory requirements, and failure to comply with, or changes in, these laws or regulations could have an adverse impact on our business.”), preferences for certain sales channels, reduced demand for food away from home, concerns regarding the health effects of certain foods and beverages, attention to sourcing practices relating to ingredients, animal welfare concerns, and environmental concerns regarding packaging, among others.
Furthermore, if we are unable to repay, refinance, or restructure our 2022 Credit Facility, the lenders under the 2022 Credit Facility could proceed against the collateral granted to them to secure such indebtedness, which could force us into bankruptcy or liquidation.
Furthermore, if we are unable to repay, refinance, or restructure our 2022 Credit Facility or any future indebtedness, the lenders thereto could proceed against the collateral granted to them to secure such indebtedness, which could force us into bankruptcy or liquidation.
We may be criticized for the scope or nature of such aspirational initiatives or goals, for any revisions to such initiatives or goals, or for failing, or being perceived to have failed, to achieve such initiatives or goals.
We may be criticized for the scope or nature of such aspirational initiatives or goals, for 32 Table of Contents any revisions to such initiatives or goals, or for failing, or being perceived to have failed, to achieve such initiatives or goals.
Risks Related to Our Indebtedness Our ability to incur a substantial level of indebtedness may reduce our financial flexibility, affect our ability to operate our business, and divert cash flow from operations for debt service. As of December 29, 2024, we had no outstanding indebtedness, and $74.3 million of undrawn availability, under our 2022 Credit Facility (as defined below).
Risks Related to Our Indebtedness Our ability to incur a substantial level of indebtedness may reduce our financial flexibility, affect our ability to operate our business, and divert cash flow from operations for debt service. As of December 28, 2025, we had no outstanding indebtedness, and $74.1 million of undrawn availability, under our 2022 Credit Facility (as defined below).
Certain food items are perishable and/or may be contaminated, and we have limited control over whether these items will be delivered to us in appropriate condition for use in our restaurants.
Certain food items are perishable and/or may be 21 Table of Contents contaminated, and we have limited control over whether these items will be delivered to us in appropriate condition for use in our restaurants.
In addition, pursuant to Section 404, we are required to perform system and process evaluations and testing of our internal control over financial reporting to allow management to furnish a report on, among other things, the effectiveness of our internal control over financial reporting.
In addition, pursuant to Section 404(a) of the Sarbanes Oxley Act (“Section 404(a)”), we are required to perform system and process evaluations and testing of our internal control over financial reporting to allow management to furnish a report on, among other things, the effectiveness of our internal control over financial reporting.
Item 1A. Risk Factors You should carefully consider the following risk factors as well as the other information set forth in this Annual Report on Form 10-K (this “Annual Report”), including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes thereto.
Item 1A. Risk Factors You should carefully consider the following risk factors as well as the other information set forth in this Annual Report, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes thereto.
Our 2022 Credit Facility restricts, subject to certain exceptions, among other things, our ability and the ability of our subsidiaries to: • incur additional indebtedness and guarantee indebtedness; • prepay, redeem, or repurchase certain debt; • create or incur liens; • make investments and loans; • pay dividends or make other distributions, in respect of, or repurchase or redeem, capital stock; • engage in mergers, consolidations, or sales of all or substantially all of our assets; • sell or otherwise dispose of assets; • amend, modify, waive, or supplement certain subordinated indebtedness to the extent such amendments would be materially adverse to the interests of the lenders; and • engage in certain transactions with affiliates.
Our 2022 Credit Facility restricts, subject to certain exceptions, among other things, our ability and the ability of our subsidiaries to: • incur additional indebtedness and guarantee indebtedness; • prepay, redeem, or repurchase certain debt; • create or incur liens; • make investments and loans; • pay dividends or make other distributions, in respect of, or repurchase or redeem, capital stock; • engage in mergers or consolidations, or the liquidation or winding up of our or our subsidiaries businesses; • sell or otherwise dispose of assets; • amend, or otherwise modify certain indebtedness to the extent such amendments would be materially adverse to the interests of the lenders; and • engage in certain transactions with affiliates.
Operating lease costs account for a significant portion of our operating expenses, and represented 7.1%, 8.2%, and 9.8% of our revenue in fiscal 2024, 2023, and 2022, respectively.
Operating lease costs account for a significant portion of our operating expenses, and represented 7.0%, 7.1%, and 8.2% of our revenue in fiscal 2025, 2024, and 2023, respectively.
Furthermore, the opening of a new facility requires the efforts and attention of our management and other personnel, which has and will continue to divert resources from our existing business operations. We will also need to hire and retain more skilled Team Members to operate any new facility, including the recently opened facility in Virginia.
Furthermore, the opening of a new facility requires the efforts and attention of our management and other personnel, which has and will continue to divert resources from our existing business operations. We will also need to hire and retain more skilled Team Members to operate any new facility, as we did for our facility in Virginia that opened in 2024.
These provisions will provide for, among other things: • a classified board of directors, as a result of which our Board of Directors will be divided into three classes, with each class serving for staggered three-year terms; • the ability of our Board of Directors to issue one or more series of preferred stock; 38 Table of Contents • advance notice requirements for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings; • certain limitations on convening special stockholder meetings; • the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66 2 / 3 % of the shares of common stock entitled to vote generally in the election of directors; and • the required approval of at least 66 2 / 3 % of the voting power of the outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class, to adopt, amend, or repeal certain provisions of our amended and restated certificate of incorporation.
These provisions will provide for, among other things: • a classified board of directors, as a result of which our Board of Directors will be divided into three classes, with each class serving for staggered three-year terms; • the ability of our Board of Directors to issue one or more series of preferred stock; • advance notice requirements for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings; • certain limitations on convening special stockholder meetings; • the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66 2 / 3 % of our common stock; and • the required approval of holders of at least 66 2 / 3 % of our common, to adopt, amend, or repeal certain provisions of our amended and restated certificate of incorporation.
For example, delays in construction and increased construction costs, including as a result of macroeconomic factors, as well as delays in inspections, the receipt of necessary permits, and equipment availability, have caused, and are continuing to cause, a delay in opening restaurants, resulting in increased costs and lower than anticipated sales.
For example, delays in construction and increased construction costs, including as a result of macroeconomic factors such as labor shortages, inflation, tariffs, and regulatory changes, as well as delays in inspections, the receipt of necessary permits, and equipment availability, have caused, and are continuing to cause, a delay in opening restaurants, resulting in increased costs and lower than anticipated sales.
If we are unable to successfully compete, our sales volume and/or pricing may be subject to downward pressure and we may not be able to increase, or sustain, our growth rate or revenue or reach profitability. Further, as we expand our geographic presence and develop our digital channels, we anticipate we will face increased competition for channel access.
If we are unable to successfully compete, our sales volume and/or pricing may be subject to downward pressure and we may not be able to increase, or sustain, our growth rate or revenue or remain profitable. 13 Table of Contents Further, as we expand our geographic presence and develop our digital channels, we anticipate we will face increased competition for channel access.
“Financial Statements and Supplementary Data.” Lastly, the occurrence of food-borne illnesses or food safety issues could result in a temporary supply disruption and adversely affect the price and availability of affected ingredients.
Lastly, the occurrence of food-borne illnesses or food safety issues could result in a temporary supply disruption and adversely affect the price and availability of affected ingredients.
We may face increases in food, commodity, energy, and other costs. Our profitability depends in part on our ability to anticipate and react to changes in food, commodity, energy, and other costs.
Our profitability depends in part on our ability to anticipate and react to changes in food, commodity, energy, and other costs.
As part of that strategy, we sometimes enter into geographic markets in which we have little or no prior operating experience. For example, we expanded into the Midwest in 2024 and are continuing to expand further into places in which we historically have not had a presence and have no restaurant operating experience.
As part of that strategy, we sometimes enter into geographic markets in which we have little or no prior operating experience. For example, we expanded into South Florida, Detroit, Indianapolis, and Pittsburgh in 2025, and are continuing to expand further into places in which we historically have not had a presence and have no restaurant operating experience.
From time to time, there may be changes in our senior management team, which could disrupt our business, particularly if any non-compete clauses in employment agreements are deemed to be unenforceable for any reason, including as a result of regulatory restrictions.
From time to time, there may be changes in our senior management team, such as the departure of our former Chief Operations Officer in September 2025, which could disrupt our business, particularly if any non-compete clauses in employment agreements are deemed to be unenforceable for any reason, including as a result of regulatory restrictions.
However, if we are unable to fully implement our disaster recovery plans, we may experience delays in recovery of data, inability to perform vital corporate 33 Table of Contents functions, tardiness in required reporting and compliance, failures to adequately support field operations, and other breakdowns in normal communication and operating procedures that could have a material adverse effect on our financial condition, results of operation, and exposure to administrative and other legal claims.
If we are unable to fully implement our disaster recovery procedures and business continuity plans or if our backup and off-site data recovery locations experience a similar disaster or force majeure event, we may experience delays in recovery of data, inability to perform vital corporate functions, tardiness in required reporting and compliance, failures to adequately support field operations, and other breakdowns in normal communication and operating procedures that could have a material adverse effect on our financial condition, results of operation, and exposure to administrative and other legal claims.
