CAVA (CAVA) 27 Feb 242023 Q4 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the CAVA Q4 2023 Earnings Conference Call. [Operator Instructions] This call is being recorded on Tuesday, February 27, 2024. I would now like to turn the conference over to Matt Milanovich, SVP of Finance. Please go ahead.

Good morning, and welcome to CAVA's Fourth Quarter and Full Year 2023 Financial Results Conference Call.

want notice. you I today joining begin, late on we to for thank us Before media breached air, a this about issue Yesterday, outlet earnings call our a and our financial story ahead released of results and in release prompting schedule. to an us host embargo agreement

the to investor.cava.com, the you available SEC If of on not review. which related and our have already release do at we are you encourage X-K copy website a earnings furnished with

give to a is further call the conference this of results as purpose the regarding well company's financial general investors company's The details on progress. as update

You unreasonable most financial company's measures directly efforts, release and in will the each accordance discussed the measure any financial to to in today's which the calculated earnings call find on reconciliations deck, is posted comparable with website. supplemental of without on of available non-GAAP GAAP today's extent

Before we forward-looking remind contain me that will call everyone this begin, let statements.

discussed risks detail and from any filings made Investors uncertainties are this should For statements. of and the statements the call here risk materially that statements. explained may more of be forward-looking These cause detailed historical are that statements in a for those differ aware Please not refer are risk forward-looking could various in and statements factors results with any filings these CAVA's today. actual statements deemed be uncertainties, SEC. risks to fact to to discussion forward-looking purpose, be to subject during that this of such

statements, And call CEO, I'll undertakes no Brett or and or publicly and information, result required made today law, Co-Founder the except revise whether over CAVA now statements otherwise. of a update are company's developments new forward-looking All the to as Schulman. future as turn to as any forward-looking of obligation by

during net our in new us. a by power white Thanks, continue more than net Matt, consecutive the XX Traffic demonstrated XXXX, We and footprint ahead space restaurants following IPO, opportunity year, of successful generated the and positive of welcome call, to XX%. significant restaurants In X existing brand opened income. category-defining the climb everyone. of we our we and growing our to quarters the

the is fulfill category, desire with cultural cuisine no create clear. bold, we between health. next We unique potential for consumers' extraordinary our As compromise growing taste and large-scale flavors

to income growth Our has proven of portability and states Mediterranean District a in of across XXXX. coast unit a and XX continue of the in generations from or have to restaurants levels, annual concept genders, more goal XX% We suburbs. and appeal target broad cities now with by coast presence and Columbia and X,XXX long-term

value foundation drive to powerful We've that our investments is our consumers. to macroeconomic us value unit The growth, and built proposition continued geopolitical support economic a guests uncertainty, forward. our with support and resonating strong make we engine and in with members proposition. Even our continues team that

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XXXX growth, in fourth XXX than new increase EBITDA increase ending Adjusted of increase increase restaurants. restaurants, XXXX for and of were net in CAVA the increase $XX.X increase $XX.X revenue. XX XX% income of of million, $XX.X over XX% in net income including traffic. million. XX.X% a including $X net same a net restaurants with increase million, million. quarter in CAVA quarter full XX% over record a new the the fourth including sales the outstanding in we restaurant EBITDA results a same million delivered traffic. $XX.X year-over-year. more X.X% XX and of $XX.X growth sales million And nearly a Our a a year, with results, CAVA of XX.X% restaurant Adjusted XXXX CAVA revenue. XX.X% quarter

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different expansion exhibiting we X across of QX, country, brand. portability further in the the In opening locations our our continued states,

brand. a single We also CAVA Zoe's conversion remaining opened our operating last are and under powerful

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XX% internally our GMs. our place In target we restaurant XXXX of addition, delivered to new on

