# CAVA GROUP, INC. (CAVA) Informational only - not investment advice. CIK: 0001639438 SIC: 5812 Retail-Eating Places SIC breadcrumb: [Retail Trade](/division/G/) > [Eating And Drinking Places](/major-group/58/) > [SIC 5812 Retail-Eating Places](/industry/5812/) Latest 10-K filed: 2026-02-25 SEC page: https://www.sec.gov/edgar/browse/?CIK=1639438 Filing source: https://www.sec.gov/Archives/edgar/data/1639438/000162828026011296/cava-20251228.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 1179664000 | USD | 2025 | 2026-02-25 | | Net income | 63743000 | USD | 2025 | 2026-02-25 | | Assets | 1360027000 | USD | 2025 | 2026-02-25 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-25. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001639438.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | 500,072,000 | 564,119,000 | 728,700,000 | 963,713,000 | 1,179,664,000 | | Net income | | -37,391,000 | -58,987,000 | 13,280,000 | 130,319,000 | 63,743,000 | | Operating income | | -52,752,000 | -59,766,000 | 4,725,000 | 43,118,000 | 55,285,000 | | Diluted EPS | | -51.06 | -44.41 | 0.21 | 1.10 | 0.54 | | Assets | | | 583,883,000 | 983,757,000 | 1,169,669,000 | 1,360,027,000 | | Liabilities | | | 370,078,000 | 412,955,000 | 474,103,000 | 580,371,000 | | Stockholders' equity | -360,428,000 | -393,021,000 | -448,503,000 | 570,802,000 | 695,566,000 | 779,656,000 | | Cash and cash equivalents | | | 39,125,000 | 332,428,000 | 366,120,000 | 282,917,000 | | Net margin | | -7.48% | -10.46% | 1.82% | 13.52% | 5.40% | | Operating margin | | -10.55% | -10.59% | 0.65% | 4.47% | 4.69% | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-25. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001639438.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2023-Q4 | 2023-12-31 | 177,170,000 | 2,049,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q4 | 2024-12-29 | 227,395,000 | 78,619,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q4 | 2025-12-28 | 274,985,000 | 4,921,000 | | derived Q4 = FY annual - nine-month YTD | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1639438/000162828026036625/cava-20260419.htm Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high Filing date: 2026-05-20 Report date: 2026-04-19 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim condensed consolidated financial statements and the related notes included elsewhere in this Form 10-Q and our Annual Report on Form 10-K for the year ended December 28, 2025 (our “2025 Annual Report”). In addition to historical information, this discussion and analysis contains forward-looking statements based on current expectations that involve risks, uncertainties, and other factors outside the Company’s control, as well as assumptions, such as our plans, objectives, expectations, and intentions. Our actual results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors, including those described under the sections entitled “Cautionary Statement Concerning Forward-Looking Statements” above and “Risk Factors” in our 2025 Annual Report. Overview 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. The Company is headquartered in Washington, D.C. and, as of April 19, 2026, the Company operates 459 fast-casual CAVA Restaurants in 29 states and Washington, D.C. The Company’s authentic Mediterranean cuisine unites taste and health, with a menu that features chef-curated and customizable bowls and pitas. The Company centrally produces dips, spreads, and certain dressing bases for use in its restaurants while also selling its dips, spreads, and prepared dressings in grocery stores. Segments The Company’s operations are conducted as two operating segments: CAVA and CAVA Foods. CAVA includes the operations of all company-owned CAVA restaurants. CAVA Foods includes the production of dips, spreads, and certain dressing bases used in CAVA restaurants as well as sales from the Company’s CPG business. These segments were determined on the same basis that the Company’s CEO, who is the CODM, manages, evaluates, and makes key decisions regarding the business. The CODM does not manage the Company on a consolidated basis. CAVA Foods is below quantitative thresholds for segment reporting purposes, resulting in CAVA being the Company’s one reportable segment. The Company’s CPG operations are included in Other non-reportable segment. See Item 1. “Financial Statements,” Note 12 (Segment Reporting) for more information. Key Performance Measures In assessing the performance of our business, in addition to considering a variety of measures in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), our management team also considers a variety of other key performance measures, including non-GAAP measures. The key performance measures used by our management for determining how our business is performing are detailed in the table below. We believe that these key performance measures provide useful information to users of our financial statements in understanding and evaluating our results of operations in the same manner as our management team. The presentation of these key performance measures, including Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP financial measures, is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. See “Non-GAAP Financial Measures” below. 15 Table of Contents The following table sets forth our key performance measures: Sixteen Weeks Ended ($ in thousands) April 19, 2026 April 20, 2025 Change CAVA Revenue $ 434,392  $ 328,482  $ 105,910  Same Restaurant Sales 9.7  % 10.8  % (1.1) % AUV $ 3,027  $ 2,933  $ 94  CAVA Restaurant-Level Profit $ 108,852  $ 82,305  $ 26,547  CAVA Restaurant-Level Profit Margin 25.1  % 25.1  % —  % Net New CAVA Restaurant Openings 20  15  5  Digital Revenue Mix 39.9  % 38.0  % 1.9  % Net income $ 23,566  $ 25,707  $ (2,141) Adjusted EBITDA1 $ 61,734  $ 44,850  $ 16,884  Net income margin 5.4  % 7.7  % (2.3) % Adjusted EBITDA margin1 14.1  % 13.5  % 0.6  % __________________ 1    See “Non-GAAP Financial Measures” below for a discussion of Adjusted EBITDA and Adjusted EBITDA margin and a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure. Adjusted EBITDA margin is Adjusted EBITDA as a percentage of revenue. CAVA Restaurants and Net New CAVA Restaurant