Company: CAVA
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001639438-25-000007
Chunk: 47

Company: CAVA GROUP, INC.
Filing Date: 2025-08-13
Form: 10-Q
Item: Item 8
Chunk 47
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. The effective income tax rate for the twelve and twenty-eight weeks ended July 13, 2025 was 22.5% and (0.0)%, respectively, due to a $1.7 million and $12.4 million reduction to income tax expense associated with equity-based compensation. The effective tax rate for the twelve and twenty-eight weeks ended July 14, 2024 was 1.4% and 1.6%, respectively, as the amount of income tax expense was immaterial prior to the Company’s release of its valuation allowance against deferred tax assets in the fourth quarter of fiscal 2024.On July 4, 2025, the United States Congress enacted H.R.1, commonly referred to as the One Big Beautiful Bill Act (“The Act”). The Act introduces significant tax reform measures, including extensions and modifications to provisions of the Tax Cuts and Jobs Act. The Act contains multiple effective dates, with certain provisions applicable beginning in 2025 and others phased in over subsequent years. While still evaluating the full impact of The Act, the Company expects future increases in deferred tax liabilities related to property and equipment associated with the reinstatement of 100% bonus depreciation but does not expect a material impact to the estimated annual effective tax rate. The Company will continue to monitor future administrative guidance and regulatory developments that may clarify the application of The Act’s provisions.

8.    LEASES

The Company leases all of its CAVA Restaurants, its digital kitchens, its production facility in Laurel, Maryland, its collaboration center in Washington, D.C., its support centers in Brooklyn, New York and Plano, Texas, and its food distribution center in Edison, New Jersey. The Company determines if a contract contains a lease at inception and 

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determines the classification of a lease, if necessary. Typically, restaurant leases have initial terms of 10 years and include five-year renewal options.Supplemental disclosures of cash flow information related to leases were as follows:Twelve Weeks EndedTwenty-Eight Weeks Ended(in thousands)July 13,2025July 14,2024July 13,2025July 14,2024Cash paid for operating lease liabilities$16,828 $14,134 $32,738 $28,410 Operating lease assets obtained in exchange for operating lease liabilities28,974 13,866 67,120 33,397 Derecognition of operating lease assets due to termination or impairment— — 302 109