Cava Group, Inc.: Form 10-Q for the period ended Apr 19, 2026

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim condensed consolidated financial statements and the related notes included elsewhere in this Form 10-Q and our Annual Report on Form 10-K for the year ended December 28, 2025 (our “2025 Annual Report”). In addition to historical information, this discussion and analysis contains forward-looking statements based on current expectations that involve risks, uncertainties, and other factors outside the Company’s control, as well as assumptions, such as our plans, objectives, expectations, and intentions. Our actual results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors, including those described under the sections entitled “Cautionary Statement Concerning Forward-Looking Statements” above and “Risk Factors” in our 2025 Annual Report.

Overview

CAVA Group, Inc. (together with its wholly owned subsidiaries, referred to as the “Company,” “CAVA,” “we,” “us,” and “our” unless specified otherwise) was formed as a Delaware corporation in 2015, and prior to that, the first CAVA restaurant opened in 2011 in Bethesda, Maryland. The Company is headquartered in Washington, D.C. and, as of April 19, 2026, the Company operates 459 fast-casual CAVA Restaurants in 29 states and Washington, D.C. The Company’s authentic Mediterranean cuisine unites taste and health, with a menu that features chef-curated and customizable bowls and pitas. The Company centrally produces dips, spreads, and certain dressing bases for use in its restaurants while also selling its dips, spreads, and prepared dressings in grocery stores.

Segments

The Company’s operations are conducted as two operating segments: CAVA and CAVA Foods. CAVA includes the operations of all company-owned CAVA restaurants. CAVA Foods includes the production of dips, spreads, and certain dressing bases used in CAVA restaurants as well as sales from the Company’s CPG business. These segments were determined on the same basis that the Company’s CEO, who is the CODM, manages, evaluates, and makes key decisions regarding the business. 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. The Company’s CPG operations are included in Other non-reportable segment. See Item 1. “Financial Statements,” Note 12 (Segment Reporting) for more information.

Key Performance Measures

In assessing the performance of our business, in addition to considering a variety of measures in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), our management team also considers a variety of other key performance measures, including non-GAAP measures. The key performance measures used by our management for determining how our business is performing are detailed in the table below.

We believe that these key performance measures provide useful information to users of our financial statements in understanding and evaluating our results of operations in the same manner as our management team. The presentation of these key performance measures, including Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP financial measures, is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. See “Non-GAAP Financial Measures” below.

The following table sets forth our key performance measures:

($ in thousands)

1 See “Non-GAAP Financial Measures” below for a discussion of Adjusted EBITDA and Adjusted EBITDA margin and a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure. Adjusted EBITDA margin is Adjusted EBITDA as a percentage of revenue.

CAVA Restaurants and Net New CAVA Restaurant Openings

The following table details CAVA Restaurant unit data:

Results of Operations

Our results of operations, on a consolidated basis and by segment, for the sixteen weeks ended April 19, 2026 and April 20, 2025, are set forth below.

Comparison of the sixteen weeks ended April 19, 2026 and April 20, 2025

Consolidated Results

The following table summarizes our consolidated results of operations:

(in thousands)

16

N/M data not meaningful

Revenue, Food, beverage, and packaging, Labor, Occupancy, and Other operating expenses:

The increases in Revenue, Food, beverage, and packaging, Labor, Occupancy, and Other operating expenses are primarily driven by the growth of our CAVA Segment. Refer to “CAVA Segment Results” below for more information.

General and administrative expenses:

The increase in general and administrative expenses was primarily due to investments to support future growth, higher performance-based incentive compensation, and higher equity-based compensation. As a percentage of revenue, general and administrative expenses decreased primarily due to leverage from higher sales, partially offset by the impact of the items noted above.

Depreciation and amortization:

The increase in depreciation and amortization was primarily driven by the addition of assets from the 92 Net New CAVA Restaurant Openings during or subsequent to the sixteen weeks ended April 20, 2025 and technology improvements.

Pre-opening costs:

The increase in pre-opening costs was due to a higher volume of new CAVA restaurants under construction.

Impairment and asset disposal costs:

The increase in impairment and asset disposal costs was primarily due to impairment charges related to certain operating lease assets and property and equipment, net.

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.

Other income, net:

The increase in other income, net, was primarily due to the fair value change recognized on a convertible promissory note described in Item 1, Financial Statements, Note 3 (Investments).

Provision for (benefit from) income taxes:

The effective income tax rate for the sixteen weeks ended April 19, 2026 and April 20, 2025 was 21.5% and (26.3)%, which include the impact of a $2.2 million and $10.7 million reduction to income tax expense associated with equity-based compensation, respectively.

CAVA Segment Results

The following table summarizes the results of the CAVA segment:

(in thousands)

CAVA Revenue:

The increase in CAVA Revenue was primarily due to a $73.7 million increase from the 92 Net New CAVA Restaurant Openings during or subsequent to the sixteen weeks ended April 20, 2025. In addition, the increase in CAVA Revenue was driven by Same Restaurant Sales of 9.7%, which consisted of a 6.8% increase from Guest Traffic and a 2.9% increase from menu price and product mix.

CAVA food, beverage, and packaging:

The increase in CAVA food, beverage, and packaging was primarily due to a $22.1 million increase from the 92 Net New CAVA Restaurant Openings during or subsequent to the sixteen weeks ended April 20, 2025. The remainder of the increase was primarily due to Same Restaurant Sales of 9.7%. As a percentage of CAVA Revenue, CAVA food, beverage, and packaging decreased primarily due to improved mix.

