CAVA Group, Inc. Reports Strong Fourth Quarter and Full Year Fiscal 2025 Results
CAVA Group, Inc. (NYSE: CAVA), the Mediterranean fast-casual restaurant brand known for combining bold flavors with a health-forward approach, has announced its financial results for the fiscal fourth quarter and full year ended December 28, 2025. The company delivered another year of significant top-line growth, restaurant expansion, and strong operating performance, surpassing $1 billion in annual revenue for the first time in its history.
Co-Founder and Chief Executive Officer Brett Schulman described 2025 as a milestone year for the company. He emphasized that CAVA’s disciplined, long-term growth strategy continues to resonate strongly with consumers. According to Schulman, the brand’s consistent momentum and increasing market share reflect the strength of its value proposition and the loyalty it is building among modern diners seeking healthier, flavor-driven options.
For the full fiscal year 2025, revenue increased 22.5% year over year to $1.17 billion. The company also opened 72 net new restaurants and achieved 4.0% same-restaurant sales growth, demonstrating both successful expansion and steady performance across existing locations despite macroeconomic challenges and strong comparisons from the prior year.
Fiscal Fourth Quarter 2025 Highlights
In the fourth quarter of fiscal 2025, CAVA generated revenue of $272.8 million, representing a 21.2% increase compared to $225.1 million in the same period last year. The growth was driven primarily by new restaurant openings and modest same-restaurant sales gains.
During the quarter, the company opened 24 net new CAVA restaurants. Same-restaurant sales rose 0.5%, reflecting a 1.9% increase from menu price adjustments and favorable product mix, partially offset by a 1.4% decline in guest traffic.
Restaurant-level profit reached $58.3 million, marking a 15.7% increase over the prior-year quarter. However, restaurant-level profit margin declined by 100 basis points to 21.4%. This margin compression was largely due to higher food, beverage, and packaging costs, including tariff impacts and costs related to a limited-time chicken shawarma offering. Additionally, investments in technology, including enhancements to the kitchen display system, and a higher mix of third-party delivery contributed to expense growth. Incremental wage investments also pressured margins, though leverage from higher sales partially offset these factors.
Digital revenue remained a significant component of sales, accounting for 38.9% of total revenue during the quarter, highlighting the company’s continued success in omnichannel engagement.
Net income for the quarter totaled $4.9 million, or 1.8% of revenue, compared to $78.6 million in the prior-year period. The prior-year results included a one-time tax benefit from the release of a valuation allowance against deferred tax assets. Excluding this benefit, adjusted net income in the prior-year quarter was $6.5 million, making the year-over-year comparison more balanced. The decline in adjusted net income was mainly attributable to higher depreciation and amortization expenses, partially offset by improved operating performance and lower equity-based compensation expenses.
Adjusted EBITDA for the quarter rose slightly to $25.8 million, up 2.6% from $25.1 million in the prior-year quarter. This growth was primarily driven by the strong performance of new restaurant openings, though partially offset by higher pre-opening costs and continued investments in future growth initiatives.
Fiscal Year 2025 Performance
For the full fiscal year, CAVA achieved revenue of $1.169 billion, representing a 22.5% increase compared to fiscal 2024 revenue of $954.3 million. The increase was fueled by 130 net new restaurant openings during or subsequent to fiscal 2024 and same-restaurant sales growth of 4.0%.
Same-restaurant sales growth was composed of 2.4% from menu pricing and product mix improvements and 1.6% from increased guest traffic, signaling balanced growth across both pricing and transaction volume.
The company opened 72 net new restaurants during fiscal 2025, bringing its total restaurant count to 439 locations. This represents a 19.6% increase in total units year over year. Average Unit Volume (AUV) reached $2.9 million, reflecting continued productivity across the system.
Restaurant-level profit for the year totaled $285.0 million, up 19.7% from the prior year. However, restaurant-level profit margin declined 60 basis points to 24.4%. The margin contraction was primarily due to higher food and packaging costs associated with the launch of grilled steak, tariff impacts, a higher mix of third-party delivery, and incremental wage investments. These pressures were partially offset by operational leverage from increased sales volumes.
General and administrative (G&A) expenses improved as a percentage of revenue. Total G&A expenses were $137.5 million, or 11.7% of revenue, compared to 12.5% in fiscal 2024. Excluding equity-based compensation and executive transition costs, G&A expenses were 10.1% of revenue, reflecting improved leverage and lower performance-based incentive compensation, partially offset by growth investments such as the CAVA Connect conference.
Net income for fiscal 2025 was $63.7 million, compared to $130.3 million in fiscal 2024. The prior year included a significant tax-related benefit from the valuation allowance release. Excluding that benefit, adjusted net income rose 26.9% year over year to $63.7 million from $50.2 million. The improvement in adjusted net income was driven by stronger operating performance and a lower effective tax rate, though partially offset by higher depreciation, amortization, executive transition costs, and lower interest income.
Adjusted EBITDA for the full year increased 21.0% to $152.8 million, compared to $126.2 million in fiscal 2024. The growth was driven by new restaurant openings, 4.0% same-restaurant sales growth, and improved G&A leverage, partially offset by higher pre-opening costs.
The company also generated $184.8 million in net cash from operating activities and reported free cash flow of $26.1 million, supporting continued reinvestment in growth.
Fiscal 2026 Outlook
Looking ahead to fiscal 2026, CAVA Group expects continued expansion and steady financial growth. The company plans to open between 74 and 76 net new restaurants during the year, reflecting its confidence in its long-term development pipeline.
Same-restaurant sales are projected to grow between 3.0% and 5.0%, supported by ongoing brand momentum and strategic pricing initiatives. Restaurant-level profit margin is expected to range between 23.7% and 24.2%, reflecting continued cost management amid an evolving economic environment.
Pre-opening costs are forecasted to be between $19.5 million and $20.0 million, as the company continues investing in new restaurant development. Adjusted EBITDA is projected to fall between $176.0 million and $184.0 million for fiscal 2026.
Management noted that actual results may differ materially due to various factors, including macroeconomic conditions and other risks outlined in the company’s forward-looking statements. A reconciliation of projected adjusted EBITDA to net income was not provided due to the inherent difficulty in forecasting certain adjusting items.
Overall, fiscal 2025 marked a transformative year for CAVA, highlighted by record revenue, sustained expansion, and disciplined cost management. As the company enters fiscal 2026, it remains focused on scaling responsibly, strengthening its brand presence, and delivering long-term shareholder value.
Source Link: https://www.businesswire.com/