Our future level of indebtedness could affect our operations in several ways, including but not limited to the following: • increase our vulnerability to changes in general economic, industry, and competitive conditions; • require us to dedicate a portion of our cash flow from operations to make payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, and other general corporate purposes; • place us at a competitive disadvantage compared to our competitors that are less leveraged and therefore potentially more able to take advantage of opportunities that our level of indebtedness would prevent us from pursuing; and • impair our ability to obtain additional financing in the future for working capital, capital expenditures, debt service requirements, acquisitions, or other purposes.
Our future level of indebtedness could affect our operations in several ways, including but not limited to the following: • increase our vulnerability to changes in general economic, industry, and competitive conditions; • require us to dedicate a portion of our cash flow from operations to make payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, and other general corporate purposes; • place us at a competitive disadvantage compared to our competitors that are less leveraged and therefore potentially more able to take advantage of opportunities that our level of indebtedness would prevent us from pursuing; and • impair our ability to obtain additional financing in the future for working capital, capital expenditures, debt service requirements, acquisitions, or other purposes. 34 Table of Contents In addition, the 2022 Credit Facility contains, and agreements governing future indebtedness may contain, restrictive covenants that limits our ability to engage in activities that may be in our long-term best interests.
Although we have operational safeguards in place, these safeguards may not be effective in preventing degradations or interruptions of our information technology systems or platforms to operate effectively and be available. As our business expands, it may become more difficult to scale, maintain and improve our online and mobile ordering platforms.
We may not be effective in preventing degradations or interruptions of our information technology systems or platforms and if our systems and platforms do not operate effectively and are not available our business may be harmed. As our business expands, it may become more difficult to scale, maintain and improve our online and mobile ordering platforms.
These provisions also may have the effect of preventing changes in our Board of Directors and may make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests. As a result, our stockholders may be limited in their ability to obtain a premium for their shares.
These provisions also may have the effect of preventing changes in our Board of Directors and may make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.
For those locations in which we are able to secure an attractive restaurant location, our progress in developing and subsequently opening new restaurants may be slower than desired, resulting in increased costs and lower than expected sales.
We may not be able to successfully identify and secure a sufficient number of attractive restaurant locations in new or existing markets. For those locations in which we are able to secure an attractive restaurant location, our progress in developing and subsequently opening new restaurants may be slower than desired, resulting in increased costs and lower than expected sales.
Efforts to hack or breach security measures, failures of systems or software to operate as designed or intended, viruses, operator error, or inadvertent releases of data all threaten our and our business partners’ information systems and records.
Efforts to hack or breach security measures, failures of our or third party systems or software to operate as designed or intended, viruses, operator error, or inadvertent releases of data all threaten our and our business partners’ information systems and records and could have a material adverse effect on our business.
See Note 9 (Commitments and Contingencies) included in Part II, Item 8. “Financial Statements and Supplementary Data.” A judgment or other liability in excess of our insurance coverage for any claims or any adverse publicity resulting from claims could adversely affect our business, financial condition, and results of operations.
“Financial Statements and Supplementary Data.” A judgment or other liability in excess of our insurance coverage for any claims or any adverse publicity resulting from claims could adversely affect our business, financial condition, and results of operations.
See “—Our inability or failure to utilize, recognize, respond to, and effectively manage the immediacy of social media could have a material adverse effect on our business.” The risks associated with such negative publicity cannot be completely mitigated and may result in damage to our brand. 15 Table of Contents Our efforts to market our restaurants and brand may not be successful.
See “—Our inability or failure to utilize, recognize, respond to, and 15 Table of Contents effectively manage the immediacy of social media could have a material adverse effect on our business.” The risks associated with such negative publicity may result in damage to our brand and may have a material adverse effect on our business, financial condition and results of operations.
Testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business. In addition, since we are no longer an “emerging growth company,” our auditors are required to issue an attestation report on the effectiveness of our internal controls pursuant to Section 404.
Testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business. In addition, our auditors are required to issue an attestation report on the effectiveness of our internal controls pursuant to Section 404(b) of the Sarbanes Oxley Act.
Our future borrowings will require interest payments 34 Table of Contents and will need to be repaid or refinanced, which could require us to divert funds identified for other purposes to debt service and could create additional cash demands or impair our liquidity position and add financial risk.
Our future borrowings will require interest payments and will need to be repaid or refinanced, which could require us to divert funds identified for other purposes to debt service and could create additional cash demands or impair our liquidity position and add financial risk. We may also sell additional debt or equity securities to help repay or refinance our borrowings.
Compliance with U.S. federal, state, and local laws and regulations, and new laws or changes in these laws, or regulations that impose additional requirements, can be costly (some or all of which costs may not be covered by insurance) and require significant resources and attention from our senior management.
The imposition by the government of new or additional tariffs or trade barriers could harm our business and results of operations. 30 Table of Contents Compliance with U.S. federal, state, and local laws, regulations, and orders, and new laws, regulations or orders, or changes in these laws, regulations, or orders, or laws, regulations, and orders that impose additional requirements, can be costly (some or all of which costs may not be covered by insurance) and require significant resources and attention from our senior management.
Furthermore, new or heightened restrictions resulting from a pandemic or epidemic or supply chain disruptions in such countries may cause us to face shortages of one or more ingredients. We have chosen to enter into contracts for some but not all of our ingredients. In addition, we generally do not have long-term supply pricing agreements with our ingredient suppliers.
Furthermore, new or heightened restrictions resulting from a pandemic or epidemic or supply chain disruptions in countries from which we import products may cause us to face shortages of one or more ingredients. We have chosen to enter into contracts for some but not all of our ingredients.
Our license requirements include those relating to the preparation and sale of food and beverages as well as food safety requirements. In addition, the development and operation of our restaurants depends to a significant extent on the selection and acquisition of suitable locations, which are subject to zoning, land use, environmental, and other regulations and requirements.
In addition, the development and operation of our restaurants depends to a significant extent on the selection and acquisition of suitable locations, which are subject to zoning, land use, environmental, and other regulations and requirements.
In addition, the health and environmental risks of organic fluorine and per- and polyfluoroalkyl substances (“PFAS”) have been the subject of increased regulatory scrutiny and litigation involving us and others in the restaurant industry. See Note 9 (Commitments and Contingencies) included in Part II, Item 8.
In addition, the health and environmental risks of organic fluorine and per- and polyfluoroalkyl substances (“PFAS”) have been the subject of increased regulatory scrutiny and litigation involving us and others in the restaurant industry.
Our competitors will likely grow in number as the Mediterranean food category grows, and we may face the risk that new or existing competitors will mimic our business model, menu offerings, marketing strategies, and overall concept.
Our competitors will likely grow in number as the Mediterranean food category grows, and we may face the risk that new or existing competitors will mimic our business model, menu offerings, marketing strategies, and overall concept. Any of the above competitive factors may materially adversely affect our business, financial condition, and results of operations.
We have also experienced shortages, delays or interruptions in other supplies and materials, such as food packaging, which are required and/or desired to operate our restaurants and/or produce our CPG offerings. Such shortages, delays, or interruptions could adversely affect the availability, quality, and cost of the items we buy, the operations of our restaurants, and our CPG operations.
We have also experienced shortages, delays or interruptions in other supplies and materials, such as food packaging, which are required and/or desired to operate our restaurants and/or produce our CPG offerings.
However, as of March 2, 2023, all Zoes Kitchen locations have either been converted or closed, and we cannot guarantee that we will be able to develop a robust new restaurant pipeline, which would impact our future growth. We may not be able to successfully identify and secure a sufficient number of attractive restaurant locations in new or existing markets.
However, as of March 2, 2023, all Zoes Kitchen locations have either been permanently closed or closed for conversion, and we cannot guarantee that we will be able to develop a robust new restaurant pipeline, which would impact our future growth.
In connection with our procedures and practices related to internal control over financial reporting, we or our independent registered public accounting firm may identify deficiencies in our systems of internal controls, and we may encounter problems or delays in completing the remediation of any such deficiencies identified by us or our independent registered public accounting firm in connection with the issuance of their attestation report.
In the event that they are not satisfied with our design or documentation of or our operations under our internal controls, the auditors may issue a report that is adverse. 36 Table of Contents In connection with our procedures and practices related to internal control over financial reporting, we or our independent registered public accounting firm may identify deficiencies in our systems of internal controls, and we may encounter problems or delays in completing the remediation of any such deficiencies identified by us or our independent registered public accounting firm in connection with the issuance of their attestation report.
Current macroeconomic conditions and events, such as inflation, high interest rates, and uncertainty in the banking industry, may increase the risk of a recession. Guests’ preferences tend to shift to lower-cost alternatives during recessionary periods and other periods in which disposable income is adversely affected.
Current macroeconomic conditions and events, such as inflation, high interest rates, tariffs, a softening labor market and geopolitical tensions, may increase the risk of a recession or may cause consumer sentiment to decline. Guests’ preferences tend to shift to lower-cost alternatives during recessionary periods, other periods in which disposable income is adversely affected, or when consumer sentiment is declining.

