Cautionary Statement Concerning Forward-Looking Statements
This Annual Report on Form 10-K contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that reflect our current views with respect to, among other things, our operations and financial performance. Forward-looking statements include all statements that are not historical facts. These forward-looking statements relate to matters such as our industry, business strategy, goals, and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources, and other financial and operating information. These statements may include words such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “will,” “seek,” “foreseeable,” “outlook,” the negative version of these words or similar terms and phrases to identify forward-looking statements in this Annual Report on Form 10-K.
The forward-looking statements contained in this Annual Report on Form 10-K are based on management’s current expectations and are not guarantees of future performance. The forward-looking statements are subject to various risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify. Our expectations, beliefs, and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs, and projections will result or be achieved. Actual results may differ materially from these expectations due to changes in global, regional, or local economic, business, competitive, market, regulatory, and other factors, many of which are beyond our control.
You should not put undue reliance on any forward-looking statements. You should understand that many important factors, including those discussed herein, could cause our results to differ materially from those expressed or suggested in any forward-looking statement. Except as required by law, we do not undertake any obligation to update or revise these forward-looking statements to reflect new information or events or circumstances that occur after the date of this Annual Report on Form 10-K or to reflect the occurrence of unanticipated events or otherwise.
Summary of Risk Factors
Factors, risks, trends and uncertainties that make an investment in us speculative or risky and that could cause actual results or events to differ materially from those anticipated in our forward-looking statements include the matters described under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this report in addition to the following other factors, risks, trends, and uncertainties:
•our industry is highly competitive;
•our ability to open new restaurants while managing our growth effectively and maintaining our culture;
•our ability to successfully identify appropriate locations and develop and expand our operations in existing and new markets;
•our new restaurants may not be profitable and opening new restaurants may negatively impact our existing locations;
•the impact of changes in guest perception of our brand;
•our efforts to market our restaurants and brand may not be successful;
•the impact of food safety issues and food-borne illness concerns;
•our ability to maintain or increase prices;
•the impact of economic factors and our ability to anticipate trends and improve existing offerings;
•the risks associated with leasing property;
•our ability to expand our digital and delivery business;
•our ability to manage social media;
•our ability to realize the anticipated benefits from past and future acquisitions, investments, or other strategic initiatives;
•our ability to manage our manufacturing and supply chain effectively;
•our ability to successfully optimize, operate, and manage our production facilities;
•the risks associated with our reliance on third parties;
•the impact of shortages, delays, or interruptions in the delivery of food and other products;
•the impact of increases in food, commodity, energy, and other costs;
•the impact of increases in labor costs, labor shortages, and our ability to identify, hire, train, motivate, and retain the right Team Members;
•our ability to attract, develop, and retain our management team and key Team Members;
•the impact of any cybersecurity breaches;
•the laws and regulations, including those regarding privacy, data protection, and cybersecurity;
•the impact of failures, or interruptions in, or our inability to effectively scale and adapt, our information technology systems;
•the impact of evolving rules and regulations with respect to environmental, social, and governance (“ESG”) matters;
•the impact of climate change and volatile adverse weather conditions; and
•the other factors discussed under Part I, Item 1A. “Risk Factors.”