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average Newsweek one our rated of survey, In are our quintile date. the we quartile, Team the member America's score top team us by be we and greatest works members in proud recent most inclusion to as the top category, on ranked and diversity named also diversity. highest in in for to

operations. team our business we Virginia our support to A commenced and that support scale, of restaurants for at excited dips our facility To additional the least infrastructure as XX,XXX Verona, has growth we well can facility, as announce plans XXX along build produces production new success spreads in and further manufacturing and the our with our Verona We're Maryland, to growth. Laurel, CPG square-foot as existing business. of in CAVA our facility

This of and recipes. of the and our the vertically complexity out takes integrity overall model integrated chef-crafted restaurants lets and maintain improves quality us cost

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of tomato, not flavors on make oregano that Mediterranean dried heavy is for rich take the fruity but and brightness features Our bold CAVA beloved of special. the touch sun a and this unique name red It herb heat. chili demonstrates

Our XXXX. in Dallas and Boston the of expect and market progressing out stake we second well, half company-wide tests are to roll

loyalty. to Turning

base, stages early the in passionate experiences customer new aimed of connections and are We deeper at relevant program launching traffic, further and more driving creating frequent, developing with mix our a check.

guests. lets and we construct points. testing redeem the bank of end a we earn Houston started the members XXXX, to types them all new At and rewards new loyalty market, to transitioned ways of In to new engage that

an We the are test gate of to market. Carolinas stage the moving with in the pilot next Houston expanded

rewards end company-wide Early at results out meeting this are roll expect of we and new program a the year. expectations, to

reflects on builds evolving strategic call Tricia, with like on X our the turning key date accomplishments and touch strategy our to Before to XXXX plan, to over our pillars. which I'd

our areas. Mediterranean key first way communities and X the encompasses expand country, The pillar, across

includes growing footprint our The test. restaurant first catering our area access. growth new like initiatives and and This channel expanding is

which essence culinary stake launch second planned a and creates our the by communication is area the sold, in design, inviting half is to concept new innovation occasions. area engine includes for fueling physical projects our which year. drive our of our consistently in-restaurant the last of across check illustrated The space second the and traffic, X.X finalized expressing mix more brand And properties, rollout

guests, for create This and more experiences. digital and scale. Our is driven even a loyalty focused one-to-one cohesive can reimagined physical developing guests a connections for we pillar deepen digital with using personal communication and guests journey with second relationships includes creating that by our ecosystem personalized program on as

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unlock a and final further accountability, productivity and capabilities and to connect developing teams. high-performing our and team, retain culture powerful enhanced programs and operate our deepening as actionable insights tools data fourth to of improved Our engage, implementing pillar: includes

to HR of talent evolve of the knowledge growth our discipline. and expand strategies, customer our strengthen fostering while and and continue will our We enhance mindset deepen systems a and

team health humanity want to contributions and members commitment their bringing a their year to food. heart, thank for to I our record-setting to for and

all of Tricia including into in know we let you financials. we through look at We proud the possible CAVA ahead. entrance for our we all that, but the forward I'll and is the just of accomplished market that walk are to With we XXXX, beginning public journey have that the are

driven we sales our Thanks, X.X%. a grew Brett, good the Fiscal Same-restaurant everyone. XXXX XXXX of which calculation. XX.X% and growth had XX.X%, restaurant million. $XXX.X quarter morning, increased same revenue traffic week, by of fourth from sales excluded XXrd to in year-over-year CAVA

strength in our We count restaurant same locations. We bringing across the and net total opened XXX. regions new CAVA urban fourth both in XX vintages, to sales broad-based restaurant suburban noted quarter CAVA restaurants

be with continue openings. We margin performance of pleased new restaurant line to and the top

the in In CAVA $XX.X was a quarter restaurant million AUV year, above million of all geographies $XX is reflected portability prior revenue or with proven million XX.X% the level or addition, $X.X or our versus XX% fourth million in revenue $X.X our increase. in representing more. XX.X% overall profit of