… 81 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

7 edited+1 added−0 removed12 unchanged
Biggest changeThe Risk Committee meets on at least a quarterly basis to review enterprise risks, including with respect to cybersecurity, as applicable. Enterprise risks, including cybersecurity risk, are briefed to the Audit Committee on at least a quarterly basis by our Chief Legal Officer in coordination with the Chief Information Officer and Chief Financial Officer, or through general updates.
Biggest changeThe Audit Committee is briefed on enterprise risk, including cybersecurity risk, at least on a quarterly basis by our Chief Legal Officer or a member of their team in coordination with the Chief Information Officer and Chief Financial Officer, or through general updates.
Item 1C. Cybersecurity Risk Management and Strategy We have developed a cybersecurity program that continuously evaluates material risks to our business and applies controls in an attempt to help avoid or mitigate them. Our key cybersecurity risks include, among others: brand and reputational damage, business disruption, regulatory and compliance risk, sensitive data loss, and reliance on third parties.
Item 1C. Cybersecurity Risk Management and Strategy We have developed a cybersecurity program that evaluates material risks to our business and applies controls in an attempt to help avoid or mitigate them. Our key cybersecurity risks include, among others: brand and reputational damage, business disruption, regulatory and compliance risk, sensitive data loss, and reliance on third parties.
We are members of the Retail and Hospitality Information Sharing and Analysis Center, with more than 250 member companies from the retail, hospitality, and travel industries, which enables us to benchmark our cybersecurity risks, identify and adopt industry-standard practices for our cybersecurity program, subscribe to threat intelligence alerts, and contribute to the collective defense of our industries.
We are members of the Retail and Hospitality Information Sharing and Analysis Center, with more than 300 member companies from the retail, hospitality, and travel industries, which enables us to benchmark our cybersecurity risks, identify and adopt industry-standard practices for our cybersecurity program, subscribe to threat intelligence alerts, and contribute to the collective defense of our industries.
Our incident response process is continually enhanced and validated through tabletop exercises and engagements with third-party partners. We engage third parties and auditors to assess our cybersecurity program, including the use of select penetration testing and threat intelligence services, and to assist us in adopting and implementing industry-standard practices to improve our cybersecurity program.
We enhance and validate our incident response process through tabletop exercises and engagements with third-party partners. We engage third parties and auditors to assess our cybersecurity program, including the use of select penetration testing and threat intelligence services, and to assist us in adopting and implementing industry-standard practices to improve our cybersecurity program.
The Audit Committee regularly reports to the full Board of Directors regarding its activities, including those related to cybersecurity. 41 Table of Contents Role of Management We have established a management-level Risk Committee, that is led by the Chief Legal Officer, and also includes the Chief Information Officer and Chief Financial Officer, as well as certain of their respective Team Members.
The Audit Committee regularly reports to the full Board of Directors regarding its activities, including those related to cybersecurity. 40 Table of Contents Role of Management We have established a management-level Risk Committee, that is comprised of the Chief Legal Officer, the Chief Information Officer, and Chief Financial Officer, as well as certain of their respective Team Members.
“Risk Factors,” cybersecurity threats are continually evolving to become more sophisticated and there is a risk that we could experience compromise of our information technology systems and data.
“Risk Factors,” cybersecurity threats continue to evolve to become more sophisticated and there is a risk that we could experience compromise of our information technology systems and data.
While we are subject to continuous cybersecurity threats and attacks like most companies, we are not aware of any current or past cybersecurity incidents that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition. However, as discussed more fully under Item 1A.
While we are subject to cybersecurity threats and attacks like most companies, risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected and are not reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition. However, as discussed more fully under Item 1A.
Added
The Risk Committee meets on at least a quarterly basis to review enterprise risks, including with respect to cybersecurity, as applicable.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed0 unchanged
Biggest changeIn addition, we lease property for our two support centers, which are located in Brooklyn, New York and Plano, Texas; our production facility in Laurel, Maryland; and our food distribution center in Edison, New Jersey. The support centers in Brooklyn, New York and Plano, Texas focus primarily on creative content and restaurant and general support functions, respectively.
Biggest changeIn addition, we lease property for our three additional support centers, which are located in Brooklyn, New York, Manhattan, New York, and Plano, Texas; our production facility in Laurel, Maryland; and our food distribution center in Edison, New Jersey. The additional support centers focus primarily on creative content and restaurant and general support functions.
We do not currently own any real estate, other than our production facility in Verona, Virginia, which commenced operations in February 2024, and we lease all of our restaurant locations. We believe our facilities are adequate and suitable for our current needs, and that suitable additional or alternative space will be available to accommodate our operations when needed.
We do not currently own any real estate, other than our production facility in Verona, Virginia, and we lease all of our restaurant locations. We believe our facilities are adequate and suitable for our current needs, and that suitable additional or alternative space will be available to accommodate our operations when needed.
Item 2. Properties Our restaurant collaboration center is located in Washington, D.C., where we currently lease approximately 21,000 square feet pursuant to a lease agreement that expires in 2035.
Item 2. Properties Our restaurant collaboration center is located in Washington, D.C., where we currently lease approximately 27,000 square feet pursuant to a lease agreement that expires in 2036.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 3. Legal Proceedings For information regarding legal proceedings, see Note 9 (Commitments and Contingencies) in our consolidated financial statements included in Part II, Item 8. “Financial Statements and Supplementary Data.” Item 4. Mine Safety Disclosures Not applicable. 42 Table of Contents Part II
Biggest changeItem 3. Legal Proceedings For information regarding legal proceedings, see Note 10 (Commitments and Contingencies) in our consolidated financial statements included in Part II, Item 8. “Financial Statements and Supplementary Data.” Item 4. Mine Safety Disclosures Not applicable. 41 Table of Contents Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+1 added−2 removed2 unchanged
Biggest changeThe comparisons in the graph below are based on historical data and are not indicative of, nor intended to forecast, future performance of our common stock. 43 Table of Contents June 15, 2023 July 9, 2023 October 1, 2023 December 31, 2023 April 21, 2024 July 14, 2024 October 6, 2024 December 29, 2024 CAVA $ 100.00 $ 88.30 $ 68.26 $ 95.79 $ 132.98 $ 187.76 $ 282.15 $ 254.89 S&P 500 100.00 106.61 103.12 115.17 127.33 132.79 140.60 143.99 S&P Restaurant 500 100.00 104.45 93.99 105.32 107.38 100.54 113.16 110.62 __________________ *$100 invested on June 15, 2023 in CAVA Group, Inc. stock or May 31, 2023 in indices, including reinvestment of dividends.
Biggest changeThe comparisons in the graph below are based on historical data and are not indicative of, nor intended to forecast, future performance of our common stock. 42 Table of Contents June 15, 2023 December 31, 2023 December 29, 2024 December 28, 2025 CAVA $ 100.00 $ 95.79 $ 254.89 $ 134.05 S&P 500 100.00 115.17 143.99 169.74 S&P Restaurant 500 100.00 105.32 110.62 110.29 __________________ *$100 invested on June 15, 2023 in CAVA Group, Inc. stock or May 31, 2023 in indices, including reinvestment of dividends.
Source Data: Research Data Group Inc. The performance graph and related information shall not be deemed “soliciting material,” is not deemed “filed” with the SEC, and is not to be incorporated by reference into any future filing under the Securities Act or Exchange Act. Item 6. Reserved 44 Table of Contents
Source Data: Research Data Group Inc. The performance graph and related information shall not be deemed “soliciting material,” is not deemed “filed” with the SEC, and is not to be incorporated by reference into any future filing under the Securities Act or Exchange Act. Item 6. Reserved 43 Table of Contents
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock trades on the New York Stock Exchange under the symbol “CAVA.” As of February 18, 2025, there were approximately 34 stockholders of record. This does not include persons whose stock is held in nominee or “street name” accounts through brokers.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock trades on the New York Stock Exchange under the symbol “CAVA.” As of February 17, 2026, there were approximately 31 stockholders of record. This does not include persons whose stock is held in nominee or “street name” accounts through brokers.
Dividend Policy No dividends have been declared or paid on our shares of common stock to date, and we do not intend to declare or pay any cash dividends on our common stock for the foreseeable future. We currently intend to continue to retain earnings for the operation and expansion of our business and for working capital needs.
Purchases of Equity Securities by Issuer None. Dividend Policy No dividends have been declared or paid on our shares of common stock to date, and we do not intend to declare or pay any cash dividends on our common stock for the foreseeable future.
Removed
Purchases of Equity Securities by Issuer During the twelve weeks ended December 29, 2024, we made the following purchases of our equity securities that are registered pursuant to Section 12(b) of the Securities Exchange Act of 1934: Period Total Number of Shares Purchased 1 Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs October 7, 2024 to November 3, 2024 13,652 $ 136.05 — — November 4, 2024 to December 1, 2024 35,058 141.38 — — December 2, 2024 to December 29, 2024 — — — — Total 48,710 $ 139.89 — — __________________ 1 Purchases made to satisfy the income tax minimum withholding obligations of certain employees upon the vesting of restricted stock units (“RSUs”) issued under the Company’s 2015 Equity Incentive Plan and 2023 Equity Incentive Plan.
