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    CAVA
    Earnings call· Dec 2025(Q4 FY25)

    CAVA GROUP Q4 FY25 earnings call CAVA

    Feb 24, 2026 Source

    Executive summary

    CAVA Q4 FY25 — Strong Growth, Margin Expansion, and Strategic Investments

    CAVA Group delivered a strong Q4 and full-year FY25, marked by significant revenue growth and record new restaurant openings, reinforcing its leadership in the Mediterranean category. The company continues to invest strategically in operational infrastructure, technology, and team member development, including a new COO and enhanced field leadership model, to support its ambitious long-term growth target of 1,000 restaurants by 2032. Despite some cost pressures and macro uncertainties, CAVA maintains a focus on value for guests and operational excellence, with positive early Q1 FY26 sales trends.

    Highlights

    5

    • CAVA revenue increased 21.2% in Q4 FY25 to $272.8 million, and 22.5% for the full year FY25, surpassing $1 billion.

    • Adjusted EBITDA for Q4 FY25 was $25.8 million, and $152.8 million for the full year, a 21% increase over FY24.

    • Restaurant-level profit margin was 21.4% in Q4 FY25, and full-year free cash flow was $26.1 million.

    • Opened 24 net new restaurants in Q4, totaling 72 for FY25, ending with 439 locations, a 19.6% increase YoY.

    • New restaurant productivity remained above 100% with 2025 NRO AUVs trending above $3 million.

    Concerns

    4

    • Food, beverage, and packaging costs increased 50 basis points YoY in Q4 FY25 to 30.4% of revenue, reflecting tariffs and a limited-time Chicken Shawarma offering.

    • Other operating expenses increased 60 basis points YoY in Q4 FY25 to 13.4% of revenue due to a higher mix of third-party delivery and ongoing technology costs.

    • Preopening expenses increased $1.9 million YoY in Q4 FY25 to $4.6 million due to a higher number of units under construction and increased per-unit costs.

    • Salmon launch expected to be a margin rate headwind of approximately 100 basis points starting Q2 FY26, though pricing aims for penny profit neutrality.

    Guidance & targets

    12
    CategoryTargetConfidence
    Net New CAVA Restaurant Openings
    74 to 76
    high materiality
    High
    CAVA Same-Restaurant Sales Growth
    3% to 5%
    high materiality
    Medium
    CAVA Restaurant-Level Profit Margin
    23.7% to 24.2%
    high materiality
    Medium
    Preopening Expenses
    $19.5 million to $20 million
    medium materiality
    High
    Adjusted EBITDA
    $176 million to $184 million
    high materiality
    Medium
    Stock-Based Compensation Expense
    $22 million to $24 million
    medium materiality
    High
    Effective Tax Rate
    25% to 30%
    medium materiality
    High
    In-Restaurant Menu Price Adjustment
    approximate 1.4%
    medium materiality
    High
    Food, Beverage & Packaging Inflation
    low single-digit
    medium materiality
    Medium
    Labor Inflation
    low to mid-single-digit
    medium materiality
    Medium
    General and Administrative Expenses as % of Revenue
    remain relatively flat year-over-year
    medium materiality
    Medium
    Total Restaurant Count
    at least 1,000 restaurants
    high materiality
    High

    Operational metrics

    29
    CAVA Revenue Growth
    21.2%YoY
    Q4 FY25

    Increase in CAVA revenue for the fourth quarter.

    CAVA Revenue Growth
    22.5%YoY
    FY25

    Increase in CAVA revenue for the full fiscal year.

    CAVA Revenue Growth
    55.5%2-year stack
    Q4 FY25

    Two-year growth in CAVA revenue.

    CAVA Revenue Growth
    63.1%2-year stack
    FY25

    Two-year growth in CAVA revenue for the full fiscal year.

    Restaurant-Level Profit
    $58.3 millionvs $50.4 million in Q4 FY24
    Q4 FY25

    CAVA restaurant-level profit for the fourth quarter.

    Restaurant-Level Profit Margin
    21.4%
    Q4 FY25

    Restaurant-level profit margin for the fourth quarter.

    Adjusted EBITDA
    $25.8 million2.6% increase vs Q4 FY24
    Q4 FY25

    Adjusted EBITDA for the fourth quarter, driven by new restaurant strength, partially offset by growth investments.

    Adjusted EBITDA
    $152.8 million21% increase over FY24
    FY25

    Adjusted EBITDA for the full fiscal year.

    Food, Beverage & Packaging Costs as % of Revenue
    30.4%50 bps increase from Q4 FY24
    Q4 FY25

    Increase reflects tariffs and the limited-time Chicken Shawarma offering.

    Labor and Related Costs as % of Revenue
    27.1%20 bps decrease from Q4 FY24
    Q4 FY25

    Decrease reflects sales leverage, partially offset by wage investments.