Openings The following table details CAVA Restaurant unit data: Sixteen Weeks Ended April 19, 2026 April 20, 2025 CAVA Restaurants Beginning of period 439  367 New CAVA Restaurant openings 21  15 Permanent closure (1) —  End of period 459  382  Results of Operations Our results of operations, on a consolidated basis and by segment, for the sixteen weeks ended April 19, 2026 and April 20, 2025, are set forth below. Comparison of the sixteen weeks ended April 19, 2026 and April 20, 2025 Consolidated Results The following table summarizes our consolidated results of operations: Sixteen Weeks Ended (in thousands) April 19, 2026 April 20, 2025 Change $ % of Revenue $ % of Revenue $ % Revenue $ 438,270  100.0  % $ 331,826  100.0  % $ 106,444  32.1  % Operating expenses: Restaurant operating costs (excluding depreciation and amortization) Food, beverage, and packaging 127,678  29.1  97,559  29.4  30,119  30.9  Labor 111,551  25.5  84,562  25.5  26,989  31.9  Occupancy 29,857  6.8  24,408  7.4  5,449  22.3  Other operating expenses 57,992  13.2  41,234  12.4  16,758  40.6  16 Table of Contents Total restaurant operating expenses 327,078  74.6  247,763  74.7  79,315  32.0  General and administrative expenses 51,590  11.8  41,394  12.5  10,196  24.6  Depreciation and amortization 25,466  5.8  20,811  6.3  4,655  22.4  Pre-opening costs 6,161  1.4  4,481  1.4  1,680  37.5  Impairment and asset disposal costs 2,718  0.6  1,667  0.5  1,051  63.0  Total operating expenses 413,013  94.2  316,116  95.3  96,897  30.7  Income from operations 25,257  5.8  15,710  4.7  9,547  60.8  Interest income, net (4,082) (0.9) (4,617) (1.4) 535  (11.6) Other income, net (700) (0.2) (27) —  (673) N/M Income before taxes 30,039  6.9  20,354  6.1  9,685  47.6  Provision for (benefit from) income taxes 6,473  1.5  (5,353) (1.6) 11,826  N/M Net income $ 23,566  5.4  % $ 25,707  7.7  % $ (2,141) (8.3) % __________________ N/M data not meaningful Revenue, Food, beverage, and packaging, Labor, Occupancy, and Other operating expenses: The increases in Revenue, Food, beverage, and packaging, Labor, Occupancy, and Other operating expenses are primarily driven by the growth of our CAVA Segment. Refer to “CAVA Segment Results” below for more information. General and administrative expenses: The increase in general and administrative expenses was primarily due to investments to support future growth, higher performance-based incentive compensation, and higher equity-based compensation. As a percentage of revenue, general and administrative expenses decreased primarily due to leverage from higher sales, partially offset by the impact of the items noted above. Depreciation and amortization: The increase in depreciation and amortization was primarily driven by the addition of assets from the 92 Net New CAVA Restaurant Openings during or subsequent to the sixteen weeks ended April 20, 2025 and technology improvements. Pre-opening costs: The increase in pre-opening costs was due to a higher volume of new CAVA restaurants under construction. Impairment and asset disposal costs: The increase in impairment and asset disposal costs was primarily due to impairment charges related to certain operating lease assets and property and equipment, net. Interest income, net: The decrease in interest income, net, was due to lower interest rates on investments in fixed income debt securities and money market funds in the current year, partially offset by higher balances in these investments. Other income, net: The increase in other income, net, was primarily due to the fair value change recognized on a convertible promissory note described in Item 1, Financial Statements, Note 3 (Investments). Provision for (benefit from) income taxes: The effective income tax rate for the sixteen weeks ended April 19, 2026 and April 20, 2025 was 21.5% and (26.3)%, which include the impact of a $2.2 million and $10.7 million reduction to income tax expense associated with equity-based compensation, respectively. 17 Table of Contents CAVA Segment Results The following table summarizes the results of the CAVA segment: Sixteen Weeks Ended April 19, 2026 April 20, 2025 Change (in thousands) $ % of Revenue $ % of Revenue $ % Revenue $ 434,392  100.0  % $ 328,482  100.0  % $ 105,910  32.2  % Restaurant operating expenses (excluding depreciation and amortization) Food, beverage, and packaging 126,418  29.1  96,224  29.3  30,194  31.4  Labor 111,551  25.7  84,562  25.7  26,989  31.9  Occupancy 29,857  6.9  24,408  7.4  5,449  22.3  Other operating expenses 57,714  13.3  40,983  12.5  16,731  40.8  Total restaurant operating expenses 325,540  74.9  246,177  74.9  79,363  32.2  Restaurant-level profit $ 108,852  25.1  % $ 82,305  25.1  % $ 26,547  32.3  % CAVA Revenue: The increase in CAVA Revenue was primarily due to a $73.7 million increase from the 92 Net New CAVA Restaurant Openings during or subsequent to the sixteen weeks ended April 20, 2025. In addition, the increase in CAVA Revenue was driven by Same Restaurant Sales of 9.7%, which consisted of a 6.8% increase from Guest Traffic and a 2.9% increase from menu price and product mix. CAVA food, beverage, and packaging: The increase in CAVA food, beverage, and packaging was primarily due to a $22.1 million increase from the 92 Net New CAVA Restaurant Openings during or subsequent to the sixteen weeks ended April 20, 2025. The remainder of the increase was primarily due to Same Restaurant Sales of 9.7%. As a percentage of CAVA Revenue, CAVA food, beverage, and packaging decreased primarily due to improved mix. CAVA labor: The increase in CAVA labor was primarily due to the 92 Net New CAVA Restaurant Openings during or subsequent to the sixteen weeks ended April 20, 2025 and higher average hourly wages of 2%, including the expansion of our Assistant General Manager role. As a percentage of CAVA Revenue, CAVA labor remained flat due to the impact of higher sales, offset by the aforementioned incremental wage investments. CAVA occupancy: The increase in CAVA occupancy was primarily due to the 92 Net New CAVA Restaurant Openings during or subsequent to the sixteen weeks ended April 20, 2025. As a percentage of CAVA Revenue, CAVA occupancy decreased primarily due to operating leverage associated with higher sales. CAVA other operating expenses: The increase in CAVA other operating expenses was primarily due to the 92 Net New CAVA Restaurant Openings during or subsequent to the sixteen weeks ended April 20, 2025 and Same Restaurant Sales of 9.7%. As a percentage of CAVA Revenue, CAVA other operating expenses increased due to a higher mix of third-party delivery and other individually insignificant items, partially offset by operating leverage associated with higher sales. 