Added
We currently intend to continue to retain earnings for the operation and expansion of our business and for working capital needs.
Removed
These shares were not acquired pursuant to any repurchase plan or program. The average prices listed in the above table are averages of the fair market prices at which we valued shares withheld for purposes of calculating the number of shares to be withheld.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 6. Reserved 45 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 45 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 57 Item 8. Financial Statements and Supplementary Data 59 Index to Consolidated Financial Statements 59 Report of Independent Registered Public Accounting Firm 60
Biggest changeItem 6. Reserved 44 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 44 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 54 Item 8. Financial Statements and Supplementary Data 56 Index to Consolidated Financial Statements 56 Report of Independent Registered Public Accounting Firm 57

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

61 edited+16 added−35 removed41 unchanged
Biggest changeBecause 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. 53 Table of Contents The following table provides a reconciliation of net income to Adjusted EBITDA and net income margin to Adjusted EBITDA margin for the fiscal years indicated: ($ in thousands) 2024 2023 Net income $ 130,319 $ 13,280 Non-GAAP Adjustments Interest income, net (16,474) (8,852) (Benefit from) provision for income taxes (70,409) 768 Depreciation and amortization 60,355 47,433 Equity-based compensation 17,140 9,575 Other income, net (318) (471) Impairment and asset disposal costs 5,055 4,899 Restructuring and other costs 580 6,080 Certain non-recurring public company costs — 1,113 Adjusted EBITDA $ 126,248 $ 73,825 Revenue $ 963,713 $ 728,700 Net income margin 1 13.5 % 1.8 % Adjusted EBITDA margin 13.1 % 10.1 % __________________ 1 Net income margin for fiscal 2024 includes the impact of the $80.1 million benefit from the VA Release.
Biggest changeThe following table provides a reconciliation of net income to Adjusted EBITDA and net income margin to Adjusted EBITDA margin: (in thousands) 2025 2024 Net income $ 63,743 $ 130,319 Non-GAAP Adjustments Interest income, net (15,045) (16,474) Provision for (benefit from) income taxes 7,056 (70,409) Depreciation and amortization 73,661 60,355 Equity-based compensation 18,057 17,140 Other income, net (469) (318) Impairment and asset disposal costs 4,925 5,055 Restructuring and other costs — 580 Executive transition costs 1 832 — Adjusted EBITDA $ 152,760 $ 126,248 Revenue $ 1,179,664 $ 963,713 Net income margin 2 5.4 % 13.5 % Adjusted EBITDA margin 12.9 % 13.1 % __________________ 1 Includes costs associated with the separation of the Company’s Chief Operations Officer. 2 Net income margin for fiscal 2024 includes the impact of the $80.1 million benefit from the VA Release. 51 Table of Contents The following table provides a reconciliation of net income to Adjusted Net Income and net income margin to Adjusted Net Income margin: (in thousands) 2025 2024 Net income $ 63,743 $ 130,319 Non-GAAP Adjustments Tax benefit from VA Release — (80,100) Adjusted Net Income $ 63,743 $ 50,219 Revenue $ 1,179,664 $ 963,713 Net income margin 1 5.4 % 13.5 % Adjusted Net Income margin 5.4 % 5.2 % __________________ 1 Net income margin for fiscal 2024 includes the impact of the $80.1 million benefit from the VA Release.
CAVA Average Unit Volume (CAVA AUV) CAVA AUV represents total revenue of operating CAVA Restaurants that were open for the entire trailing thirteen periods and includes sales from CAVA digital kitchens for such period, divided by the number of operating CAVA Restaurants that were open for the entire trailing thirteen periods.
Average Unit Volume (AUV) AUV represents total revenue of operating CAVA Restaurants that were open for the entire trailing thirteen periods and includes sales from Digital Kitchens for such period, divided by the number of operating CAVA Restaurants that were open for the entire trailing thirteen periods.
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 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, are 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.
CAVA Same Restaurant Sales Growth CAVA Same Restaurant Sales Growth is defined as the period-over-period sales comparison for CAVA restaurants that have been open for 365 days or longer (including converted Zoes Kitchen locations that have been open for 365 days or longer after the completion of the conversion to a CAVA restaurant).
Same Restaurant Sales Same Restaurant Sales is defined as the period-over-period sales comparison for CAVA restaurants that have been open for 365 days or longer (including converted Zoes Kitchen locations that have been open for 365 days or longer after the completion of the conversion to a CAVA restaurant).
We use CAVA AUV to assess and understand changes in guest spending patterns and the overall performance of operating restaurants open for the entire period. CAVA AUV is impacted by changes in guest traffic, menu prices, and product mix.
We use AUV to assess and understand changes in guest spending patterns and the overall performance of operating restaurants open for the entire period. AUV is impacted by changes in Guest Traffic, menu prices, and product mix.
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 does 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.
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; 50 Table of Contents • 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.
“Financial Statements and Supplementary Data,” Note 8 (Leases) for more information on our operating leases. 2 Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on us and that specify all significant terms. We have excluded agreements that are cancellable without penalty.
“Financial Statements and Supplementary Data,” Note 9 (Leases) for more information on our operating leases. 2 Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on us and that specify all significant terms. We have excluded agreements that are cancellable without penalty.
As a result of these factors and the differences among our fiscal quarters, our quarterly operating results and comparable restaurant sales, as well as our key performance measures, may fluctuate significantly from quarter to quarter and our results for any one quarter are not indicative of any other quarter.
As a result of these factors and the differences among our fiscal quarters, our quarterly operating results and Same Restaurant Sales, as well as other key performance measures, may fluctuate significantly from quarter to quarter and our results for any one quarter are not indicative of any other quarter.
We base our estimates on historical experience, known trends and events, as well as management’s judgment. Although management believes the judgment applied in preparing estimates is reasonable 55 Table of Contents based on circumstances and information known at the time, actual results could vary materially from the estimates based on assumptions used in the preparation of our financial statements.
We base our estimates on historical experience, known trends and events, as well as management’s judgment. Although management believes the judgment applied in preparing estimates is reasonable based on circumstances and information known at the time, actual results could vary materially from the estimates based on assumptions used in the preparation of our financial statements.
Digital orders are those made through our catering and digital channels, such as the CAVA app and the CAVA website, and include orders fulfilled through third-party marketplace and native delivery and digital order pick-up. 47 Table of Contents We use CAVA Digital Revenue Mix to evaluate and track the effectiveness of our coordinated digital infrastructure and network of delivery partners.
Digital Orders are those made through our catering and digital channels, such as the CAVA app and the CAVA website, and include orders fulfilled through third-party marketplace and native delivery and Digital Order pick-up. We use Digital Revenue Mix to evaluate and track the effectiveness of our coordinated digital infrastructure and network of delivery partners.
We expect occupancy to increase in the aggregate as we continue to open new restaurants but to decrease as a percentage of revenue in the long-term as we continue to leverage higher CAVA Same Restaurant Sales Growth.
We expect occupancy to increase in the aggregate as we continue to open new restaurants but to decrease as a percentage of revenue in the long-term as we continue to leverage higher Same Restaurant Sales.
The Company uses the Black-Scholes-Merton (“Black-Scholes”) option-pricing model to estimate the fair value of stock options at the grant date. The use of the Black-Scholes option-pricing model requires the use of subjective 56 Table of Contents assumptions, including the expected term, risk-free interest rate, expected volatility, and expected dividend yield of the underlying common stock.
The Company uses the Black-Scholes-Merton (“Black-Scholes”) option-pricing model to estimate the fair value of stock options at the grant date. The use of the Black-Scholes option-pricing model requires the use of subjective assumptions, including the expected term, risk-free interest rate, expected volatility, and expected dividend yield of the underlying common stock.
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” and “Risk Factors” included elsewhere in this Annual Report on Form 10-K. Overview CAVA Group, Inc.
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” and “Risk Factors” included elsewhere in this Annual Report. Overview CAVA Group, Inc.
We gather daily sales data and regularly analyze our guest traffic and the mix of menu items sold to aid in developing menu pricing, food offerings, and promotional strategies designed to grow CAVA AUV.
We gather daily sales data and regularly analyze our Guest Traffic and the mix of menu items sold to aid in developing menu pricing, food offerings, and other strategies designed to grow AUV.
The majority of our purchase obligations related to amounts owed for produce and other ingredients and supplies, including supplies and materials used for new restaurant openings. Credit Facility Refer to Item 8. “Financial Statements and Supplementary Data,” Note 6 (Debt), for a description of our 2022 Credit Facility.
The majority of our purchase obligations relate to amounts owed for produce and other ingredients and supplies, including supplies and materials used for new restaurant openings. Credit Facility Refer to Item 8. “Financial Statements and Supplementary Data,” Note 7 (Debt), for a description of our 2022 Credit Facility.
