CAVA’s hot streak isn’t cooling off. While many restaurants face traffic declines, the fast casual continues to outperform, closing out fiscal 2024 with ongoing growth and resilience.
Highlights from Q4 include a 36.8 percent increase in revenue and 21.2 percent same-store sales growth, driven by net new restaurant openings and a 15.6 percent increase in traffic. Restaurant-level profit margin improved 50 basis points year-over-year to 22.4 percent.
The chain delivered four consecutive quarters of free cash flow in its first full year as a public company. Revenue was up 35 percent for the year, with comps up 13.4 percent and traffic up 8.7 percent. AUVs jumped to $2.9 million from $2.6 million in fiscal 2023.
“It is clear that our unique value proposition, the quality and relevance of our Mediterranean cuisine, the convenience of our multichannel format, and the experiences we provide across our physical and digital channels is meeting the moment for the modern consumer,” co-founder and CEO Brett Schulman said during the company’s Q4 earnings call on Tuesday.
He emphasized value as a key factor in CAVA’s success. While guests have remained loyal, the brand has also been mindful of pricing, keeping increases in check to maintain accessibility.
From the end of 2019 to the end of 2024, CAVA raised prices by about 15 percent in aggregate. The Consumer Price Index was up 23 percent during the same period. That means the chain has so far underpriced inflation by 8 points.
“When you look at the Department of Labor Statistics, traditional fast food is upward of the mid-30s,” Schulman said. “So, we’re not even half of that price increase, which certainly has amplified our value proposition from a price standpoint.”
He added that the company doesn’t expect to take any pricing beyond the 1.7 percent it took in January, “which is still under the expected CPI for this year and what we’ve already seen some peers take.”
CAVA netted 15 new restaurants in Q4 and ended 2024 with 367 total units, up 18.8 percent year-over-year. Schulman said 2024 is trending to be one of the strongest new restaurant classes yet. The brand’s most anticipated and successful market opening to date, Chicago, marked its entry into the Midwest and expanded its presence into 25 states and Washington, D.C.
The brand has ample whitespace to continue growing in both new and existing markets. Entry into South Florida is on the horizon for 2025. It also is gearing up to expand in the Midwest with openings in Detroit and Indianapolis later this year. And it will continue to grow its Mid-Atlantic footprint with its first openings in Pittsburgh, Pennsylvania.
CFO Tricia Tolivar said new units are exceeding economic expectations with year two cash-on-cash returns of at least 40 percent. Looking ahead to 2025, CAVA plans to open 62 to 66 restaurants for a net new-unit growth rate of at least 17 percent.
As it moves forward with those expansion efforts, Schulman said the team will keep its focus on deepening personal relationships with customers, whether they’re gathering in dining rooms or engaging with digital channels. To that end, many recent and upcoming locations incorporate elements of CAVA’s Project Soul design, including softer seating, more greenery, and a warmer brand palette.
With Project Soul, the brand is doubling down on its focus on hospitality, which it sees as an increasingly powerful differentiator.
“Sixty-four percent of guests come in and want to engage with a team member,” Schulman said. “The ability for our team members to connect and deliver that Mediterranean hospitality while they’re having that walk-the-line experience—smelling the food, seeing the food, hearing it cook—is powerful.”
He added that it all comes together to help the brand capture guests that are trading down from a legacy casual dining experience. At the same time, digital channels and convenience-based formats help capture guests who are trading up from traditional QSR for a few dollars more—and sometimes at parity.
“We have so many different ways to win with all different types of geographies and trade areas—urban, suburban, college adjacent, ex-urban, pickup-by-car location,” Schulman said. “It allows us to create this balanced portfolio approach and then obviously capture the energy in these markets that’s been building around the brand.”
CAVA’s reimagined loyalty program is another key part of that mission to create deeper connections with guests. The company has seen a 230-basis-point increase in loyalty sales since it launched an improved version of its loyalty program in October. Schulman said the new earn and bank points model has been warmly received, driving increased engagement and frequency while setting the stage for future innovation.
“Over half of the reward redemptions have come from our entry-level reward option in the catalog of menu rewards,” he said. “That was the goal of the program. We wanted that initial reward opportunity bar to be lower, so people felt like it was more attainable and our lower-frequency users would be more engaged. We’re seeing that happen.”
The company will continue building on the platform by leveraging first-party data to deepen guest insights using enhanced rewards, tiers, and tailored communications in 2025.
CAVA also is investing in new technology to improve the employee experience as part of its multi-year Connected Kitchen initiative. Its new labor and deployment model optimizes staffing by aligning forecasted hours with team tasks, channel mix, and revenue patterns. While still in early stages, Schulman noted the initiative is already driving productivity gains across dayparts.
Initial results from a new kitchen display system—currently live in 25 locations—are promising, too. The technology is improving digital order accuracy and productivity while reducing customer experience complaints in test locations. CAVA is planning a broader rollout of the new KDS in 2025. Including new and existing restaurants, it expects to expand the technology to 250 restaurants by the end of the year.
The Connected Kitchen initiative also includes a generative AI video technology that monitors how quickly ingredients on the in-restaurant makeline are being depleted and alerts the team in real time for prep and cook batch amounts. That technology currently is live in a handful of stores, with more slated for the year ahead
“In a world where screens and automation are infiltrating our everyday lives, we remain committed to using technology to enhance the human experience, not replace it,” Schulman said. “We’re leveraging data personalization to help people feel seen for who they are and piloting AI technology that can improve team members’ experience and give them more time to take care of our guests. As the spaces and experiences that once brought us together are being replaced by virtual interactions, we are creating inviting places for people to gather. We know consumers are hungry to feel cared for, and we believe that our success is driven not just by our category-defining brand and our unique value proposition, but also by our ability to authentically connect with the people we serve.”