18 Table of Contents Other Results The following table summarizes remaining activity related to CPG operations and the production of dips, spreads, and certain dressing bases used in CAVA restaurants: Sixt [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the related notes thereto included in Item 8. “Financial Statements and Supplementary Data” of this Annual Report. For a discussion of the year ended December 29, 2024 compared to December 31, 2023, please refer to Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of our Annual Report on Form 10-K for the year ended December 29, 2024 as filed with the SEC on February 26, 2025. In addition to historical information, this discussion and analysis contains forward-looking statements based on current expectations that involve risks, uncertainties, and other factors outside the Company’s control, as well as assumptions, such as our plans, objectives, expectations, and intentions. Our actual results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors, including those described under the sections entitled “Cautionary Statement Concerning Forward-Looking Statements” and “Risk Factors” included elsewhere in this Annual Report. Overview 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. The Company is headquartered in Washington, D.C. and, as of December 28, 2025, operates 439 fast-casual CAVA Restaurants in 28 states and Washington, D.C. The Company’s authentic Mediterranean cuisine unites taste and health, with a menu that features chef-curated and customizable bowls and pitas. The Company centrally produces dips, spreads, and certain dressing bases for use in its restaurants while also selling its dips, spreads, and prepared dressings in grocery stores. Segments The Company’s operations are conducted as two operating segments: CAVA and CAVA Foods. CAVA includes the operations of all company-owned CAVA restaurants. CAVA Foods includes the production of dips, spreads, and certain dressing bases used in CAVA restaurants as well as sales from the Company’s CPG business. These segments were determined on the same basis that the Company’s Chief Executive Officer (“CEO”), who is the chief operating decision maker (“CODM”), manages, evaluates, and makes key decisions regarding the business. The CODM does not manage the Company on a consolidated basis. CAVA Foods is below quantitative thresholds for segment reporting purposes, resulting in CAVA being the Company’s one reportable segment for the periods covered by the consolidated financial statements. The Company’s CPG operations are included in Other. See Item 8. “Financial Statements and Supplementary Data,” Note 13 (Segment Reporting) for more information. Key Factors Affecting Our Business We have continued to see growth in revenue, surpassing $1 billion in revenue in fiscal 2025, due to our Net New CAVA Restaurant openings and Same Restaurant Sales growth. In fiscal 2025, we opened 72 Net New CAVA Restaurants, entering new markets such as Indianapolis, South Florida, Pittsburgh, and Detroit. Our 2025 Net New CAVA Restaurants are trending above $3.0 million in AUV demonstrating strong new restaurant productivity and the portability of the brand across the country. CAVA Restaurant-Level Profit Margin remained strong, while making investments in the business to support culinary innovation, Team Member wages, and menu pricing below inflation. Future results will be impacted by our ability to continue to successfully expand our restaurant base and navigate challenges and uncertainties such as macroeconomic conditions that may impact guest demand, commodity and wage inflation, and supply chain constraints. Fiscal Calendar and Seasonality We operate on a 52-week or 53-week fiscal year that ends on the last Sunday of the calendar year. In a 52-week fiscal year, the first fiscal quarter contains sixteen weeks and the second, third and fourth fiscal quarters each contain twelve weeks. In a 53-week fiscal year, the first fiscal quarter contains sixteen weeks, the second and third fiscal quarters each contain twelve weeks, and the fourth fiscal quarter contains thirteen weeks. Fiscal year 2025 and fiscal year 2024 were 52-week periods that ended on December 28, 2025 and December 29, 2024, respectively. 44 Table of Contents Historically, seasonal factors have caused our revenue to fluctuate from quarter to quarter. Our revenue per restaurant is typically lower in the first and fourth fiscal quarters due to reduced traffic as a result of colder temperatures and the holiday season. As a result of these factors and the differences among our fiscal quarters, our quarterly operating results and Same Restaurant Sales, as well as other key performance measures, may fluctuate significantly from quarter to quarter and our results for any one quarter are not indicative of any other quarter. Key Performance Measures In assessing the performance of our business, in addition to considering a variety of measures in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), our management team also considers a variety of other key performance measures, including non-GAAP measures. The key performance measures used by our management for determining how our business is performing are detailed below. We believe that these key performance measures provide useful information to users of our financial statements in understanding and evaluating our results of operations in the same manner as our management team. The presentation of these key performance measures, including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income and Adjusted Net Income margin, which are non-GAAP financial measures, are not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. See “Non-GAAP Financial Measures” below. The