CAVA (CAVA) Q4 FY25 earnings call: guidance and Q&A

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

Inquired about new unit productivity assumptions for FY26 guidance and why comps are expected to decelerate for the rest of the year despite new menu items like salmon.

FY26 guidance embeds 90% new restaurant productivity, a thoughtful assumption given FY25's over 100%. Comp guidance of 3-5% reflects a long-term algorithm (low to mid-single-digit) and macro uncertainty, not an expectation of deceleration due to internal factors. Salmon is expected to drive lifts but is conservatively factored in.

“So our new restaurant productivity assumption included in our guidance is about 90%. As you know, our '25 cohort delivered over 100% productivity, but we wanted to be very thoughtful in our assumptions as we went into 2026.”

asked by Sharon Zackfia · answered by Tricia Tolivar

Asked about temporary pressures on FY26 restaurant-level margins (e.g., salmon) and actions to return to the 25% long-term target.

Management clarified that 25% is not a target but a past achievement, with current focus on reinvestments in team members and guests. Salmon will be a 100 bps margin headwind (penny profit neutral). Labor investments, including the AGM program, will also impact margins. The strong AUVs allow for these investments without significant price increases to guests.

“So when I talk about investments, think about modest price increases. So our base bowls, for example, we did not increase at all when we raised prices at the beginning of this year, making investment in the guests and making ourselves even more accessible than we've ever been.”

asked by Jake Bartlett · answered by Tricia Tolivar

Asked about the impact of new store maturation on the 3-5% comp guidance and how salmon test results compared to Chicken Shawarma.

New restaurants are opening with higher AUVs than previously expected, exceeding IPO roadshow projections. The FY25 cohort's impact on FY26 guidance is modeled as a slightly larger negative impact than FY24's on FY25. Salmon test results performed "a little bit better" than Chicken Shawarma, but guidance conservatively factors in new culinary initiatives.

“You asked also about the salmon test versus Chicken Shawarma, bringing in salmon at the end of the quarter, it's amazing pomegranate-glazed and in test results performed a little bit better than Chicken Shawarma, but we've also been very thoughtful in how we're building that into our guidance assumptions and going back to -- we looked at trends quarter-to-date, layered on a low to mid-single-digit long-term algorithm assumption for the rest of the year. So we've been very thoughtful in how we're applying any new culinary initiatives that are going to roll out.”

asked by Andrew Charles · answered by Tricia Tolivar

Asked about CAVA's readiness (systems, infrastructure, people) to support growth beyond the 500-unit mark, especially with the goal of 100+ restaurants annually.

Management feels good about manufacturing, technology, and data infrastructure. The primary focus for infrastructure is deepening the people development pipeline, including the new COO and "Flavor Your Future" platform, to build a bench of role-ready leaders for accelerated growth. Kitchen infrastructure (TurboChef, KDS) also supports operational flexibility and execution.

“Certainly, the priority from an infrastructure standpoint beyond what we've already built is deepening and broadening our people development pipeline.”

asked by David Tarantino · answered by Brett Schulman

Inquired about the drivers of CAVA's Q1 YTD outperformance compared to the industry and the impact of January weather.

Management attributes outperformance to cycling past high hurdles, underlying brand strength (seen in NROs), and delivering value in a promotional environment. The Mediterranean cuisine, relevance to health trends (e.g., GLP-1), and multichannel format contribute to long-term secular momentum. Weather impact (including January storms) is already factored into guidance and Q1 YTD context.

“And I also think we focused on delivering great value every day. And there was a very intense promotional discount environment in Q2, Q3 and somewhat Q4. And I feel like there's a sense that there may have been some buying of transactions in other places where consumers were gravitating back to where they find great bang for the buck as they're becoming increasingly discerning about where they're spending those dollars.”

asked by Logan Reich · answered by Brett Schulman

Asked for more color on the primary benefits of the AGM role, the timeline for its completion, and confidence in the management pipeline for future unit growth.

The AGM role addresses broadening the pipeline of role-ready leaders for new restaurants and ensuring more seasoned management coverage across all 14 dayparts. Management is confident in the pipeline and expects the AGM roles to be 100% filled by mid-year.

“I think the 2 big things the AGM role is meant to address and is addressing is, one, that broadening and deepening of role-ready leaders to fill that pipeline and open those new restaurants with operational integrity. And two, it goes to our third pillar is title. It's running great restaurants every location, every shift.”

asked by Jeffrey Bernstein · answered by Brett Schulman