Item 7. 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 audited consolidated financial statements and the related notes thereto included in Item 8. “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
Item 7. 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 audited consolidated financial statements and the related notes thereto included in Item 8. “Financial Statements and Supplementary Data” of this Annual Report.
Occupancy excludes expenses associated with unopened restaurants, which are recorded in pre-opening costs, expenses associated with closed restaurants, which are recorded in restructuring and other costs, and expenses related to support centers, which are recorded in general and administrative expenses. Occupancy varies from location to location and is impacted by macroeconomic conditions, including inflation.
Occupancy excludes expenses associated with unopened restaurants, which are recorded in pre-opening costs and expenses related to our collaboration and support centers, which are recorded in general and administrative expenses. Occupancy varies from location to location and is impacted by macroeconomic conditions, including inflation.
See Item 8. “Financial Statements and Supplementary Data,” Note 6 (Debt) and Note 8 (Leases) to our consolidated financial statements for more information. Our sources of liquidity could be affected by factors described Part I, Item 1A.
See Item 8. “Financial Statements and Supplementary Data,” Note 7 (Debt) and Note 9 (Leases) to our consolidated financial statements for more information. Our sources of liquidity could be affected by factors described Part I, Item 1A. “Risk Factors”.
Renewal options are typically not included in the lease term as it is not reasonably certain at commencement that we will exercise the options. Restaurant leases provide for fixed minimum rent payments and in some cases include contingent rent payments based upon sales in excess of specified breakpoints. When achievement of sales breakpoints is probable, contingent rent is accrued.
Renewal options are typically not included in the lease term as it is not reasonably certain at commencement that we will exercise the options. Restaurant leases provide for fixed minimum rent payments and in some cases include contingent rent payments based upon sales in excess of 53 Table of Contents specified breakpoints.
Securities and Exchange Commission on February 27, 2024. 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.
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.
In a 53-week fiscal year, the first fiscal quarter contains sixteen weeks, the second and third fiscal quarters each 45 Table of Contents contain twelve weeks, and the fourth fiscal quarter contains thirteen weeks.
In a 53-week fiscal year, the first fiscal quarter contains sixteen weeks, the second and third fiscal quarters each contain twelve weeks, and the fourth fiscal quarter contains thirteen weeks.
“Financial Statements and Supplementary Data,” Note 7 (Income Taxes). Key assumptions utilized within the projections include the Company’s sales, growth rates, gross margins, operating expenses in relation to the current economic conditions and the Company’s future expectations, market competition, inflation, consumer trends, and other relevant economic factors.
“Financial Statements and Supplementary Data,” Note 7 (Income Taxes). For fiscal 2025, the Company continues to maintain this conclusion. Key assumptions utilized within the projections include the Company’s sales, growth rates, gross margins, operating expenses in relation to the current economic conditions and the Company’s future expectations, market competition, inflation, consumer trends, and other relevant economic factors.
The Company is headquartered in Washington, D.C. and, as of December 29, 2024, operates 367 fast-casual CAVA Restaurants in 25 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 is headquartered in Washington, D.C. and, as of December 28, 2025, operates 439 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.
We believe they 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.
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.
Impairment and asset disposal costs consist of losses recognized on the write-down of the carrying value of property and equipment, net and operating lease assets and the loss on disposal of assets.
Pre-opening costs are expensed as incurred. Impairment and asset disposal costs consist of losses recognized on the write-down of the carrying value of property and equipment, net and operating lease assets and the loss on disposal of assets.
For a discussion of the year ended December 31, 2023 compared to December 25, 2022, please refer to the Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of our Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the U.S.
For a discussion of the year ended December 29, 2024 compared to December 31, 2023, please refer to Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of our Annual Report on Form 10-K for the year ended December 29, 2024 as filed with the SEC on February 26, 2025.
Adjusted Net Income margin is Adjusted Net Income as a percentage of revenue. We use 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.
We use 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. See “Non-GAAP Financial Measures” below for a reconciliation of Adjusted Net Income to net income.
“Risk Factors.” 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. 54 Table of Contents Cash Overview We had cash and cash equivalents of $366.1 million and $332.4 million as of December 29, 2024 and December 31, 2023, respectively.
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 $282.9 million and $366.1 million as of December 28, 2025 and December 29, 2024, respectively.
CAVA Revenue CAVA Revenue represents all revenue attributable to CAVA restaurants in the specified period, excluding restaurants operating under licensing agreements. We use CAVA Revenue to evaluate and track the aggregate sales of food and beverages in CAVA restaurants.
Adjusted EBITDA margin and Adjusted Net Income margin are Adjusted EBITDA and Adjusted Net Income as a percentage of revenue, respectively. CAVA Revenue CAVA Revenue represents all revenue attributable to CAVA restaurants in the specified period, excluding restaurants operating under licensing agreements. We use CAVA Revenue to evaluate and track the aggregate sales of food and beverages in CAVA restaurants.
Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments, initial direct costs, lease incentives, and impairment.
We measure the lease liability at lease commencement by discounting the future minimum lease payments. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments, initial direct costs, lease incentives, and impairment.
Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of revenue. We use Adjusted EBITDA and Adjusted EBITDA 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.
We use Adjusted EBITDA and Adjusted EBITDA 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. See “Non-GAAP Financial Measures” below for a reconciliation of Adjusted EBITDA to net income.
Fixed minimum rent payments are recognized on a straight-line basis over the lease term starting on the date we take control of the leased space. Operating lease assets and liabilities are recognized at the lease’s commencement date. We measure the lease liability at lease commencement by discounting the future minimum lease payments.
When achievement of sales breakpoints is probable, contingent rent is accrued. Fixed minimum rent payments are recognized on a straight-line basis over the lease term starting on the date we take control of the leased space. Operating lease assets and liabilities are recognized at the lease’s commencement date.
Adjusted EBITDA and Adjusted EBITDA Margin Adjusted EBITDA is net income adjusted to exclude interest income, net, (benefit from) provision for income taxes, and depreciation and amortization, further adjusted to exclude equity-based compensation, other income, net, impairment and asset disposal costs, restructuring and other costs, and certain non-recurring public company costs.
Adjusted EBITDA and Adjusted EBITDA Margin Adjusted EBITDA is net income adjusted to exclude interest income, net, provision for (benefit from) income taxes, and depreciation and amortization, further adjusted to exclude equity-based compensation, other income, net, impairment and asset disposal costs, restructuring and other costs, and executive transition costs. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of revenue.
For purposes of calculating CAVA AUV for fiscal 2023, the applicable measurement period is the trailing thirteen periods ended December 31, 2023, excluding the 53rd week. 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. 46 Table of Contents Adjusted EBITDA margin and Adjusted Net Income margin are Adjusted EBITDA and Adjusted Net Income as a percentage of revenue, respectively.
For purposes of calculating AUV for fiscal 2024, the applicable measurement period is the trailing thirteen periods ended December 29, 2024. 2 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.
Material Cash Commitments The following table summarizes current and long-term material cash requirements as of December 29, 2024, which we expect to fund primarily with operating cash flows: Payments Due by Fiscal Year (in thousands) Total 2025 2026-2027 2028-2029 Thereafter Operating leases 1 $ 496,144 $ 59,936 $ 128,612 $ 112,777 $ 194,819 Purchase obligations 2 20,780 20,752 28 — — __________________ 1 Refer to Item 8.
Material Cash Commitments The following table summarizes current and long-term material cash requirements as of December 28, 2025, which we expect to fund primarily with operating cash flows: Payments Due by Fiscal Year (in thousands) Total 2026 2027-2028 2029-2030 Thereafter Operating leases 1 $ 624,878 $ 77,297 $ 154,614 $ 137,963 $ 255,004 Purchase obligations 2 22,064 22,064 — — — __________________ 1 Refer to Item 8.
We use CAVA Same Restaurant Sales Growth to assess the performance of existing CAVA restaurants that have been open for 365 days or longer, as the impact of new restaurant openings is excluded. As of December 29, 2024 and December 31, 2023, there were 307 and 236 CAVA restaurants, respectively, in such restaurant base.
We use Same Restaurant Sales to assess the performance of 45 Table of Contents existing CAVA restaurants that have been open for 365 days or longer, as the impact of new restaurant openings is excluded.
We expect general and administrative expenses to increase in the aggregate as we continue to expand our business but to decrease as a percentage of revenue in the long-term.
We expect general and administrative expenses to increase in the aggregate as we continue to expand our business but to decrease as a percentage of revenue in the long-term. Depreciation and amortization primarily consists of depreciation of assets related to CAVA restaurants and our production facilities, including leasehold improvements and equipment, as well as technology improvements.
The remainder of the increase in CAVA Revenue was driven by CAVA Same Restaurant Sales Growth of 13.4%, which consists of 8.7% from guest traffic increases and 4.7% from menu price increases and product mix, partially offset by $10.9 million of revenue in the 53rd week in fiscal 2023.
The remainder of the increase in CAVA Revenue was driven by growth in Same Restaurant Sales of 4.0%, which consists of 2.4% from menu price and product mix and 1.6% from Guest Traffic.
