Operations

Cava doubles earnings, misses expectations

Photo: Cava

February 26, 2025

Cava reported Q4 earnings of 5 cents per share Tuesday, which was twice as high as last year but it fell short of the 7 cents on revenue of $223.3 million predicted by FactSet. Instead, revenue grew 28% to $227.4 million, and same-restaurant sales were up 21.2%.

CEO Brett Schulman said the company was one of the few publicly traded restaurant brands to generate positive traffic growth.

"Our success in 2024 demonstrated our broad appeal, the power of our unit economic engine and the impact of the investments we have made in our teams, guests and infrastructure to support our growth," he said during Tuesday's earnings call. "In our first full fiscal year as a public company, we delivered four consecutive quarters of free cash flow."

Cava, which entered South Florida last year, is expanding its presence in the Midwest with openings in Detroit and Indianapolis later this year. It will also grow its Mid-Atlantic footprint with its first restaurant openings in Pittsburgh, Pennsylvania.

A little help from loyal customers

Since launching its reimagined rewards program, the chain has seen a 230 basis point increase in loyalty percent of sales.

"As we move into 2025, we will build on our multiphase plan by leveraging first-party data to deepen guest insights using enhanced rewards, tiers and tailored communications to develop personal touch points across all of our channels," Schulman said.

Connected Kitchen

Schulman said he was also excited about the advances in the chain's Connected Kitchen initiative, which launched last year.

"A key milestone was the completion of the test-and-learn phase for our generative AI video technology, which is now live in four restaurants, and we intend to expand to more restaurants in 2025," he said. "Additionally, early results from our new kitchen display system, currently live in 25 locations, are promising."

Since the technology has improved digital order accuracy and productivity while reducing customer experience complaints in the test locations, Cava will implement a broader rollout of the KDS in 2025.

"Including new and existing restaurants, we expect to expand the technology to 250 restaurants by year-end. Building on our exceptional 2024, we will continue to define the category we have created, Mediterranean, by anchoring in our four strategic pillars as a guiding force," he said.

Q4 highlights

Revenue grew 28.3% to $225.1 million as compared to $175.5 million in the prior year quarter. Excluding $10.9 million of revenue in the 53rd week of fiscal 2023, CAVA Revenue grew 36.8%.
Opened 15 locations bringing total CAVA Restaurants to 367, an 18.8% increase in total CAVA Restaurants year over year.
Same Restaurant Sales Growth of 21.2%.
CAVA Restaurant-Level Profit of $50.4 million or growth of 28.2% over the prior year quarter, with CAVA Restaurant-Level Profit Margin of 22.4%, an increase of 50 basis points excluding the 53rd week of fiscal 2023.
Digital Revenue Mix was 36.8%.

Fiscal Year 2024 Highlights:

Revenue grew 33.1% to $954.3 million as compared to $717.1 million in the prior year. Excluding $10.9 million of revenue in the 53rd week of fiscal 2023, CAVA Revenue grew 35.1%.
Opened 58 locations.
Same Restaurant Sales Growth of 13.4%.
AUV of $2.9 million as compared to $2.6 million excluding the 53rd week of fiscal 2023 in the prior year.
Restaurant-Level Profit of $238.1 million or growth of 34.2% over the prior year, with Restaurant-Level Profit Margin of 25%, a 20 basis point increase over the prior year.
Digital Revenue Mix was 36.4%.
Income of $130.3 million compared to net income of $13.3 million in the prior year. Excluding the VA Release, CAVA Group Adjusted Net Income1was $50.2 million compared to $13.3 million in the prior year.
CAVA Group Adjusted EBITDA1 of $126.2 million compared to $73.8 million in the prior year.

For 2025, Cava guided adjusted EBITDA of $150 million-$157 million. Analysts were expecting $165.2 million for the full year, according to FactSet.