CAVA Group, Inc.

Good afternoon, ladies and gentlemen, and welcome to the CAVA Q3 2025 earnings call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press zero for the operator. This call is being recorded on Tuesday, November 4th, 2025. I would now like to turn the conference over to Matt Milanovich, Head of Investor Relations. Please go ahead.

Good afternoon, and welcome to CAVA's third quarter 2025 financial results conference call. Before we begin, if you do not already have a copy, the earnings released and related 8K furnished to the SEC are available on our website at investor.cava.com. The purpose of this conference call was to give investors further details regarding the company's financial results, as well as a general update on the company's progress. You will find reconciliations of any non-GAAP financial measure discussed on today's call to the most directly comparable financial measure, calculated in accordance with GAAP to the extent available without unreasonable efforts in today's earnings release and supplemental deck, each of which is posted on the company's website. Before we begin, let me remind everyone that this call will contain forward-looking statements. For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements. Investors should be aware that any forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those discussed here today. These risk factors are explained in detail in COPPA's most recent annual report on Form 10-K, as may be updated by its reports on Form 10-Q and other filings with the SEC. Please refer to these filings for a more detailed discussion of forward-looking statements and the risks and uncertainties of such statements. All forward-looking statements are made as of today and accepted as required by law, CAFA undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments, or otherwise. And now I'll turn the call over to the company's co-founder and CEO, Brett Shulman. Thanks, Matt, and welcome to the call, everyone.