following table sets forth our key performance measures for the fiscal years indicated: ($ in thousands) 2025 2024 Change CAVA Revenue $ 1,169,286  $ 954,273  $ 215,013  Same Restaurant Sales 4.0  % 13.4  % (9.4) % AUV1 $ 2,934  $ 2,865  $ 69  CAVA Restaurant-Level Profit $ 285,044  $ 238,113  $ 46,931  CAVA Restaurant-Level Profit Margin 24.4  % 25.0  % (0.6) % Net New CAVA Restaurant Openings 72  58  14  Digital Revenue Mix 37.9  % 36.4  % 1.5  % Net income $ 63,743  $ 130,319  $ (66,576) Adjusted EBITDA2 $ 152,760  $ 126,248  $ 26,512  Adjusted Net Income2 $ 63,743  $ 50,219  $ 13,524  Net income margin 5.4  % 13.5  % (8.1) % Adjusted EBITDA margin2 12.9  % 13.1  % (0.2) % Adjusted Net Income margin2 5.4  % 5.2  % 0.2  % __________________ 1    Presented on a trailing thirteen period basis. For purposes of calculating AUV for fiscal 2025, the applicable measurement period is the trailing thirteen periods ended December 28, 2025. For purposes of calculating AUV for fiscal 2024, the applicable measurement period is the trailing thirteen periods ended December 29, 2024. 2    See “Non-GAAP Financial Measures” below for a discussion of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income margin and reconciliations of Adjusted EBITDA and Adjusted Net Income to net income, the most directly comparable GAAP measure. Adjusted EBITDA margin and Adjusted Net Income margin are Adjusted EBITDA and Adjusted Net Income as a percentage of revenue, respectively. CAVA Revenue CAVA Revenue represents all revenue attributable to CAVA restaurants in the specified period, excluding restaurants operating under licensing agreements. We use CAVA Revenue to evaluate and track the aggregate sales of food and beverages in CAVA restaurants. Several factors affect CAVA Revenue in any given period, including the number of CAVA restaurants in operation, Guest Traffic, menu prices, and product mix. Same Restaurant Sales Same Restaurant Sales 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). We use Same Restaurant Sales to assess the performance of 45 Table of Contents existing CAVA restaurants that have been open for 365 days or longer, as the impact of new restaurant openings is excluded. Average Unit Volume (AUV) AUV represents total revenue of operating CAVA Restaurants that were open for the entire trailing thirteen periods and includes sales from Digital Kitchens for such period, divided by the number of operating CAVA Restaurants that were open for the entire trailing thirteen periods. We use AUV to assess and understand changes in guest spending patterns and the overall performance of operating restaurants open for the entire period. AUV is impacted by changes in Guest Traffic, menu prices, and product mix. We gather daily sales data and regularly analyze our Guest Traffic and the mix of menu items sold to aid in developing menu pricing, food offerings, and other strategies designed to grow AUV. CAVA Restaurant-Level Profit and CAVA Restaurant-Level Profit Margin CAVA Restaurant-Level Profit represents CAVA Revenue in the specified period less food, beverage, and packaging, labor, occupancy, and other operating expenses, excluding depreciation and amortization. CAVA Restaurant-Level Profit excludes pre-opening costs. We use CAVA Restaurant-Level Profit as a segment measure of profit and loss. CAVA Restaurant-Level Profit Margin represents CAVA Restaurant-Level Profit as a percentage of CAVA Revenue. We use CAVA Restaurant-Level Profit and CAVA Restaurant-Level Profit Margin as measures of CAVA restaurants’ profitability. CAVA Restaurant-Level Profit and CAVA Restaurant-Level Profit Margin are not indicative of the overall results of the Company and do not accrue directly to the benefit of our stockholders, as corporate-level expenses are excluded from such measures. CAVA Restaurants The following table details CAVA Restaurants for the fiscal years indicated: 2025 2024 Beginning of period 367  309  New CAVA Restaurant openings 73  59  Permanent closure (1) (1) End of period 439  367  Digital Revenue Mix Digital Revenue Mix represents the portion of CAVA Revenue related to Digital Orders as a percentage of total CAVA Revenue. Digital Orders are those made through our catering and digital channels, such as the CAVA app and the CAVA website, and include orders fulfilled through third-party marketplace and native delivery and Digital Order pick-up. We use Digital Revenue Mix to evaluate and track the effectiveness of our coordinated digital infrastructure and network of delivery partners. We charge increased prices for delivery orders to account for the delivery fees and commissions payable by us to our third-party delivery partners and therefore are generally agnostic between in-restaurant and digital sales, as it relates to profitability. Adjusted EBITDA and Adjusted EBITDA Margin Adjusted EBITDA is net income adjusted to exclude interest income, net, provision for (benefit from) 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 executive transition costs. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of revenue. We use Adjusted EBITDA and Adjusted EBITDA Margin to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other peer companies using similar measures. See “Non-GAAP Financial Measures” below for a reconciliation of Adjusted EBITDA to net income. Adjusted Net Income and Adjusted Net Income Margin 46 Table of Contents Adjusted Net Income is net income adjusted to exclude the net benefit from the VA Release. Adjusted Net Income margin is Adjusted Net Income as a percentage of revenue. We use Adjusted Net Income and Adjusted Net Income margin to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other peer companies using similar measures. See “Non-GAAP Financial Measures” below for a reconciliation of Adjusted Net Income to net income. Components of Results of Operations Revenue includes sales of food and beverage in our CAVA restaurants and CPG sales. Food, beverage, and packaging consists primarily of food, beverage, and packaging costs, including manufacturing costs and costs associated with our production facilities. The components of food, beverage, and packaging are variable in nature, increase as sales volumes increase, and are influenced by