Company: CAVA
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001628280-25-049080
Chunk: 47

Company: CAVA GROUP, INC.
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 8
Chunk 47
---
2025, the Company was in compliance with these financial and other covenants, and the Company had no borrowings under the 2022 Credit Facility.

7.    INCOME TAXES

Income taxes for the twelve and forty weeks ended October 5, 2025 have been included in the accompanying unaudited condensed consolidated financial statements on the basis of an estimated annual effective tax rate. In addition to the amount of tax resulting from applying the estimated annual effective tax rate to pre-tax income, the Company includes, when appropriate, certain items treated as discrete events to arrive at an estimated overall tax amount. The effective income tax rate for the twelve weeks ended October 5, 2025 was 28.6%. The effective income tax rate for the forty weeks ended October 5, 2025 was 9.1% due to a $12.6 million reduction to income tax expense associated with equity-based compensation. The effective tax rate for the twelve and forty weeks ended October 6, 2024 was (0.3)% and 0.9%, 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”), introducing significant amendments to the U.S tax legislation, 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. 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 

11

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