the beverage incremental packaging partially packaging lower lower expansion quarter investments. beverage menu of premium costs were margin sales XX.X% food, of impact the was offset The higher result items leverage, XXrd and and wage largely than XXX CAVA's favorable of food, mix. of XXXX by basis improved of fourth by including and input points, week, costs the driving product costs driven incidence by revenues, and the

points labor we call, basis compared the reflects the quarter prior member from and to the leverage XX CAVA by partially that sales team The increased discussed related wages increase XXXX. quarter in earnings up fourth investments year. of costs offset XX.X%, our were on third from

of points reflecting XX.X% were the in quarter from an XX basis of improvement support CAVA leverage. basis of due increased our our investments XXX of related to physical integrity revenue, the of operating spaces XXXX and XXXX, of increased expenses other fourth of expenses occupancy restaurant quarter were revenue, X.X% the sales increase in from fourth an CAVA points of volumes.

Shifting performance. overall to

million for was XXXX. public excluding primarily support million $XX.X general of driven million is company to administrative growth, our accruals. costs Our compensation, by compensation, $X legal expenses in the incentive increase $XX.X and performance-based compared QX stock-based investments recurring to quarter, and This

driven quarter, items the including stock-based $XX.X an higher current revenue, in which the burden leverage. from EBITDA, increase the prior partially of of quarter points As excluding was quarter, XX G&A of a was for Adjusted compensation than XX% QX million by of the sales basis offset XXXX. preopening was $XX.X by costs the aforementioned year percentage million,

expenses performance in CAVA related the million openings. with to income in growth, XX.X% as QX of opened related compared QX well preopening of increase reported the XX by level as a of we of net restaurants included costs restaurant margin XXXX. EBITDA representing mind, restaurant QX was sales and to $X units an same million Keep date loss opened The million. driven of net CAVA $XX.X quarter profit increase We in $XX.X XXXX, the new in the improved during of adjusted to costs

We $X.XX QX with a of reported diluted per of compared share quarter $XX.XX in earnings diluted in per share the XXXX. loss of

liquidity. $XX operations million debt from compared delivered At outstanding, our of of had for option in to a prior the on needed. cash we with flow in the increase $XXX.X the million to Shifting year liquidity an million as quarter, million cash to access with end hand undrawn $XX.X the X year. $X We and revolver

landlords The increase fleet. pipeline. profiles. diverse we've profitability site our a markets, on on by or touch our and primarily I increased not is to development dependent driven The the would operations, small driving like built improved of pipeline across number is

we are we and XXXX, positioning robust time, development insulated potential has our actively growth increased building inspections. for in in into from permitting At us continued availability delays and ensure to new built existing same Our markets. team are for a the pipeline equipment buffer pipeline

full profit XX.X% Turning margin XX costs, net $XX between $XX.X we million the of and outlook preopening to $XX.X million; XX.X%; and to X% openings; CAVA sales the including and new restaurant $XX our adjusted of growth restaurant to million XX and million. for burden expect between costs between level preopening XXXX, year same restaurant EBITDA, CAVA X%; CAVA following:

share outlook. some XXXX to want thoughts I for additional our

in As we price menu you X% an XXXX. in-restaurant know, took approximate increase January

response further AB We XXXX, plans FAST continue invest increases current in predecessor do creating in take not to we the guests, our value was California to price for the whose have time to Act. at and

basis value term. to for margin in is but shareholders long point which expect in guests XX near a over the also our our in reduction level We year approximately restaurant profit the term, and contemplated guidance, drive full

of a with XXs, in same-restaurant line the the XXXX. is in Our sales low half guidance X-year XXXX implies stack which back

our winter sales QX takes the to benefited quarter the a guidance XXXX. third XXXX and, XXXX extent, halo also consideration IPO mild same-restaurant and benefit the of from Our in QX an unseasonably of that lesser

power investments we operating as guidance on and scale the model our demonstrate important trajectory XXXX reflects in model. time our to in of and results is deliver XXXX Our our our an This growth our grow.

profit level to XX.X% XXXX. margin between be XXX We XX.X% expect restaurant to below basis XXX and points or

with of investments level team in wages as implemented This increase part in margin expansion previously incorporates the our additional the discussed the near-term point to restaurant long fourth over quarter of XXX basis in investment XXXX drive members, along term.