CAVA Occupancy The increase in CAVA occupancy was primarily due to the 130 Net New CAVA Restaurant Openings during or subsequent to fiscal 2023, of which a portion was attributable to the 28 CAVA restaurants that were converted from Zoes Kitchen locations. As a percentage of CAVA Revenue, CAVA occupancy decreased primarily due to operating leverage associated with higher sales.
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 130 Net New CAVA Restaurant Openings during or subsequent to fiscal 2024 and Same Restaurant Sales growth of 4.0%.
Interest income, net includes interest income from our short-term investments, partially offset by cash and non-cash charges related to our 2022 Credit Facility, including the amortization of debt issuance costs. (Benefit from) provision for income taxes represents federal and state current and deferred income tax expense.
Interest income, net includes interest income from investments in fixed income debt securities and money market funds, partially offset by cash and non-cash charges related to our 2022 Credit Facility, including the amortization of debt issuance costs.
Financing Activities The change in net cash (used in) provided by financing activities was primarily due to proceeds from the IPO in the prior year and higher tax withholding obligations arising from the vesting of RSUs in fiscal 2024 compared with the prior year.
“Financial Statements and Supplementary Data,” Note 4 (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.
“Financial Statements and Supplementary Data,” Note 2 (Basis of Presentation and Significant Accounting Policies) for more information. Key Factors Affecting Our Business We have continued to see growth in revenue due to our Net New CAVA Restaurant openings and strong CAVA Same Restaurant Sales Growth. CAVA Restaurant-Level Profit Margin increased to 25.0% in fiscal 2024 from 24.8% in fiscal 2023.
“Financial Statements and Supplementary Data,” Note 13 (Segment Reporting) for more information. Key Factors Affecting Our Business We have continued to see growth in revenue, surpassing $1 billion in revenue in fiscal 2025, due to our Net New CAVA Restaurant openings and Same Restaurant Sales growth.
Pre-opening costs also include occupancy costs recorded during the period between the date of possession and the date we begin operations at a location. Pre-opening costs are expensed as incurred.
Pre-opening costs consist primarily of expenses incurred prior to opening a new restaurant and are made up primarily of manager salaries, payroll and training costs, travel costs, supplies, relocation costs, and recruiting expenses. Pre-opening costs also include occupancy costs recorded during the period between the date of possession and the date we begin operations at a location.
CAVA Restaurants The following table details CAVA Restaurants for the fiscal years indicated: 2024 2023 Beginning of period 309 237 New CAVA Restaurant openings 1 59 73 Permanent closure (1) (1) End of period 367 309 __________________ 1 New CAVA Restaurant openings during fiscal 2023 includes converted Zoes Kitchen locations.
CAVA Restaurants The following table details CAVA Restaurants for the fiscal years indicated: 2025 2024 Beginning of period 367 309 New CAVA Restaurant openings 73 59 Permanent closure (1) (1) End of period 439 367 Digital Revenue Mix Digital Revenue Mix represents the portion of CAVA Revenue related to Digital Orders as a percentage of total CAVA Revenue.
CAVA Food, Beverage, and Packaging The increase in CAVA food, beverage, and packaging was primarily due to a $47.6 million increase from the 130 Net New CAVA Restaurant Openings during or subsequent to fiscal 2023, of which a portion was attributable to the 28 CAVA restaurants that were converted from Zoes Kitchen locations.
CAVA Food, Beverage, and Packaging The increase in CAVA food, beverage, and packaging was primarily due to a $53.8 million increase from the 130 Net New CAVA Restaurant Openings during or subsequent to fiscal 2024. The remainder of the increase was primarily due to Same Restaurant Sales growth of 4.0%.
Depreciation and Amortization The increase in depreciation and amortization was primarily driven by the addition of assets from 130 Net New CAVA Restaurant Openings during or subsequent to fiscal 2023, the commencement of operations at our new manufacturing facility in Verona, Virginia in the first quarter of fiscal 2024, and technology improvements.
As a percentage of revenue, general and administrative expenses decreased primarily due to leverage from higher sales and the net impact of the items noted above. Depreciation and Amortization The increase in depreciation and amortization was primarily driven by the addition of assets from 130 Net New CAVA Restaurant Openings during or subsequent to fiscal 2024 and technology improvements.
For fiscal 2024, our operations were funded from cash flows from operations. Our principal uses of liquidity for fiscal 2024 were to fund new restaurant openings, working capital needs, and the finalization of construction of our new production facility in Verona, Virginia.
In addition, we had investments in fixed income debt securities of $110.1 million as of December 28, 2025. For fiscal 2025, our operations were funded from cash flows from operations. Our principal uses of liquidity for fiscal 2025 were to fund new restaurant openings and working capital needs.
Comparison of Fiscal 2024 and 2023 CAVA Segment Results The following table summarizes the results of the CAVA segment for the fiscal years indicated: 2024 2023 Change ($ in thousands) $ % of Revenue $ % of Revenue $ % Restaurant revenue $ 954,273 100.0 % $ 717,060 100.0 % $ 237,213 33.1 % Restaurant operating expenses (excluding depreciation and amortization): Food, beverage, and packaging 279,741 29.3 208,237 29.0 71,504 34.3 Labor 247,490 25.9 185,820 25.9 61,670 33.2 Occupancy 69,851 7.3 57,811 8.1 12,040 20.8 Other operating expenses 119,078 12.5 87,704 12.2 31,374 35.8 Total restaurant operating expenses 716,160 75.0 539,572 75.2 176,588 32.7 Restaurant-level profit $ 238,113 25.0 % $ 177,488 24.8 % $ 60,625 34.2 % CAVA Revenue The increase in CAVA Revenue was primarily due to a $156.6 million increase from the 130 Net New CAVA Restaurant Openings during or subsequent to fiscal 2023, of which a portion was attributable to the 28 CAVA restaurants that were converted from Zoes Kitchen locations.
CAVA Segment Results The following table summarizes the results of the CAVA segment for the fiscal years indicated: 2025 2024 Change ($ in thousands) $ % of Revenue $ % of Revenue $ % Restaurant revenue $ 1,169,286 100.0 % $ 954,273 100.0 % $ 215,013 22.5 % Restaurant operating expenses (excluding depreciation and amortization): Food, beverage, and packaging 348,684 29.8 279,741 29.3 68,943 24.6 Labor 301,861 25.8 247,490 25.9 54,371 22.0 Occupancy 83,576 7.1 69,851 7.3 13,725 19.6 Other operating expenses 150,121 12.8 119,078 12.5 31,043 26.1 Total restaurant operating expenses 884,242 75.6 716,160 75.0 168,082 23.5 Restaurant-level profit $ 285,044 24.4 % $ 238,113 25.0 % $ 46,931 19.7 % CAVA Revenue The increase in CAVA Revenue was primarily due to a $175.5 million increase from the 130 Net New CAVA Restaurant Openings during or subsequent to fiscal 2024.
The following table sets forth our key performance measures for the fiscal years indicated: ($ in thousands) 2024 2023 Change CAVA Revenue $ 954,273 $ 717,060 $ 237,213 CAVA Same Restaurant Sales Growth 1 13.4 % 17.9 % (4.5) % CAVA AUV 2 $ 2,865 $ 2,639 $ 226 CAVA Restaurant-Level Profit $ 238,113 $ 177,488 $ 60,625 CAVA Restaurant-Level Profit Margin 25.0 % 24.8 % 0.2 % CAVA Restaurants 367 309 58 Net New CAVA Restaurant Openings 58 72 (14) CAVA Digital Revenue Mix 36.4 % 36.0 % 0.4 % Net income $ 130,319 $ 13,280 $ 117,039 Adjusted EBITDA 3 $ 126,248 $ 73,825 $ 52,423 Adjusted Net Income 3 $ 50,219 $ 13,280 $ 36,939 Net income margin 13.5 % 1.8 % 11.7 % Adjusted EBITDA margin 3 13.1 % 10.1 % 3.0 % Adjusted Net Income margin 3 5.2 % 1.8 % 3.4 % __________________ 1 CAVA Same Restaurant Sales Growth for fiscal 2023 is presented excluding the impact of the 53rd week.
The following table sets forth our key performance measures for the fiscal years indicated: ($ in thousands) 2025 2024 Change CAVA Revenue $ 1,169,286 $ 954,273 $ 215,013 Same Restaurant Sales 4.0 % 13.4 % (9.4) % AUV 1 $ 2,934 $ 2,865 $ 69 CAVA Restaurant-Level Profit $ 285,044 $ 238,113 $ 46,931 CAVA Restaurant-Level Profit Margin 24.4 % 25.0 % (0.6) % Net New CAVA Restaurant Openings 72 58 14 Digital Revenue Mix 37.9 % 36.4 % 1.5 % Net income $ 63,743 $ 130,319 $ (66,576) Adjusted EBITDA 2 $ 152,760 $ 126,248 $ 26,512 Adjusted Net Income 2 $ 63,743 $ 50,219 $ 13,524 Net income margin 5.4 % 13.5 % (8.1) % Adjusted EBITDA margin 2 12.9 % 13.1 % (0.2) % Adjusted Net Income margin 2 5.4 % 5.2 % 0.2 % __________________ 1 Presented on a trailing thirteen period basis.
