Company: CAVA
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001628280-25-007882
Chunk: 179

Company: CAVA GROUP, INC.
Filing Date: 2025-02-26
Form: 10-K
Item: Item 1
Chunk 179
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 180 days, and earned rewards converted from points expire 60 days after they are issued.  The Company records a liability and a corresponding reduction in revenue in periods when loyalty program rewards are earned by members. The Company recognizes revenue and a corresponding reduction to the liability in periods when loyalty program rewards are redeemed by members. The amount of revenue recognized or deferred is based on the stand-alone selling price of the loyalty points multiplied by an estimated redemption rate. The Company determines the stand-alone selling price of loyalty points based on the estimated value of the products for which a reward is expected to be redeemed.

70

Advertising and Marketing Costs—Advertising and marketing costs are expensed as incurred. Advertising and marketing costs totaled $8.8 million, $6.1 million, and $7.1 million during fiscal 2024, 2023, and 2022, respectively, and are distributed among general and administrative expenses, other operating expenses, and pre-opening costs in the accompanying consolidated statements of operations.Restructuring and Other Costs—Restructuring and other costs consist mainly of expenses related to our Zoes Kitchen conversion strategy, public company readiness costs prior to the IPO, and costs related to our restaurant collaboration center relocation. The liability relating to restructuring costs as of December 29, 2024 and December 31, 2023 was not material.Pre-opening Costs—Pre-opening costs consist of expenses incurred prior to opening a new restaurant (including new restaurants that were converted from a Zoes Kitchen location) 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.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. As of December 31, 2023 the Company had recorded a