Glossary
The following definitions apply to these terms as used in this Annual Report on Form 10-K:
“Adjusted EBITDA” is defined as net income (loss) adjusted to exclude interest expense (income), net, provision for income taxes, and depreciation and amortization, further adjusted to exclude equity-based compensation, other income, net, impairment and asset disposal costs, restructuring and other costs, and certain non-recurring public company costs;
“Adjusted EBITDA Margin” is defined as Adjusted EBITDA as a percentage of revenue;
“CAVA Average Unit Volume” or “CAVA AUV” represents total revenue of operating CAVA Restaurants that were open for the entire trailing thirteen periods, and digital kitchens sales for such period, divided by the number of operating CAVA Restaurants that were open for the entire trailing thirteen periods;
“CAVA digital kitchen” is defined to include kitchens used for third-party marketplace and native delivery, digital order pickup and/or centralized catering production, and that has neither in-restaurant dining nor customer-facing make lines;
“CAVA Digital Revenue Mix” represents the portion of CAVA revenue related to digital orders as a percentage of total CAVA revenue;
“CAVA hybrid kitchen” is defined to include kitchens that have enhanced kitchen capabilities to support centralized catering production and that also have in-restaurant dining and customer-facing make lines;
“CAVA Restaurant-Level Profit,” a segment measure of profit and loss, represents CAVA Revenue in the specified period less food, beverage, and packaging, labor, occupancy, and other operating expenses, excluding depreciation and amortization, in the period. CAVA Restaurant-Level Profit excludes pre-opening costs;
“CAVA Restaurant-Level Profit Margin” represents CAVA Restaurant-Level Profit as a percentage of CAVA Revenue;
“CAVA Restaurants” is defined to include all CAVA restaurants, including converted Zoes Kitchen locations and CAVA hybrid kitchens, that are open as of the end of the specific period. CAVA Restaurants exclude restaurants operating under a license agreement and CAVA digital kitchens;
“CAVA Revenue” is defined to include all revenue attributable to CAVA restaurants in the specified period, excluding restaurants operating under license agreements;
“CAVA Same Restaurant Sales Growth” is defined as the period-over-period sales comparison for CAVA restaurants that have been open for 365 days or longer (including converted Zoes Kitchen locations that have been open for 365 days or longer after the completion of the conversion to a CAVA restaurant);
“Collaboration Center Organization” represents Team Members who work out of our restaurant collaboration center located in Washington, D.C., and our support centers located in Brooklyn, New York and Plano, Texas together with remote and hybrid Team Members whose job responsibilities support our operations;
“digital orders” means orders made through catering, digital channels, such as the CAVA app and the CAVA website. Digital orders include orders fulfilled through third-party marketplace and native delivery and digital order pick-up;
“guest traffic” means the number of entrees ordered in-restaurant and through digital orders; and
“Net New CAVA Restaurant Openings” is defined as new CAVA restaurant openings (including CAVA restaurants converted from a Zoes Kitchen location) during a specified reporting period, net of any permanent CAVA restaurant closures during the same period.
Certain numerical figures have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them.
Our Mission
To Bring Heart, Health, And Humanity To Food
General
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. As of December 31, 2023, we operate 309 fast-casual CAVA restaurants in 24 states and Washington, D.C. The number of CAVA restaurants excludes two locations operating under a licensing arrangement and digital kitchens. The Company’s authentic Mediterranean cuisine unites taste and health, with a menu that features chef-crated and customizable bowls and pitas. Our dips, spreads, and dressings are centrally produced and sold in grocery stores.
Business Strategy
We believe that our differentiated offerings and broad appeal give us significant opportunity in the Mediterranean and health and wellness food categories. Our guests span gender lines and age groups, with a strong Millennial and a growing Gen Z contingent, as well as all income brackets. The broad appeal of our brand is evidenced by substantial diversity across geographies, formats, dayparts, and channels. We are in the early stages of fulfilling our total restaurant potential, and we believe there is opportunity for more than 1,000 CAVA restaurants in the United States by 2032. We believe we are well positioned to benefit from the following strong and emerging trends:
•Evolving consumer preferences for authentic and ethnic cuisine
•Increased focus on health and wellness
•Emphasis on combined quality and convenience
We aim to create an industry-leading, category defining brand rooted in the following strategic pillars:
Expand our Mediterranean Way in Communities Across the Country
•Grow our footprint and expand multi-channel access
•Fuel our culinary innovation and communication engine to drive traffic, mix, and check
•Express the essence of our category-creating concept consistently across brand properties
Develop Personal Relationships with Guests, Even as We Scale
•Leverage our digital ecosystem to enable more personalized communication with guests
•Reimagine and relaunch our loyalty offering to deepen our connections with guests and drive increased frequency
•Create a cohesive physical and digital journey
Run Great Restaurants, Every Location, Every Shift
•Streamline and automate preparation to make our restaurants easier to run
•Enhance our training and standards to consistently deliver our Mediterranean hospitality
•Leverage technologies to increase automation and improve restaurant operations
Operate As a High-Performing Team
•Create a culture of growth and accountability
•Use best-in-class data capabilities to unlock powerful, actionable insights
•Implement programs and tools that engage, retain, and connect the organization
Our Food - Where Taste and Health Unite
Our menu fulfills a broad range of dietary preferences, from hearty and indulgent to vegan, vegetarian, gluten-free, dairy-free, paleo, keto, and nut-free diets. We have designed our menu to offer vibrant flavors utilizing fresh, high-quality