CAVA labor:

The increase in CAVA labor was primarily due to the 92 Net New CAVA Restaurant Openings during or subsequent to the sixteen weeks ended April 20, 2025 and higher average hourly wages of 2%, including the expansion of our Assistant General Manager role. As a percentage of CAVA Revenue, CAVA labor remained flat due to the impact of higher sales, offset by the aforementioned incremental wage investments.

CAVA occupancy:

The increase in CAVA occupancy was primarily due to the 92 Net New CAVA Restaurant Openings during or subsequent to the sixteen weeks ended April 20, 2025. 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 92 Net New CAVA Restaurant Openings during or subsequent to the sixteen weeks ended April 20, 2025 and Same Restaurant Sales of 9.7%. As a percentage of CAVA Revenue, CAVA other operating expenses increased due to a higher mix of third-party delivery and other individually insignificant items, partially offset by operating leverage associated with higher sales.

Other Results

The following table summarizes remaining activity related to CPG operations and the production of dips, spreads, and certain dressing bases used in CAVA restaurants:

(in thousands)

The increase in revenue noted above was primarily due to higher CPG sales. As a percentage of revenue, food, beverage, and packaging decreased due to lower raw material input costs.

Non-GAAP Financial Measures

In addition to our consolidated financial statements, which are prepared in accordance with GAAP, we present Adjusted EBITDA and Adjusted EBITDA margin as supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP. We believe these non-GAAP financial measures assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our operating performance. Management believes Adjusted EBITDA and Adjusted EBITDA margin are useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate, and capital investments. Management uses Adjusted EBITDA 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. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone provide.

Adjusted EBITDA and Adjusted EBITDA margin are not recognized terms under GAAP and should not be considered as alternatives to net income or net income margin as measures of financial performance, or cash provided by operating activities as measures of liquidity, or any other performance measure derived in accordance with GAAP. Additionally, these measures are not intended to be measures of cash flow available for management’s discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments, and debt service requirements. Because not all companies use identical calculations, the presentation of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company.

Adjusted EBITDA and Adjusted EBITDA margin measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Some of these limitations are:

• Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
• Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
• Adjusted EBITDA 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 and Adjusted EBITDA margin differently than we do, limiting their usefulness as comparative measures.

Because of these limitations, Adjusted EBITDA and Adjusted EBITDA margin should not be considered as measures of discretionary cash available to invest in business growth or to reduce any applicable indebtedness.

The following table provides a reconciliation of net income to Adjusted EBITDA and net income margin to Adjusted EBITDA margin:

(in thousands)

Liquidity and Capital Resources

We assess our liquidity in terms of our ability to generate adequate amounts of cash to meet our current and expected future operating needs. Our expected primary uses of cash on a short- and long-term basis are for the expansion of our restaurant base, working capital, and other capital expenditures.

We believe that cash provided by operating activities and existing cash on hand, together with amounts available under our Credit Facility, will be sufficient to satisfy our anticipated cash requirements for the next twelve months and foreseeable future, including our expected capital expenditures for expansion of our CAVA restaurant base, operating lease obligations, and working capital requirements. Our sources of liquidity could be affected by general macroeconomic conditions, as well as tariff policy and geopolitical tensions between the United States and foreign countries, as well as the factors described under the section entitled “Risk Factors” in our 2025 Annual Report. Depending on the severity and direct impact of these factors on us, we may not be able to secure additional financing on acceptable terms, or at all.

Cash Overview

We had cash and cash equivalents of $295.8 million and $282.9 million as of April 19, 2026 and December 28, 2025, respectively. In addition, we had investments in fixed income debt securities of $107.2 million and $110.1 million as of April 19, 2026 and December 28, 2025, respectively. For the sixteen weeks ended April 19, 2026, our operations were funded from cash flows from operations.

Cash Flows

The following table summarizes our cash flows:

(in thousands)

20

Operating Activities:

The increase in net cash provided by operating activities was primarily due to improved operating performance and favorable working capital changes primarily associated with higher performance-based incentive compensation.

Investing Activities:

The decrease in net cash used in investing activities was primarily due to launching an investment portfolio of fixed income debt securities in the first quarter of fiscal 2025 to optimize returns on our cash balance, partially offset by higher capital expenditures related to future new CAVA restaurant openings and an investment in a convertible promissory note described in Item 1, Financial Statements, Note 3 (Investments).

Financing Activities:

The change in net cash (used in) provided by financing activities was primarily due to fees associated with the refinancing of our credit agreement and a decrease in proceeds from shares acquired under equity plans in the sixteen weeks ended April 19, 2026 compared with the prior year period.

Material Cash Commitments

There have been no significant changes to the material cash commitments as disclosed in our 2025 Annual Report, other than those payments made in the ordinary course of business.

Credit Facility

Refer to Item 1, Financial Statements, Note 6 (Debt), for a description of our Credit Facility.

Critical Accounting Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information available as of the date of the consolidated financial statements; therefore, actual results could differ from those estimates. We had no significant changes to our critical accounting estimates as described in our 2025 Annual Report.

Recent Accounting Pronouncements

Refer to Item 1, Financial Statements, Note 1 (Nature of Operations and Basis of Presentation).

In the normal course of business, we are exposed to market risks, including commodity and food price risks, labor costs, effects of inflation, and interest rate risk. There have been no material changes to our exposure to market risks as described in our 2025 Annual Report.

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of such date. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Changes in Internal Control Over Financial Reporting

There were no changes to our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended April 19, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.