As a percentage of CAVA Revenue, CAVA other operating expenses increased due in part to the aforementioned investments in the integrity of our physical spaces in support of our increased restaurant volumes, partially offset by operating leverage associated with higher sales.
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.
Consolidated Results The following table summarizes our consolidated results of operations for the fiscal years indicated: 2024 2023 Change ($ in thousands) $ % of Revenue $ % of Revenue $ % Revenue $ 963,713 100.0 % $ 728,700 100.0 % $ 235,013 32.3 % Operating expenses: Restaurant operating costs (excluding depreciation and amortization) Food, beverage, and packaging 284,743 29.5 213,458 29.3 71,285 33.4 Labor 247,490 25.7 187,326 25.7 60,164 32.1 Occupancy 69,851 7.2 58,319 8.0 11,532 19.8 Other operating expenses 119,824 12.4 89,251 12.2 30,573 34.3 Total restaurant operating expenses 721,908 74.9 548,354 75.3 173,554 31.6 General and administrative expenses 120,500 12.5 101,491 13.9 19,009 18.7 Depreciation and amortization 60,355 6.3 47,433 6.5 12,922 27.2 Restructuring and other costs 580 0.1 6,080 0.8 (5,500) (90.5) Pre-opening costs 12,197 1.3 15,718 2.2 (3,521) (22.4) Impairment and asset disposal costs 5,055 0.5 4,899 0.7 156 3.2 Total operating expenses 920,595 95.5 723,975 99.4 196,620 27.2 Income from operations 43,118 4.5 4,725 0.6 38,393 N/M Interest income, net (16,474) (1.7) (8,852) (1.2) (7,622) 86.1 Other income, net (318) — (471) (0.1) 153 (32.5) Income before taxes 59,910 6.2 14,048 1.9 45,862 N/M (Benefit from) provision for income taxes (70,409) (7.3) 768 0.1 (71,177) N/M Net income $ 130,319 13.5 % $ 13,280 1.8 % $ 117,039 N/M __________________ N/M data not meaningful Revenue The increase in consolidated revenue was primarily driven by a $237.2 million increase in our CAVA segment, partially offset by a $3.9 million decrease in our Zoes Kitchen segment, which was no longer operating as of March 2, 2023.
Comparison of Fiscal 2025 and 2024 Consolidated Results The following table summarizes our consolidated results of operations for the fiscal years indicated: 2025 2024 Change ($ in thousands) $ % of Revenue $ % of Revenue $ % Revenue $ 1,179,664 100.0 % $ 963,713 100.0 % $ 215,951 22.4 % Operating expenses: Restaurant operating costs (excluding depreciation and amortization) Food, beverage, and packaging 352,778 29.9 284,743 29.5 68,035 23.9 Labor 301,861 25.6 247,490 25.7 54,371 22.0 Occupancy 83,576 7.1 69,851 7.2 13,725 19.6 Other operating expenses 150,982 12.8 119,824 12.4 31,158 26.0 Total restaurant operating expenses 889,197 75.4 721,908 74.9 167,289 23.2 General and administrative expenses 137,462 11.7 120,500 12.5 16,962 14.1 Depreciation and amortization 73,661 6.2 60,355 6.3 13,306 22.0 Restructuring and other costs — — 580 0.1 (580) (100.0) Pre-opening costs 19,134 1.6 12,197 1.3 6,937 56.9 Impairment and asset disposal costs 4,925 0.4 5,055 0.5 (130) (2.6) Total operating expenses 1,124,379 95.3 920,595 95.5 203,784 22.1 Income from operations 55,285 4.7 43,118 4.5 12,167 28.2 Interest income, net (15,045) (1.3) (16,474) (1.7) 1,429 (8.7) Other income, net (469) — (318) — (151) 47.5 Income before taxes 70,799 6.0 59,910 6.2 10,889 18.2 Provision for (benefit from) income taxes 7,056 0.6 (70,409) (7.3) 77,465 (110.0) Net income $ 63,743 5.4 % $ 130,319 13.5 % $ (66,576) (51.1)% 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.
CAVA restaurants generally operate at higher revenue levels than the predecessor Zoes Kitchen locations prior to conversion. Food, beverage, and packaging consists primarily of food, beverage, and packaging costs, including manufacturing costs and costs associated with our production facilities.
Components of Results of Operations Revenue includes sales of food and beverage in our CAVA restaurants and CPG sales. Food, beverage, and packaging consists primarily of food, beverage, and packaging costs, including manufacturing costs and costs associated with our production facilities.
CAVA Labor The increase in CAVA labor was primarily due to the 130 Net New CAVA Restaurant Openings during or subsequent to fiscal 2023, of which a portion was attributable to the 28 CAVA restaurants that were converted from Zoes Kitchen locations.
CAVA Labor The increase in CAVA labor was primarily due to the 130 Net New CAVA Restaurant Openings during or subsequent to fiscal 2024. The remainder of the increase was primarily due to the impact of higher average hourly wages of approximately 2%.
The remainder of the increase was primarily due to CAVA Same Restaurant Sales Growth of 13.4%, partially offset by the impact of a 53rd week in fiscal 2023. 49 Table of Contents As a percentage of CAVA Revenue, CAVA food, beverage, and packaging increased primarily due to input costs associated with the June 3, 2024 launch of grilled steak.
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 limited-time only chicken shawarma offering in the third and fourth quarters of fiscal 2025.
Had this shift not been made, CAVA Same Restaurant Sales Growth would have been immaterially impacted in fiscal 2024. 2 For purposes of calculating CAVA AUV for fiscal 2024, the applicable measurement period is the trailing thirteen periods ended December 29, 2024 .
For purposes of calculating AUV for fiscal 2025, the applicable measurement period is the trailing thirteen periods ended December 28, 2025.
Zoes Kitchen Segment Results The following table summarizes the results of the Zoes Kitchen segment for the fiscal years indicated: 2024 2023 Change ($ in thousands) $ % of Revenue $ % of Revenue $ % Restaurant revenue $ — — % $ 3,867 100.0 % $ (3,867) N/M Restaurant operating expenses (excluding depreciation and amortization): Food, beverage, and packaging — — 1,141 29.5 (1,141) N/M Labor — — 1,506 38.9 (1,506) N/M Occupancy — — 508 13.1 (508) N/M Other operating expenses — — 889 23.0 (889) N/M Total restaurant operating expenses — — 4,044 104.6 (4,044) N/M Restaurant-level loss $ — — % $ (177) (4.6) % $ 177 N/M __________________ N/M data not meaningful As of March 2, 2023, the Company no longer operates any Zoes Kitchen locations, which resulted in the decreases above. 50 Table of Contents Other Results The following table summarizes remaining activity related to our CPG operations for the fiscal years indicated: 2024 2023 Change ($ in thousands) $ % of Revenue $ % of Revenue $ % Revenue $ 9,440 100.0 % $ 7,773 100.0 % $ 1,667 21.4 % Food, beverage, and packaging 5,002 53.0 4,080 52.5 922 22.6 Other operating expenses 746 7.9 658 8.5 88 13.4 The increases noted above were primarily a result of increased sales of dips, spreads, and dressings.
Other Results The following table summarizes remaining activity primarily related to our CPG operations for the fiscal years indicated: 2025 2024 Change ($ in thousands) $ % of Revenue $ % of Revenue $ % Revenue $ 10,378 100.0 % $ 9,440 100.0 % $ 938 9.9 % Food, beverage, and packaging 4,094 39.4 5,002 53.0 (908) (18.2) Other operating expenses 861 8.3 746 7.9 115 15.4 The increases noted above were primarily a result of increased CPG sales.
As a percentage of CAVA Revenue, CAVA labor was flat due to the aforementioned incremental wage investments, which include the impact of Assembly Bill 1228 in California (which we did not offset with an increase to menu prices), offset by the impact of higher sales.
As a percentage of CAVA Revenue, CAVA labor decreased due to the impact of higher sales, partially offset by the aforementioned incremental wage investments. 49 Table of Contents CAVA Occupancy The increase in CAVA occupancy was primarily due to the 130 Net New CAVA Restaurant Openings during or subsequent to fiscal 2024.
General and Administrative Expenses The increase in general and administrative expenses was primarily due to investments to support future growth, higher equity-based compensation associated with awards made in connection with the IPO, and recurring public company costs, partially offset by $1.1 million in certain non-recurring public company costs in the prior year.
Refer to “CAVA Segment Results” below 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, and executive transition costs, partially offset by lower performance-based incentive compensation.
Our expected primary uses on a short- and long-term basis are for the expansion of our restaurant base, working capital, and other capital expenditures. Our rapid expansion has been significantly aided by the Zoes Kitchen acquisition, which enabled us to expand our CAVA restaurant base in a capital-efficient manner.
Liquidity and Capital Resources We assess our liquidity in terms of our ability to generate adequate amounts of cash to meet current and future needs. Our expected primary uses on a short- and long-term basis are for the expansion of our restaurant base, working capital, and other capital expenditures including investments in technology and the expansion of our manufacturing capabilities.
