CAVA GROUP, INC. (CAVA) Q4 2024 Earnings Summary

Executive Summary

Strong Q4 top-line with 28.3% YoY revenue growth to $227.4M (36.8% YoY growth for CAVA restaurant revenue ex-53rd week); comps accelerated to 21.2% with 15.6% traffic, evidencing continued share gains and brand momentum .
Quality of earnings: GAAP diluted EPS surged to $0.66 on an $80.1M tax valuation allowance release; adjusted diluted EPS was $0.05, up from $0.02 YoY, with Adjusted EBITDA up 60% YoY to $25.1M (11.0% margin) .
2025 guidance introduced: 62–66 net new openings (≥17% growth), SSS +6–8%, restaurant-level margin 24.8–25.2%, Adjusted EBITDA $150–$157M; modest 1.7% Jan price increase and no further 2025 price hikes planned .
New unit economics raised: Year 1 AUV to $2.3M, Year 2 AUV to $2.5M, Year 2 restaurant-level margin to 22%, and cash-on-cash returns to ≥40%; supports multi-year growth algorithm and white space expansion .
Potential stock catalysts: sustained high-traffic comps, improved new-unit return profile, technology enablement (KDS rollout to ~250 locations) for throughput/accuracy, and 2025 guidance execution; investors should normalize EPS for tax allowance and monitor steak COGS roll-off by summer 2025 .

What Went Well and What Went Wrong

What Went Well
- Demand: Q4 same-restaurant sales +21.2% with traffic +15.6%; AUV reached $2.9M at year-end; “one of just a few publicly traded restaurant brands that generated positive traffic growth” in 2024 .
- Unit economics upgrade: CAVA lifted new store targets (Y1 AUV $2.3M; Y2 AUV $2.5M; Y2 margin 22%; ≥40% Y2 cash-on-cash returns), reflecting strong openings and portability across markets .
- Technology/ops: Early success in new labor model (productivity and service score improvements) and Connected Kitchen initiatives; KDS test improved digital accuracy/productivity with planned rollout to ~250 restaurants in 2025 .
- Quote: “We will continue to make prudent investments in the business to drive long-term growth.” – CFO Tricia Tolivar .
What Went Wrong
- Margin mix/seasonality: Restaurant-level margin dipped to 22.4% in Q4 from 25.6% in Q3, impacted by seasonality and higher food costs from steak rollout; food costs were 29.9% (+110 bps YoY) .
- Wage inflation: Labor investments including AB 1228 impact (not offset by pricing) weighed on margins (labor 27.3%, -50 bps YoY but still elevated), highlighting ongoing cost pressure .
- Estimate context: Wall Street consensus (S&P Global) could not be retrieved due to a temporary data limit; formal beats/misses vs consensus cannot be quantified in this report (see Estimates Context) [GetEstimates error].

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($USD Millions)	$177.17	$243.82	$227.40
Diluted EPS (GAAP)	$0.02	$0.15	$0.66
Net Income Margin %	1.2%	7.4%	34.6% (includes VA release)
Adjusted EBITDA ($M)	$15.69	$33.48	$25.10
Adjusted EBITDA Margin %	8.9%	13.7%	11.0%
CAVA SSS Growth %	11.4%	18.1%	21.2%
CAVA RLP Margin %	22.4%	25.6%	22.4%

Notes: Q4 2024 GAAP EPS reflects an $80.1M tax valuation allowance release; adjusted diluted EPS was $0.05 . CAVA revenue ex-53rd week grew 36.8% YoY .

Segment snapshot (CAVA Restaurants):

Metric	Q2 2024	Q3 2024	Q4 2024
CAVA Revenue ($M)	$231.38	$241.50	$225.10
Restaurant-Level Profit ($M)	$61.27	$61.82	$50.41
Restaurant-Level Profit Margin %	26.5%	25.6%	22.4%

KPIs and Operating Metrics:

KPI	Q2 2024	Q3 2024	Q4 2024
Net New Openings	18	11	15
Restaurants End of Period	341	352	367
AUV ($)	$2,689,000	$2,784,000	$2,865,000
Digital Revenue Mix %	35.8%	35.8%	36.8%
Same-Restaurant Sales Growth %	14.4%	18.1%	21.2%
Restaurant Operating Weeks	3,963	4,159	4,299

Why QoQ margin down: Q4 seasonality ~200 bps below full-year, steak COGS headwind (~100 bps) until summer 2025, and incremental wage investments; partially offset by sales leverage .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net New CAVA Restaurant Openings	FY 2025	“At least 17% unit growth” (implies ~≥62 units on 2024 base)	62–66 openings	Specified numeric range; aligns with ≥17%
Same-Restaurant Sales Growth	FY 2025	—	6.0%–8.0%	New
Restaurant-Level Profit Margin	FY 2025	Consistent with 2024	24.8%–25.2%	New range, consistent with prior directional
Adjusted EBITDA	FY 2025	—	$150–$157M	New
Pre-opening Costs	FY 2025	—	$14–$15M	New
Effective Tax Rate	FY 2025	—	15%–20% (cash taxes immaterial until NOLs used)	New
Stock-Based Compensation	FY 2025	—	$20–$22M; ~60% in 1H	New
Pricing	2025	—	~1.7% in-restaurant increase in Jan; no further raises planned	New
Steak COGS Headwind	2025	—	~100 bps impact rolls off by summer 2025	New
New Unit Economic Model	Ongoing	Prior model (Y1 AUV $2.1M; Y2 AUV $2.3M; Y2 margin 20%; ≥35% returns)	Y1 AUV $2.3M; Y2 AUV $2.5M; Y2 margin 22%; ≥40% returns; ~$1.375M net capex/unit	Raised targets