sales mix, commodity costs, and inflation. Labor includes all restaurant-level management and hourly labor costs, including salaries, wages, benefits, bonuses, payroll taxes, and other indirect labor costs. Factors that influence labor costs include the minimum wage in the jurisdictions in which we operate, payroll tax legislation, inflation, the strength of the labor market for hourly Team Members, benefits costs, healthcare costs, and the number, size, and location of our restaurants. As we open new restaurants, we typically incur higher labor following the initial opening of such restaurant due to increased training costs. We expect labor to increase in the aggregate as we continue to open new restaurants. Occupancy consists of restaurant-level occupancy including rent, common area expenses, real estate and other taxes, and disposal fees. Occupancy excludes expenses associated with unopened restaurants, which are recorded in pre-opening costs and expenses related to our collaboration and support centers, which are recorded in general and administrative expenses. Occupancy varies from location to location and is impacted by macroeconomic conditions, including inflation. We expect occupancy to increase in the aggregate as we continue to open new restaurants but to decrease as a percentage of revenue in the long-term as we continue to leverage higher Same Restaurant Sales. Other operating expenses include all other restaurant-level operating expenses, such as kitchen supplies, utilities, repairs and maintenance, travel costs, credit card and bank fees, recruiting, third-party delivery service fees, marketing expenses, and costs associated with our distribution network. General and administrative expenses include expenses associated with our Collaboration Center Organization which supports the development and operation of restaurants, including compensation and benefits, legal and professional fees, equity-based compensation, technology fees, travel expenses, marketing expenses, and rent and other costs related to the facilities in our Collaboration Center Organization. We expect general and administrative expenses to increase in the aggregate as we continue to expand our business but to decrease as a percentage of revenue in the long-term. Depreciation and amortization primarily consists of depreciation of assets related to CAVA restaurants and our production facilities, including leasehold improvements and equipment, as well as technology improvements. Pre-opening costs consist primarily of expenses incurred prior to opening a new restaurant and are made up primarily of manager salaries, payroll and training costs, travel costs, supplies, relocation costs, and recruiting expenses. Pre-opening costs also include occupancy costs recorded during the period between the date of possession and the date we begin operations at a location. Pre-opening costs are expensed as incurred. Impairment and asset disposal costs consist of losses recognized on the write-down of the carrying value of property and equipment, net and operating lease assets and the loss on disposal of assets. Interest income, net includes interest income from investments in fixed income debt securities and money market funds, partially offset by cash and non-cash charges related to our 2022 Credit Facility, including the amortization of debt issuance costs. Provision for (benefit from) income taxes represents federal and state current and deferred income tax expense. 47 Table of Contents Results of Operations Our results of operations, on a consolidated basis and by segment, for fiscal 2025 and 2024 are set forth below. Comparison of Fiscal 2025 and 2024 Consolidated Results The following table summarizes our consolidated results of operations for the fiscal years indicated: 2025 2024 Change ($ in thousands) $ % of Revenue $ % of Revenue $ % Revenue $ 1,179,664  100.0  % $ 963,713  100.0  % $ 215,951  22.4  % Operating expenses: Restaurant operating costs (excluding depreciation and amortization) Food, beverage, and packaging 352,778  29.9  284,743  29.5  68,035  23.9  Labor 301,861  25.6  247,490  25.7  54,371  22.0  Occupancy 83,576  7.1  69,851  7.2  13,725  19.6  Other operating expenses 150,982  12.8  119,824  12.4  31,158  26.0  Total restaurant operating expenses 889,197  75.4  721,908  74.9  167,289  23.2  General and administrative expenses 137,462  11.7  120,500  12.5  16,962  14.1  Depreciation and amortization 73,661  6.2  60,355  6.3  13,306  22.0  Restructuring and other costs —  —  580  0.1  (580) (100.0) Pre-opening costs 19,134  1.6  12,197  1.3  6,937  56.9  Impairment and asset disposal costs 4,925  0.4  5,055  0.5  (130) (2.6) Total operating expenses 1,124,379  95.3  920,595  95.5  203,784  22.1  Income from operations 55,285  4.7  43,118  4.5  12,167  28.2 Interest income, net (15,045) (1.3) (16,474) (1.7) 1,429  (8.7) Other income, net (469) —  (318) —  (151) 47.5  Income before taxes 70,799  6.0  59,910  6.2  10,889  18.2 Provision for (benefit from) income taxes 7,056  0.6  (70,409) (7.3) 77,465  (110.0) Net income $ 63,743  5.4  % $ 130,319  13.5  % $ (66,576) (51.1)% Revenue, Food, beverage, and packaging, Labor, Occupancy, and Other operating expenses: The increases in Revenue, Food, beverage, and packaging, Labor, Occupancy, and Other operating expenses are primarily driven by the growth of our CAVA Segment. Refer to “CAVA Segment Results” below for more information. General and Administrative Expenses The increase in general and administrative expenses was primarily due to investments to support future growth, including our CAVA Connect conference, higher equity-based compensation, and executive transition costs, partially offset by lower performance-based incentive compensation. As a percentage of revenue, general and administrative expenses decreased primarily due to leverage from higher sales and the net impact of the items noted above. Depreciation and Amortization The increase in depreciation and amortization was primarily driven by the addition of assets from 130 Net New CAVA Restaurant Openings during or subsequent to fiscal 2024 and technology improvements. Pre-opening Costs The increase in pre-opening costs was due to a higher volume of new CAVA restaurants under construction and higher costs on a per unit basis. 