    Occupancy and Related Expenses as % of Revenue
    7.6%flat with Q4 FY24
    Q4 FY25

    Occupancy costs remained stable as a percentage of revenue.

    Other Operating Expenses as % of Revenue
    13.4%60 bps increase from Q4 FY24
    Q4 FY25

    Increase due to third-party delivery mix and KDS technology costs.

    General and Administrative Expenses ex-Stock-Based Comp as % of Revenue
    10.5%vs 10.4% in Q4 FY24
    Q4 FY25

    Slight increase primarily due to growth investments.

    Preopening Expenses
    $4.6 millionvs $2.7 million in Q4 FY24
    Q4 FY25

    Increase reflects accelerated new unit development.

    Equity-Based Compensation
    $18.1 million
    FY25

    Total equity-based compensation for the full fiscal year.

    Adjusted Net Income Growth
    26.9%YoY
    FY25

    Growth in adjusted net income for the full fiscal year.

    Adjusted Diluted EPS
    $0.42prior year
    FY25

    Adjusted diluted EPS for the full fiscal year.

    Cash and Investments Balance
    $393 million
    Q4 FY25

    Liquidity position at the end of the quarter.

    Undrawn Revolver Capacity
    $75 million
    Q4 FY25

    Access to additional liquidity, with plans to increase size and extend maturity in Q1 FY26.

    New Restaurant Productivity
    above 100%
    FY25

    Productivity of new restaurants opened in FY25.

    New Restaurant Average Unit Volumes
    above $3 million
    FY25

    Average Unit Volumes for the 2025 cohort of new restaurants.

    Total Restaurant Count
    43919.6% increase YoY
    FY25

    Total number of CAVA restaurants at the end of the fiscal year.

    Net New Restaurants Opened
    24
    Q4 FY25

    Number of net new restaurants opened in the fourth quarter.

    Net New Restaurants Opened
    72
    FY25

    Number of net new restaurants opened for the full fiscal year.

    Kitchen Display System (KDS) Rollout
    37080% of base
    FY25

    KDS system live in 370 locations by end of FY25, with remaining retrofits to be completed in FY26.

    Assistant General Manager (AGM) Roles Filled
    60%
    current

    Progress on filling AGM roles, which are designed to build a deeper bench of leaders.

    Brand Awareness
    62%vs 55% a year ago
    current

    Significant increase in brand awareness over the past year, attributed to new restaurant openings and optimized media investments.

    Loyalty Program Sales Contribution
    1/3
    current

    Proportion of overall sales driven through the loyalty program.

    New Restaurant Average Unit Volumes
    $2.3 million
    IPO roadshow

    Historical expectation for new restaurant AUVs at the time of IPO.

    Industry KPIs

    2
    MetricValueDetails
    Comparable sales comps0.5%%
    Net unit growth development pipeline72restaurants

    Product announcements

    6
    ProductTypeDetails
    Roasted White Sweet Potatoupdate
    Sumac Slawlaunch
    Power Greenslaunch
    Tangerine Aleppo Juicelaunch
    Sumac Sour Cream and Onion Pita Chipslaunch
    Pomegranate-glazed Salmonlaunch

    Deals & partnerships

    1
    Doug ThompsonAppointment as Chief Operations Officer

    Doug Thompson will join CAVA as Chief Operations Officer in March. He brings deep experience in developing restaurant leaders and building talent pipelines, aligning with CAVA's focus on operational leadership and people development.

    Risks & headwinds

    6
    Dynamic consumer backdrop and macroeconomic uncertaintyFY26

    Assumed in low to mid-single-digit same-restaurant sales guidance for FY26, despite strong Q1 trends.

    Mitigation: Conservative guidance assumptions, focus on delivering value, and strong brand resonance.

    Tariffs & Limited-Time Offerings Impact on COGSQ4 FY25 (past impact), ongoing for tariffs

    Contributed to a 50 bps increase in food, beverage, and packaging costs as % of revenue in Q4 FY25 (to 30.4%).

    Mitigation: Operational efficiencies, strategic pricing (e.g., not raising base bowl prices), and strong AUVs to absorb costs.

    Higher Third-Party Delivery Mix & Technology CostsQ4 FY25 (past impact), ongoing for technology rollout

    Contributed to a 60 bps increase in other operating expenses as % of revenue in Q4 FY25 (to 13.4%).

    Mitigation: Investment in KDS system to improve accuracy and efficiency, optimizing digital channels.

    Increased Preopening CostsQ4 FY25, FY26

    $4.6 million in Q4 FY25, up $1.9 million from Q4 FY24. Guided to $19.5 million to $20 million for FY26.

    Mitigation: These are investments to support future growth and accelerated new unit development, expected to yield strong returns.

    Salmon Launch Margin HeadwindBeginning Q2 FY26

    Expected to be a margin rate headwind of approximately 100 basis points for restaurant-level margins.