Excluding the net benefit of the release of the valuation allowance of $80.1 million (which includes $3.6 million of income tax expense associated with the recognition of a deferred tax liability related to the federal tax impact of state deferred tax assets), the effective tax rate in fiscal 2024 would have been 16.2%, which reflects the permanent benefit associated with the vesting of RSUs and exercise of stock options above grant date fair values. 52 Table of Contents Net Income Our net income increased as a result of the factors described above.
Provision For (Benefit From) Income Taxes The effective income tax rate for fiscal 2025 was 10.0%, which includes the permanent benefit associated with the vesting of restricted stock units (“RSUs”) and exercise of stock options above grant date fair values. The effective tax rate for fiscal 2024 was not meaningful due to the impact of the valuation allowance.
Results of Operation s Our results of operations, on a consolidated basis and by segment, for fiscal 2024 and 2023 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.
Provision for (benefit from) income taxes represents federal and state current and deferred income tax expense. 47 Table of Contents Results of Operation s Our results of operations, on a consolidated basis and by segment, for fiscal 2025 and 2024 are set forth below.
Removed
Our dips, spreads, and dressings are centrally produced for use in our restaurants and to be sold in grocery stores. Segments We have two reportable segments: CAVA and Zoes Kitchen. CAVA reflects the financial results of all CAVA restaurants we operate. Zoes Kitchen reflects the financial results of all Zoes Kitchen locations we previously operated.
Added
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 operating segments: CAVA and CAVA Foods. CAVA includes the operations of all company-owned CAVA restaurants.
Removed
As of March 2, 2023, we no longer operate any Zoes Kitchen locations. Our CPG operations are included in Other. See Item 8. “Financial Statements and Supplementary Data,” Note 13 (Segment Reporting) for more information.
Added
CAVA Foods includes the production of dips, spreads, and certain dressing bases used in CAVA restaurants as well as sales from the Company’s CPG business. These segments were determined on the same basis that the Company’s Chief Executive Officer (“CEO”), who is the chief operating decision maker (“CODM”), manages, evaluates, and makes key decisions regarding the business.
Removed
Initial Public Offering On June 20, 2023, we completed an initial public offering (the “IPO”) of 16.6 million shares of common stock at a price of $22.00 per share, which included 2.2 million shares sold to the underwriters pursuant to their option to purchase additional shares.
Added
The CODM does not manage the Company on a consolidated basis. CAVA Foods is below quantitative thresholds for segment reporting purposes, resulting in CAVA being the Company’s one reportable segment for the periods covered by the consolidated financial statements. The Company’s CPG operations are included in Other. See Item 8.
Removed
After underwriting discounts and commissions of $22.8 million and offering expenses of $6.5 million, we received net proceeds from the offering of $336.1 million. In connection with the IPO, 95.2 million outstanding shares of preferred stock were converted into an equivalent number of shares of common stock. See Item 8.
Added
In fiscal 2025, we opened 72 Net New CAVA Restaurants, entering new markets such as Indianapolis, South Florida, Pittsburgh, and Detroit. Our 2025 Net New CAVA Restaurants are trending above $3.0 million in AUV demonstrating strong new restaurant productivity and the portability of the brand across the country.
Removed
The increase in CAVA Restaurant-Level Profit Margin was primarily driven by sales leverage, partially offset by higher input costs associated with the June 3, 2024 launch of grilled steak and investments in the integrity of our physical spaces in support of our increased restaurant volumes.
Added
CAVA Restaurant-Level Profit Margin remained strong, while making investments in the business to support culinary innovation, Team Member wages, and menu pricing below inflation.
Removed
In fiscal 2024, we achieved our stated target of at least 15% new unit growth with 58 Net New CAVA Restaurants. Additionally, we had success with the introduction of our new grilled steak main which surpassed our expectations, as well as the nationwide launch of our reimagined loyalty program, which has been well received.
Added
Fiscal year 2025 and fiscal year 2024 were 52-week periods that ended on December 28, 2025 and December 29, 2024, respectively. 44 Table of Contents Historically, seasonal factors have caused our revenue to fluctuate from quarter to quarter.
Removed
Fiscal year 2024 was a 52-week period that ended on December 29, 2024 and fiscal year 2023 was a 53-week period that ended on December 31, 2023. Fiscal 2023 included a 53rd week that is not included in fiscal 2024. We estimate the 53rd week contributed $10.9 million to revenue and approximately $2.5 million to income from operations.
Added
Adjusted Net Income and Adjusted Net Income Margin 46 Table of Contents Adjusted Net Income is net income adjusted to exclude the net benefit from the VA Release. Adjusted Net Income margin is Adjusted Net Income as a percentage of revenue.
Removed
Fiscal 2023 results for CAVA Same-Restaurant Sales Growth and CAVA AUV have been adjusted to exclude the 53rd week for comparability. See the subsections under “Key Performance Measures” for more information. Historically, seasonal factors have caused our revenue to fluctuate from quarter to quarter.
Added
Pre-opening Costs The increase in pre-opening costs was due to a higher volume of new CAVA restaurants under construction and higher costs on a per unit basis. 48 Table of Contents Interest Income, Net The decrease in interest income, net, was due to lower interest rates on investments in fixed income debt securities and money market funds in the current year, partially offset by higher balances in these investments.
Removed
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.
Added
The benefit from income taxes in fiscal 2024 was primarily driven by the VA Release. Excluding the net benefit of the VA Release of $80.1 million, the effective tax rate in fiscal 2024 would have been 16.2%.
Removed
CAVA AUV may also be impacted by the number of newer CAVA restaurants that are included in calculating CAVA AUV, as such restaurants typically achieve lower sales when they first open, which then increase as they mature.

… 32 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+3 added−1 removed7 unchanged
Biggest changeIn addition, there can be no assurance that we will generate CAVA Same Restaurant Sales Growth in an amount sufficient to offset inflationary or other cost pressures. A portion of the leases for our restaurants provide for contingent rent obligations based on a percentage of sales.
Biggest changeIn addition, there can be no assurance that we will generate Same Restaurant Sales in an amount sufficient to offset inflationary or other cost pressures. Interest Rate Risk We are exposed to interest rate risk through fluctuations of interest rates. Changes in interest rates affect the interest income we earn, and therefore impact our cash flows and results of operations.
While we generally seek to offset any wage increases with operational efficiencies and by leveraging CAVA Same Restaurant Sales Growth, such measures may not fully offset any wage increases and we may seek to increase our menu prices. We cannot assure you that we will be able to fully offset wage increases through any of these measures.
While we generally seek to offset any wage increases with operational efficiencies and by leveraging Same Restaurant Sales, such measures may not fully offset any wage increases and we may seek to increase our menu prices. We cannot assure you that we will be able to fully offset wage increases through any of these measures.
We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure. Due to the short-term nature of our investments, we have not been exposed to, nor do we anticipate being exposed to, material 57 Table of Contents risks due to changes in interest rates.
We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure. Due to the short-term nature of our investments, we have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates.
A hypothetical decrease of 100 basis points to current prevailing market rates applied to our cash and cash equivalents balance as of December 29, 2024, would result in a decrease of $3.6 million in investment income over a twelve month period. 58 Table of Contents
A hypothetical decrease of 100 basis points to current prevailing market rates applied to our cash and cash equivalents and investments balances as of December 28, 2025, would result in a decrease of $3.9 million in investment income over a twelve month period.
We currently have operations only in the United States and do not have material foreign currency exposure. Commodity and Food Price Risks We purchase certain products that are affected by commodity prices and are, therefore, subject to price volatility caused by market conditions, supply chain interruptions, weather, the impact of tariffs, and other factors which are not within our control.
Commodity and Food Price Risks We purchase certain products that are affected by commodity prices and are, therefore, subject to price volatility caused by market conditions, supply chain interruptions, weather, the impact of tariffs, and other factors which are not 54 Table of Contents within our control.
Changes in interest rates affect the interest income we earn, and therefore impact our cash flows and results of operations. As of December 29, 2024, we had $366.1 million of cash and cash equivalents consisting of bank accounts, money market funds, and other cash equivalent investments.
As of December 28, 2025, we had $282.9 million of cash and cash equivalents consisting of bank accounts, money market funds, and other cash equivalent investments and $110.1 million of investments in fixed income debt securities.
Removed
As a result, any menu price increases at our restaurants would only offset a proportionate increase in occupancy and related expenses. Interest Rate Risk We are exposed to interest rate risk through fluctuations of interest rates on our investments through our cash in our money market accounts.
Added
We currently have operations only in the United States and do not have material foreign currency exposure.
Added
Further, we are exposed to interest rate risk because interest on borrowings under our 2022 Credit Facility bear interest based on a variable rate. At December 28, 2025, we had no borrowings outstanding under our 2022 Credit Facility.
Added
Assuming our 2022 Credit Facility were to be fully drawn, a 100 basis point increase to the applicable variable rate of interest would increase our interest expense by approximately $0.7 million. 55 Table of Contents

Other CAVA 10-K year-over-year comparisons