48 Table of Contents Interest Income, Net The decrease in interest income, net, was due to lower interest rates on investments in fixed income debt securities and money market funds in the current year, partially offset by higher balances in these investments. Provision For (Benefit From) Income Taxes The effective income tax rate for fiscal 2025 was 10.0%, which includes the permanent benefit associated with the vesting of restricted stock units (“RSUs”) and exercise of stock options above grant date fair values. The effective tax rate for fiscal 2024 was not meaningful due to the impact of the valuation allowance. The benefit from income taxes in fiscal 2024 was primarily driven by the VA Release. Excluding the net benefit of the VA Release of $80.1 million, the effective tax rate in fiscal 2024 would have been 16.2%. The permanent benefit associated with equity-based compensation was higher in fiscal 2025 compared with fiscal 2024 primarily due to a higher stock price on the applicable dates that RSUs vested and stock options were exercised. Net Income Our net income decreased primarily due to the benefit of the VA Release in the prior year and higher depreciation and amortization, partially offset by higher operating performance. CAVA Segment Results The following table summarizes the results of the CAVA segment for the fiscal years indicated: 2025 2024 Change ($ in thousands) $ % of Revenue $ % of Revenue $ % Restaurant revenue $ 1,169,286  100.0  % $ 954,273  100.0  % $ 215,013  22.5  % Restaurant operating expenses (excluding depreciation and amortization): Food, beverage, and packaging 348,684  29.8  279,741  29.3  68,943  24.6  Labor 301,861  25.8  247,490  25.9  54,371  22.0  Occupancy 83,576  7.1  69,851  7.3  13,725  19.6  Other operating expenses 150,121  12.8  119,078  12.5  31,043  26.1  Total restaurant operating expenses 884,242  75.6  716,160  75.0  168,082  23.5  Restaurant-level profit $ 285,044  24.4  % $ 238,113  25.0  % $ 46,931  19.7  % CAVA Revenue The increase in CAVA Revenue was primarily due to a $175.5 million increase from the 130 Net New CAVA Restaurant Openings during or subsequent to fiscal 2024. The remainder of the increase in CAVA Revenue was driven by growth in Same Restaurant Sales of 4.0%, which consists of 2.4% from menu price and product mix and 1.6% from Guest Traffic. CAVA Food, Beverage, and Packaging The increase in CAVA food, beverage, and packaging was primarily due to a $53.8 million increase from the 130 Net New CAVA Restaurant Openings during or subsequent to fiscal 2024. The remainder of the increase was primarily due to Same Restaurant Sales growth of 4.0%. As a percentage of CAVA Revenue, CAVA food, beverage, and packaging increased primarily due to input costs associated with the launch of grilled steak in the second quarter of fiscal 2024, the impact of tariffs, and our limited-time only chicken shawarma offering in the third and fourth quarters of fiscal 2025. CAVA Labor The increase in CAVA labor was primarily due to the 130 Net New CAVA Restaurant Openings during or subsequent to fiscal 2024. The remainder of the increase was primarily due to the impact of higher average hourly wages of approximately 2%. As a percentage of CAVA Revenue, CAVA labor decreased due to the impact of higher sales, partially offset by the aforementioned incremental wage investments. 49 Table of Contents CAVA Occupancy The increase in CAVA occupancy was primarily due to the 130 Net New CAVA Restaurant Openings during or subsequent to fiscal 2024. As a percentage of CAVA Revenue, CAVA occupancy decreased primarily due to operating leverage associated with higher sales. CAVA Other Operating Expenses The increase in CAVA other operating expenses was primarily due to the 130 Net New CAVA Restaurant Openings during or subsequent to fiscal 2024 and Same Restaurant Sales growth of 4.0%. As a percentage of CAVA Revenue, CAVA other operating expenses increased due to a higher mix of third-party delivery, insurance costs, and other individually insignificant items, partially offset by operating leverage associated with higher sales. Other Results The following table summarizes remaining activity primarily related to our CPG operations for the fiscal years indicated: 2025 2024 Change ($ in thousands) $ % of Revenue $ % of Revenue $ % Revenue $ 10,378  100.0  % $ 9,440  100.0  % $ 938  9.9  % Food, beverage, and packaging 4,094  39.4  5,002  53.0  (908) (18.2) Other operating expenses 861  8.3  746  7.9  115  15.4  The increases noted above were primarily a result of increased CPG sales. As a percentage of revenue, food, beverage, and packaging decreased due to operational efficiencies realized since the commencement of operations at our facility in Verona, VA in the first quarter of fiscal 2024. Non-GAAP Financial Measures In addition to our consolidated financial statements, which are prepared in accordance with GAAP, we present Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income margin as supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP. We believe these non-GAAP financial measures assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our operating performance. Management believes Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income margin are useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate, and capital investments. Management uses Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income margin to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other peer companies using similar measures. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone provide. