Company: CAVA
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001628280-25-007882
Chunk: 187

Company: CAVA GROUP, INC.
Filing Date: 2025-02-26
Form: 10-K
Item: Item 1
Chunk 187
---
 2024, the Company was in compliance with these financial and other covenants.

7.    INCOME TAXES

At December 29, 2024, the Company assessed the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of existing deferred tax assets (“DTAs”). A significant piece of objective positive evidence evaluated was the cumulative income earned over the three-year period ended December 29, 2024. Such objective evidence, in addition to forecasted future taxable income and available tax planning strategies that could be implemented, were determined to support that it is more likely than not the existing DTAs will be realized. On the basis of this evaluation, as of December 29, 2024, the valuation allowance against the DTAs of $83.7 million was fully released.The Company generates all of its income before taxes in the United States. The (benefit from) provision for income taxes consists of the following for the fiscal years indicated:(in thousands)202420232022Current:Federal$— $— $— State1,207 718 88 Subtotal current1,207 718 88 Deferred:Federal(56,021)20 2 State(15,595)30 3 Subtotal deferred(71,616)50 5 (Benefit from) provision for income taxes$(70,409)$768 $93 

75

The (benefit from) provision for income taxes differs from the amount computed by applying the U.S. federal statutory income tax rate to income (loss) before taxes for the reasons set forth below for the fiscal years indicated:(in thousands)202420232022Income tax expense (benefit) at federal statutory rate$12,581 $2,950 $(12,323)State income tax expense (benefit)5,931 996 (1,885)(Decrease) increase in valuation allowance(83,662)(4,699)13,428 Deferred taxes— 1,032 1,318 Equity-based compensation(5,251)(556)(541)Nondeductible executive compensation227 915 — Other permanent adjustments(235)130 96 (Benefit from) provision for income taxes$(70,409)$768 $93 As a result of the release of the valuation allowance, the Company recorded a deferred tax liability related to the federal tax impact of its state deferred tax assets, which