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2, Q3)	Current Period (Q4)	Trend
AI/Technology (Connected Kitchen, KDS)	Gen-AI video pilot launched; KDS in 25 locations (Q3)	KDS improved order accuracy/productivity; rollout to ~250 restaurants planned in 2025	Accelerating rollout
Labor model & throughput	New labor/deployment model rolled out ahead of schedule; early benefits (Q3)	Productivity gains across dayparts; focus on speed without sacrificing service	Scaling, improving
Pricing & value proposition	Modest pricing; emphasis on value (Q2/Q3)	Jan +1.7%; total price +15% since 2019 vs ~23% CPI; below QSR cumulative pricing; no further 2025 hikes	Value intact, disciplined pricing
Menu innovation (steak, pita chips)	Steak launched Q2; strong incidence; garlic ranch pita chips LTO (Q3)	Steak still strong; seasonal collabs; more flavor platform innovation ahead	Sustained
Regional expansion	Chicago entry and South Florida planned (Q3)	Adding Detroit, Indianapolis, Pittsburgh in 2025	Broadening footprint
Catering	Limited mention earlier	2025 major-metro test of production/packaging/tech; national launch not in 2025 nor early 2026	Early-stage, disciplined
Cost inflation (food/labor)	Wage investments; steak COGS	Low-single-digit food inflation ex-steak; AB 1228 labor impacts; steak COGS roll-off by summer	Moderating post roll-off

Management Commentary

Strategy and demand: “It is clear that our unique value proposition… is meeting the moment for the modern consumer. We have significant white space opportunity ahead.” – CEO Brett Schulman .
Loyalty/data: “We’ve seen a 230 bps increase in loyalty percent of sales… leveraging first-party data to deepen guest insights using enhanced rewards, tiers and tailored communications.” – CEO .
Tech and human experience: “We remain committed to using technology to enhance the human experience, not replace it.” – CEO .
Margin/price posture: “As of January 2025, we implemented ~1.7% in-restaurant menu price adjustment… no plans for further price increases this year.” – CFO Tricia Tolivar .
New unit economics: “We now anticipate Y1 AUV $2.3M, Y2 AUV $2.5M… Y2 margin 22%… Y2 cash-on-cash returns ≥40%.” – CFO .
Kiosks stance: “Don’t expect [kiosks]… If people want a kiosk-type experience, they can… order on the app.” – CEO .

Q&A Highlights

Margins: Steak COGS and wage investments are key 2025 headwinds; food inflation otherwise low-single digits; occupancy leverage to continue; flat-to-slight leverage overall in 2025 within guided margin range .
Throughput: Focus on speed-at-peak without compromising service; early gains via labor deployment; incremental customers per store/day can yield meaningful traffic lift .
Loyalty efficacy: Loyalty sales up ~230 bps since relaunch; targeted promotions (e.g., half-point redemption on pita chips) drove record redemptions and engagement .
New unit model: Raised AUV and return targets based on 2024 cohorts; 2025 guidance assumes ~$2.3M Y1 AUV for new class .
Catering: 2025 large-metro test of packaging/production/tech; national rollout timing post-2025/early 2026 depending on test results .
Value positioning: Cumulative price +15% since 2019 vs ~23% CPI and mid-30s for QSR peers; Jan +1.7% increase, under expected CPI .

Estimates Context

Consensus estimates from S&P Global (Capital IQ) were unavailable at the time of writing due to a temporary request limit. As a result, we cannot quantify Q4 2024 revenue/EPS beats or misses versus Wall Street consensus in this report. Values would normally be retrieved from S&P Global for this purpose [GetEstimates error].

Where estimates may need to adjust:

Traffic-driven comp strength and upgraded new unit economics suggest upward bias to medium-term AUV/returns; 2025 Adjusted EBITDA guidance ($150–$157M) provides a benchmark for modeling; margin profile framed as stable with steak headwind roll-off by summer 2025 .

Key Takeaways for Investors

Demand remains exceptional: Q4 comps +21.2% with +15.6% traffic; momentum appears durable into 2025 with a high-30s three-year stack framework and modest pricing .
Normalize EPS: GAAP EPS boosted by $80.1M tax allowance release; focus on Adjusted EBITDA (+60% YoY) and adjusted EPS ($0.05) for operating trends .
Margin path: Expect stable restaurant-level margins (24.8–25.2%) with steak COGS headwind rolling off by summer and no further 2025 pricing planned; watch labor dynamics and pace of throughput improvements .
Upgraded unit economics de-risk growth: Higher AUVs, margins, and ≥40% Y2 returns plus $1.375M net capex/unit support outsized returns on 62–66 planned 2025 openings .
Tech enablement as a throughput lever: KDS rollout to ~250 units and Connected Kitchen should improve order accuracy/productivity; potential comp tailwind if speed gains translate to captured demand at peak .
Capital strength: $366.1M cash, zero debt, and undrawn $75M revolver provide ample capacity to fund unit growth and tech investments .
Watch list: Execution on 2025 SSS 6–8%, pace of new openings (back-half weighted), catering test results, and any macro or wage surprises relative to guidance .

Appendix: Additional Data Points

Consolidated Q4 2024 statement of operations highlights: Revenue $227.395M; net income $78.619M; diluted shares 118.546M .
Quarterly CAVA comps and AUV: Q2 2024 SSS +14.4%, AUV $2.689M; Q3 2024 SSS +18.1%, AUV $2.784M; Q4 2024 SSS +21.2%, AUV $2.865M .
FY 2024: Revenue $963.7M; Adjusted EBITDA $126.2M; Restaurant-level margin 25.0%; Adjusted net income $50.2M; FCF $52.9M .