And restaurant similar We includes a quarter our expect seasonality weeks. at level profit margin reminder, XX XXXX. as throughout first that

to open stronger Q&A, proven going for continues collective they get portability new and to welcome I positivity, restaurant, unit our results in for delivered reinforced powerful the teams Through we our manufacturing guest Before CAVA outstanding every passion center new ambition our restaurant to their to want acknowledge economics. with and XXXX. every we and table. collaboration they and

for up to Now it open the to call turn over back I Q&A. operator the will

from Instructions] Brian line at Harbour the Our [Operator of first Morgan question Stanley. comes

think range same-store still this plan. for your is are low that -- sales about do you pricing the end of more that kind see about? how What as this perhaps of range mix premium you've then expect within attach? expect you of you drivers year? kind that would And talked of much do traffic year, still as just that obviously, you seeing of kind you Do Maybe you that --

X% those weather back the stack it our to in that in for impact from a about really the year of year with guide higher in same-restaurant is full part X% talked because the first part QX favorable reflects had so we XXs Brian, year of low previously. the the of the X-year than

end to looking the lesser traffic we're continues remainder. to it same sales way be QX the that called you'd that a thing But mix see to actual considers the extent the and the is does QX. PPA likely in is and closer in the The to IPO It X% results halo is and high price it reflect range. if restaurant other you out at the guide, of the expand,

next Citigroup. line the Jon question of Our comes at Tower from

earlier, things I hoping had you I was X that Brett, expand was you could curious, upon. mentioned

stores for in-store occasions. footprint require you First, new will of for could about in base? the dig not you you space curious feel store general versus store new like what a expanding if and talked design some just into whether for I'm prototypes bigger you've today got or the

much then the kind are in XX of you little over And the you could connected is within next the on How after? where color kitchen going more plan And second with initiative. you if to store of months? on a respect you maybe provide see specifically bit more where the kind investment

Thanks see space really of our opt footprint. invite With with our regards to to any question. Thanks, our accommodate in more really physical channel. and It's change to enhancing in-restaurant warming don't the in Yes. we aesthetic for physical the XX% guests Jon. and and come us footprint, the in engage occasions. our

our We have in engaged digital channels. that XX%

digital We channels. have great

digital our We channels. pickup pickup well think think have have as off-the-shelf an lanes don't We car pickup by We we it's all either/or. physical it's great and. an And XX opportunities. as of

those physical take to And opportunity of want really to so advantage along drive occasions. we additional digital occasions with that

drive off In a lot a journey multiyear greater to effectiveness beginning where of see regards efficiency is plate. operational kitchen a tremendous team members this to and we of improve connected by initiative, the the opportunity productivity, the complexity to taking

use again CAVA CapEx AI food. predictive sophistication, any in and Mediterranean excited predictive reflected cook that team really prep, our and and and level we're for or it's about, make through And and So scheduling, batching our like guidance. deliver great guidance expense of our the easier is run and drive of that is things investment models. hospitality our restaurants But taking to a predictive the another initiative longer-term we opportunity productivity it to again, greater this to multiyear data see

of at Our Brian next question Sandler. Piper line comes from the Mullan

in on you I is innovation. going to shared roll about exciting. half in Can Brett, stake across what benefits out business year, next maybe you ahead the about and you perspective consumer of the second question a the venue just which an the in full think, to a step And system, Just the remarks, you're prepared talk what launch? this perspective. you take the caused and talk the from saw to for just economic go test, maybe then this

to second year. What in to consumer track in seeing effectiveness the the looking Yes. we're the test well half We're that as be launch were excited the we validate. of receptivity this operational on the is as to

And in with the we've meeting and Boston, our have and so stage Dallas that's seen that the in test gate both results multi-market we're markets. in been expectations

we you if we menu used our that remember, back removed January. on grilled And meatballs to in have

to a that drive item so gap an is on we And occasions is currently menu definitely menu. the and incremental beef that our exist opportunity perceived a in think frequency doesn't

excited So we're launch the in of half that to year. the second

And test the of our results and a as impact this is At margin of be dollar continuing to have point, next does call that guidance the might reflect the the so and our not economics, test. equivalents as the evaluate those we'll any result stake designed impact and tests we're it to how relates to on updates guidance.

