Company: CAVA
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001628280-25-007882
Chunk: 166

Company: CAVA GROUP, INC.
Filing Date: 2025-02-26
Form: 10-K
Item: Item 1
Chunk 166
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 to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Income Taxes - Realizability of Deferred Tax Assets — Refer to Notes 2 and 7 to the financial statements

Critical Audit Matter Description

A valuation allowance is provided when it is more likely than not that some 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. Management has determined that it is more likely than not that the existing deferred tax assets will be realized. On the basis of this evaluation, the Company fully released the valuation allowance against the deferred tax assets of $83.7 million in the fiscal year ended December 29, 2024.  The Company’s deferred tax assets as of December 29, 2024, were $71.5 million.

We identified management's determination that it is more likely than not that deferred tax assets will be realized as a critical audit matter because of the significant judgments and estimates management makes in evaluating positive and negative evidence, including taxable income. This required a high degree of auditor judgment and an increased extent of 

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effort, including the need to involve our income tax specialists when performing audit procedures to evaluate the reasonableness of management's significant judgments and estimates. 

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the determination that it is more likely than not that deferred tax assets will be realized included the following, among others:

•With the assistance of our income