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income margin are not recognized terms under GAAP and should not be considered as alternatives to net income or net income margin as measures of financial performance, or cash provided by operating activities as measures of liquidity, or any other performance measure derived in accordance with GAAP. Additionally, these measures are not intended to be measures of free cash flow available for management’s discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments, and debt service requirements. Because not all companies use identical calculations, the presentation of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income margin measures have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of our results as reported under GAAP. Some of these limitations are: •Adjusted EBITDA and Adjusted Net Income do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; 50 Table of Contents •Adjusted EBITDA and Adjusted Net Income do not reflect changes in, or cash requirements for, our working capital needs; •Adjusted EBITDA and Adjusted Net Income do not reflect financing activities of our business; •Adjusted EBITDA does not reflect period to period changes in taxes, income tax expense, or the cash necessary to pay income taxes; •Adjusted EBITDA does not reflect the impact of earnings or cash charges resulting from matters we consider not to be indicative of our ongoing operations; •although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; and •other companies in our industry may calculate Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income margin differently than we do, limiting their usefulness as comparative measures. Because of these limitations, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Net Income margin should not be considered as measures of discretionary cash available to invest in business growth or to reduce any applicable indebtedness. The following table provides a reconciliation of net income to Adjusted EBITDA and net income margin to Adjusted EBITDA margin: (in thousands) 2025 2024 Net income $ 63,743  $ 130,319  Non-GAAP Adjustments Interest income, net (15,045) (16,474) Provision for (benefit from) income taxes 7,056  (70,409) Depreciation and amortization 73,661  60,355  Equity-based compensation 18,057  17,140  Other income, net (469) (318) Impairment and asset disposal costs 4,925  5,055  Restructuring and other costs —  580  Executive transition costs1 832  —  Adjusted EBITDA $ 152,760  $ 126,248  Revenue $ 1,179,664  $ 963,713  Net income margin2 5.4  % 13.5  % Adjusted EBITDA margin 12.9  % 13.1  % __________________ 1    Includes costs associated with the separation of the Company’s Chief Operations Officer. 2    Net income margin for fiscal 2024 includes the impact of the $80.1 million benefit from the VA Release. 51 Table of Contents The following table provides a reconciliation of net income to Adjusted Net Income and net income margin to Adjusted Net Income margin: (in thousands) 2025 2024 Net income $ 63,743  $ 130,319  Non-GAAP Adjustments Tax benefit from VA Release —  (80,100) Adjusted Net Income $ 63,743  $ 50,219  Revenue $ 1,179,664  $ 963,713  Net income margin1 5.4  % 13.5  % Adjusted Net Income margin 5.4  % 5.2  % __________________ 1    Net income margin for fiscal 2024 includes the impact of the $80.1 million benefit from the VA Release. Liquidity and Capital Resources We assess our liquidity in terms of our ability to generate adequate amounts of cash to meet current and future needs. Our expected primary uses on a short- and long-term basis are for the expansion of our restaurant base, working capital, and other capital expenditures including investments in technology and the expansion of our manufacturing capabilities. Total capital expenditures for fiscal 2026 are expected to be higher than fiscal 2025. We believe that cash provided by operating activities and existing cash on hand, together with amounts available under our 2022 Credit Facility, will be sufficient to satisfy our anticipated cash requirements for the next twelve months and foreseeable future, including our expected capital expenditures for expansion of our CAVA restaurant base, operating lease obligations, and other working capital obligations. See Item 8. “Financial Statements and Supplementary Data,” Note 7 (Debt) and Note 9 (Leases) to our consolidated financial statements for more information. Our sources of liquidity could be affected by factors described Part I, Item 1A. “Risk Factors”. Depending on the severity and direct impact of these factors on us, we may not be able to secure additional financing on acceptable terms, or at all. Cash Overview We had cash and cash equivalents of $282.9 million and $366.1 million as of December 28, 2025 and December 29, 2024, respectively. In addition, we had investments in fixed income debt securities of $110.1 million as of December 28, 2025. For fiscal 2025, our operations were funded from cash flows from operations. Our principal uses of liquidity for fiscal 2025 were to fund new restaurant openings and working capital needs. Cash Flows The following table summarizes our cash flows for the fiscal years indicated: Change ($ in thousands) 2025 2024 $ % Net cash provided by operating activities $ 184,840  $ 161,027  $ 23,813  14.8  % Net cash used in investing activities (273,038) (108,131) (164,907) 152.5  % Net cash provided by (used in) financing activities 4,995  (19,204) 24,199  (126.0) % Net change in cash and cash equivalents $ (83,203) $ 33,692  $ (116,895) N/M __________________ N/M        Data not meaningful Operating Activities The increase in net cash provided by operating activities was primarily due to improved operating performance, partially offset by working capital changes. 52 Table of Contents Investing Activities The increase in net cash used in investing activities was primarily due to launching an investment portfolio of fixed income debt securities to optimize returns on our cash balance, higher capital expenditures related to new CAVA restaurant openings, and an investment in a convertible promissory note described in Item 8. “Financial Statements and Supplementary Data,” Note 4 (Investments). Financing Activities The change in net cash provided by (used in) financing activities was primarily due to decreased tax withholding obligations arising from the vesting of RSUs. Material Cash Commitments The following table summarizes current and long-term material cash requirements as of December 28, 2025, which we expect to fund primarily with operating cash flows: Payments Due by Fiscal Year (in thousands) Total 2026 2027-2028 2029-2030 Thereafter Operating leases1 $ 624,878  $ 77,297  $ 154,614  $ 137,963  $ 255,004  Purchase obligations2 22,064  22,064  —  —  —  __________________ 1    Refer to Item 8. “Financial Statements and Supplementary Data,” Note 9 (Leases) for more information on our operating leases. 