    Mitigation: Pricing strategy aims for penny profit neutrality; salmon is a premium item expected to drive traffic and overall performance.

    Labor InflationFY26

    Low to mid-single-digit labor inflation expected for FY26.

    Mitigation: Inclusive of modest incremental investment to support the AGM program; focus on being a top payer to attract and retain talent.

    What to watch in Q1 FY26

    5

    Q1 FY26 Same-Restaurant Sales Trend

    next quarter
    CurrentQ1 comp trends tracking above full year guidance (3-5%)
    TargetContinued strong performance, exceeding conservative full-year guidance

    Why it matters

    Indicates whether the positive momentum seen early in Q1 FY26 is sustainable and if macro headwinds🌐 are less impactful than anticipated.

    As we exited last year, we began to see momentum in same-restaurant sales with first quarter comp trends tracking above full year guidance.

    Q&A highlights

    7

    Asked about the impact of strong new units entering the comp base on overall same-store sales, and what pockets of strength in mature units are driving outsized comps, especially in Q1.

    Management stated that new units entering the comp base in FY25 did not significantly negatively impact overall same-restaurant sales. Strength is seen across all restaurant vintages, geographies, and income cohorts. Q1 comp trends are tracking above full-year guidance.

    “And in fact, we're seeing strength across all of our vintages of restaurants, all of our geographies across the country, the income cohorts of our restaurants based on median household incomes in those markets that's really supporting the same-restaurant sales results that we've delivered and what we're seeing as we go into 2026 overall.”

    asked by John Ivankoe · answered by Tricia Tolivar

    3 min read7 chapters

    Detailed Narrative

    01

    Strategic Pillars and Brand Resonance

    CAVA's 2025 performance, including surpassing $1 billion in revenue and record new restaurant openings, signals a transition to a large-scale growth enterprise. The company emphasizes its value proposition, taking less than half the price increases of industry peers and underpricing CPI by over 10%, which reinforces trust with guests and strengthens the brand's long-term foundation. This strategy is built on four pillars: expansion, deepening guest relationships, running great restaurants, and team member development.

    02

    Expansion and New Market Entry

    CAVA opened 24 net new restaurants in Q4 FY25, bringing the total to 439 locations across 28 states and DC, a 19.6% increase year-over-year. The company plans to enter new Midwest markets in FY26, including Cincinnati, St. Louis, Columbus, and Minneapolis, with all new restaurants featuring the Project Soul design. The long-term goal remains at least 1,000 restaurants by 2032, supported by strong new restaurant productivity exceeding 100% and NRO AUVs trending above $3 million.

    03

    Culinary Innovation and Menu Expansion

    CAVA continues to innovate its menu, aligning with consumer demand for healthier options. Recent launches include roasted white sweet potato, Sumac Slaw, Power Greens, Tangerine Aleppo Juice, and Sumac Sour Cream and Onion Pita chips. A significant upcoming launch is Pomegranate-glazed Salmon, the first-ever seafood offering, planned for late Q1 FY26. This item performed better in tests than Chicken Shawarma and is expected to expand variety and appeal to a broader guest base.

    04

    Loyalty Program Evolution

    The loyalty program evolved with the introduction of tiered status levels (Sea, Sand, Sun) and an invite-only Oasis tier for most loyal guests. These tiers offer differentiated benefits, enhanced earning opportunities, and exclusive perks, aiming to strengthen engagement and personalize guest experiences. Early results show modest increases in frequency and earlier engagement with the brand, with the program driving about one-third of overall sales.

    05

    Operational Excellence and Technology Investment

    CAVA is focused on running great restaurants through investments in technology and team member development. The rollout of the kitchen display screen (KDS) system was completed in 370 locations in FY25, with the remaining 69 retrofits to be done in FY26, improving order accuracy and speed. TurboChef ovens have been rolled out across the entire restaurant base, ensuring consistent cook quality for menu items like the new salmon.

    06

    Leadership Development and Field Model

    To support scaling, CAVA is enhancing its leadership structure. Doug Thompson joins as Chief Operations Officer in March. The "Flavor Your Future" initiative, launched in October, includes the Assistant General Manager (AGM) role, with 60% filled, mostly by internal promotions. Restaurants with AGM coverage are outperforming others. The field leadership model was also restructured with two zone leaders, narrowed regional leader spans of control, and a new market leader role to increase in-restaurant leadership presence and coaching.

    07

    Catering Strategy

    CAVA is cautiously approaching catering expansion, with an ongoing test in Houston and plans for a second market test later in FY26. The company aims for a potential expansion to additional markets in FY27, prioritizing thoughtful execution to ensure operational success and guest experience. The strategy involves refining packaging, technology for self-service, and leveraging an existing B2B sales team, acknowledging the distinct production rhythm of catering.

    AI-generated summary of the company’s earnings call. Not investment advice.