During the third quarter of 2025, we continue to strengthen our leadership in Mediterranean, a category we have pioneered and are rapidly growing while staying true to our mission of bringing heart, health, and humanity to food. As consumers today face a challenging environment, the relevance of Mediterranean cuisine and the way we deliver it at Cava continues to resonate deeply. This differentiation enables strong average unit volumes, consistent value creation, and the structural strength of our model. With growing market share and significant white space ahead, we remain confident and steadfast in our ability to create lasting value, build enduring guest loyalty, and reinforce our position as the clear leader of the Mediterranean category. Our third quarter highlights include a 20% increase in CABA revenue and a 66.8% increase over the last two years. CABA's same restaurant sales growth of 1.9%, restaurant-level profit margin of 24.6%, 17 net new restaurants, ending the quarter with 415 restaurants, a 17.9% increase year over year. Adjusted EBITDA of $40 million, a 19.6% increase over the third quarter of 2024, net income of $14.7 million, and $23.3 million in year-to-date free cash flow. As I've shared in prior quarters, our brand proposition is strong and continues to strengthen, as reflected in our expanding market share. Since 2019, while overall restaurant industry sales have grown, industry transactions have declined. Yet Cava has not only maintained, but increased our market share significantly by delivering on our promise of high-quality food, brand relevance, curated guest experiences, and seamless convenience. During that same timeframe, we have worked relentlessly to make our food more accessible to guests, underpricing CPI by almost 10%, while taking less than half the aggregate 34% price increases of industry peers. At the same time, we recognize that today's environment is creating real pressures for consumers, especially younger guests who are making more deliberate choices about where they spend. It's incumbent upon restaurants to deliver exceptional experiences and differentiated value to guests. That's why the foundation my co-founders and I built 15 years ago is more important than ever. From day one, our aspiration was simple, to make our Mediterranean cuisine accessible to communities across the country, delivering it with welcoming hospitality while serving as a platform for our team members to build a career, not just have employment. This concept essence continues to guide everything we do to this day. As we capture the white space opportunity ahead of us, our growing market share is driven by the intention rooted in our first strategic pillar, expand our Mediterranean way in communities across the country. During the third quarter, we opened 17 net new restaurants, bringing our total restaurant count to 415 locations across 28 states and the District of Columbia. Amongst them was our highly anticipated Brickell opening in Miami. where the energy and enthusiasm from our guests was palpable. A powerful reminder that with every new Cava, we're not just growing our footprint, but also deepening connection and fostering community. Recent openings also highlight Project Soul, a restaurant redesign initiative that brings the Mediterranean way to life through warm tones, greenery, natural light, and softer seating. Design elements that turn our restaurants into welcoming places to dine. The project sole prototype is now finished and the complete design will roll out in new openings next year. And just as our environments invite connection, so do our bold Mediterranean flavors. Earlier this quarter, we introduced our latest protein innovation, chicken shawarma, juicy roasted chicken breast marinated in a signature spice blend and hand stacked on a spit. The launch performed to our market test expectations incidence levels that showed strong guest responsiveness and healthy engagement across our restaurants. Another example of how distinctive, innovative and satisfying flavors rooted in health continue to resonate with our guests. That same spirit of innovation comes through with our recent salmon market test, which has shown encouraging results. Salmon is a natural fit for our menu and represents an exciting milestone as our first ever seafood offering. Our roasted flaky filet, marinated in a subtly sweet blend of pomegranate, barista, red wine vinegar, and bold spices not only complements our Mediterranean flavors beautifully, but also broadens the variety we can offer guests. Early results reaffirm the strong potential we see, and if performance continues, we will plan to expand salmon more broadly across our restaurants in late spring of 2026. While proteins like salmon and chicken shawarma remain a critical focus of our culinary innovation pipeline, we also know that smaller touches can carry just as much weight in keeping our guests excited. Our pita chips are a perfect example. Last month, we introduced cinnamon and sugar pita chips, dusted with cinnamon, sugar, and a hint of cardamom, paired with honey for dipping, a sweet twist on a fan favorite that brings both snacking and dessert occasions to life. Shifting to our second pillar, deep and personal relationships with guests, even as we scale. This past October marked the one-year anniversary of our Rewards Reimagined relaunch. And since then, the program has grown by approximately 36% and has become a key platform for connecting with guests in a more personal, meaningful, and creative ways. Building on that momentum, we recently introduced tiered status levels as the next phase of the program. Through our new sea, sand, and sun structure, members now enjoy differentiated benefits and surprise and delight experiences designed to celebrate their loyalty and strengthen long-term engagement. As an extension of our brand's spirit of generosity, we also launched status matching to welcome new members and encourage deeper participation. While status matching is a first-of-its-kind offering in our industry, we see it simply as another way to express our concept essence. The latest evolution of our program also includes an expanded rewards catalog with seasonal offerings and fresh new ways to engage. With every enhancement, our goal is to create a deeper sense of belonging and continuity for our guests. Whether it's elevating hospitality, improving order accuracy, or better speed of service, at our core is our commitment to building a strong operational foundation. And regardless of near-term cyclical pressures on the consumer, we're doubling down and focusing now more than ever on delivering for the long term with exceptional guest experiences and ensuring that our restaurants are staffed with team members that are equipped, empowered, and trained to run great restaurants every location, every shift, our third strategic pillar. The role technology plays in our restaurants is important, and providing our team members with the tools to deliver consistently great experiences is a key focus area. An initiative in that spirit is our new kitchen display system, which we are now on track to roll out to at least 350 locations by year end, with over 200 restaurants live today. We are continuing to see encouraging results as restaurants with the new KDS are experiencing higher guest satisfaction scores driven by improved digital accuracy and proactive guest order status notification capabilities. In addition to improvements across technology, we're also investing in equipment that makes our restaurants easier to run, such as our Turbo Chef ovens. All Cava restaurants are now equipped with a Turbo Chef oven. These ovens allow for faster, more consistent cook times, enabling simpler execution in our restaurants while elevating food quality. Both the Turbo Chef and KDS investments help reinforce execution in our kitchens while allowing our teams to focus on what matters most, delivering a great guest experience. We are at a meaningful moment in our growth journey, and we know it is crucial to invest in training and developing our team members. Today, I'm excited to introduce our new Flavor Your Future initiative, a holistic team member development program designed to attract, develop, and retain CABA's future leaders. of the first actions under this initiative is the launch of our new assistant general manager program an evolution of our current general manager and training role this role provides more experienced leadership in our restaurants on more shifts throughout the week ensuring a clear number two leader is always in place it will also create a stronger pipeline of role-ready leaders to take on the gm role as we scale and open more restaurants today About 20% of our leaders are ready for immediate elevation, 50% will be role ready with additional training over the next quarter, and the remaining 30% likely sourced externally. The AGM role is just one component of a broader leadership initiative that we are excited to share more about in the quarters ahead. Our commitment to developing team members into restaurant managers remains a core near-term focus, and we're excited about the opportunity to build the next generation of CAVA leaders. You can see the power of that commitment in stories like that of Angelo Miranda at our Millennium location. Angelo started as a team member eager to learn and grow. Under the guidance of his then general manager, Ruben Holguin, he learned the business from the ground up. He developed his leadership skills through consistent coaching, feedback, and belief in his potential. Over the years, that investment has paid off. Today, Angelo leads the same restaurant where he began his journey, now as a general manager, inspiring the next generation of team members to do the same. When I visited Millenia earlier this month, I saw firsthand the culture of growth and pride that Angelo and his team have built. Angelo was quick to introduce me to his high potential team members he is developing as future Cava restaurant leaders. It's a true reflection of what happens when we invest in people and create pathways for them to lead. And Angelo's original GM, Ruben, he is now an area leader overseeing nine restaurants. Our mission is to bring heart, health, and humanity to food, and it continues to drive our strategy, shape our culture, and inspire the work of more than 13,000 team members each day. To our teams and to all of you who share in this journey, thank you. And with that, I'll pass the call off to Tricia to walk you through the financials.