2    Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on us and that specify all significant terms. We have excluded agreements that are cancellable without penalty. The majority of our purchase obligations relate to amounts owed for produce and other ingredients and supplies, including supplies and materials used for new restaurant openings. Credit Facility Refer to Item 8. “Financial Statements and Supplementary Data,” Note 7 (Debt), for a description of our 2022 Credit Facility. The Company expects to amend and upsize its 2022 Credit Facility in the first quarter of 2026. In connection with the closing of the amendment, the Company does not expect to immediately borrow funds under the new credit facility. Critical Accounting Estimates Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent asset and liabilities as of the balance sheet date, as well as the reported amounts of revenue and expenses during the period. We base our estimates on historical experience, known trends and events, as well as management’s judgment. Although management believes the judgment applied in preparing estimates is reasonable based on circumstances and information known at the time, actual results could vary materially from the estimates based on assumptions used in the preparation of our financial statements. We evaluate our judgments and estimates on an ongoing basis in light of changes in circumstances, facts, and experience. The effects of material revisions in estimates, if any, are reflected in the financial statements prospectively from the date of change in estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected. We believe that the following critical accounting policies involve a greater degree of judgment and complexity than our other significant accounting policies. Accordingly, these are the policies we believe are the most critical to understanding when evaluating our consolidated financial condition and results of operations. Our significant accounting policies are more fully described in Note 2 (Basis of Presentation and Significant Accounting Policies) to our consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.” Leases The Company makes judgments regarding the probable term for each lease, which can impact the classification and accounting for a lease as well as the amount of straight-line rent expense recognized in a period. Typically, restaurant leases have initial terms of ten years and include five-year renewal options. Renewal options are typically not included in the lease term as it is not reasonably certain at commencement that we will exercise the options. Restaurant leases provide for fixed minimum rent payments and in some cases include contingent rent payments based upon sales in excess of 53 Table of Contents specified breakpoints. When achievement of sales breakpoints is probable, contingent rent is accrued. Fixed minimum rent payments are recognized on a straight-line basis over the lease term starting on the date we take control of the leased space. Operating lease assets and liabilities are recognized at the lease’s commencement date. We measure the lease liability at lease commencement by discounting the future minimum lease payments. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments, initial direct costs, lease incentives, and impairment. As the rate implicit in the lease is not readily determinable in most of the Company’s leases, the Company uses its incremental borrowing rate based on the information available at a lease’s commencement date to determine the present value of lease payments. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. Income Taxes The Company is taxed as a C corporation under which income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities, reflecting the impact of net operating loss carryforwards and the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The factors used to assess the likelihood of realization include the Company’s historical and forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. The Company has assessed the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective positive evidence evaluated is the cumulative income earned over the most recent three-year period. Such objective evidence in addition to other subjective evidence, such as our projections for future growth, supports a more likely than not conclusion that all deferred tax assets will be realized. On the basis of this evaluation, the full valuation allowance was released in fiscal 2024, as further described in Item 8. “Financial Statements and Supplementary Data,” Note 7 (Income Taxes). For fiscal 2025, the Company continues to maintain this conclusion. Key assumptions utilized within the projections include the Company’s sales, growth rates, gross margins, operating expenses in relation to the current economic conditions and the Company’s future expectations, market competition, inflation, consumer trends, and other relevant economic factors. The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or if objective positive evidence in the form of cumulative income is no longer present. Equity-based Compensation The Company has issued stock options and RSUs. Equity-based compensation expense is measured based on the grant date fair value of those awards and is recognized on a straight-line basis over the requisite service period. Equity-based compensation expense is based on awards outstanding, and forfeitures are recognized as they occur. The Company uses the Black-Scholes-Merton (“Black-Scholes”) option-pricing model to estimate the fair value of stock options at the grant date. The use of the Black-Scholes option-pricing model requires the use of subjective assumptions, including the expected term, risk-free interest rate, expected volatility, and expected dividend yield of the underlying common stock. The fair value of RSUs is equal to the fair value of our common stock at the date of grant. Recent Accounting Pronouncements Refer to Item 8. “Financial Statements and Supplementary Data,” Note 2 (Basis of Presentation and Significant Accounting Policies).