So updates give we'll as forward. continue to move we you

at from Jefferies. Andy line And question of our Barish next the comes

question. it's of connected a guess I kind

specific lower of drive a Southwest follow-up, kind does out in and guess, I continuing to the really of of market coming out the markets and have plans tie I'll real awareness. just volume Southeast shortly. region Zoe's kind pipeline and the that country? conversions. your Or build And Just the are it estate into Any of

question. those what's young in the and the and The million Southeast at respectively. X.X really, those AUV. relatively X.X driving a AUVs Andy, that's are thanks markets, restaurants fleet of AUVs And reflect the Southwest million, for and

on So culinary those hospitality innovation necessarily but rest see of continue continuing anything any like and amazing should incredible and increase see results you we the don't differently, and to to a markets the plate. to need just those execute to do impact

with you share just XX pipeline developing by on cetera? of anything on a so quarter quarter-to-date us? markets, by balance can or type the real estate Obviously, markets, with far the et then good And stores, on the start new state

Yes.

estate pipeline So well The our on been strategy. robust. very is executing real really our has team

very the the and markets in emerging it a about markets balanced brand markets, we new excuse of established where and those like in rest pipeline, which me, XX% XX% markets Chicago, whether we'll So growth opening have in then markets. meaning emerging in XX% another be is greenfield there's our -- or up

appropriate restaurant the that, and feel good the it, in in And time envisioning year. openings the about line, executing of buffers even really we're so against a throughout we're fairly I spread built

David Our next line comes from Baird. the of question Tarantino at

great. outside -- average most the Congratulations related terms revenue to outcome? to not be as on the something on QX a the would in particular, call the great a modeled I if you was out we others quite upside comment specifically recent might number. looking have that upside could the And I influenced Tricia, comps. volumes, revenue question was follow-up, question, maybe that relative and what unit a there's class in seeing on in at you're if just wondering XXXX. how that My had the maybe the it, as of on on if openings line clarification of to you comp And could high as anything

David, thanks with for your last part start Certainly, that. first. I'll

as openings restaurant new well margin the on Our on side expectations, have the restaurant AUV been side. as exceeding our level both

the really restaurants again, pipeline deliver the throughout and delivering have process what with, So new been continue pleased year. and and estate the real those to

of impact about seasonality the the properly we weekly themselves it, business. of when So at reflect looks and looking been all like associated with models it you doesn't average our sales might how think the have

of been XXrd mind of that lowest to component any seasonality of on the the week weekly same keeping holiday softest So impacts in And us the it. we at had with quarter than seasonally at average impact sales of could CAVA. little quarter top have the a there for overestimation fourth quarter time, an I the is the bit our think

line at next Our Chris comes question from the O'Cull Stifel. of

an ops where are what will that Congrats today and And that Brett, as enter want measure them describe at hoping was year. maybe where maybe end team you 'XX? you KPIs performance are of to and excellent the for the I those goals progress on could store be the into the the measures you key year?

Chris, that operations incorporates question. for food as have operating and scorecard labor, scores From have proprietary X we thanks adherence consistent metrics where ensuring experience portions And that's and an Yes. metrics, track. as COGS financial the our we key op we everything well and of that management customer from to accountability. accuracy, safety --

are want fast. far, think we make too looking exist, well. not we're the pushing we pedal that they throughput too opportunities on as sure but So gas We to at

that we And advantage labor deployments progresses. to some year are opportunity as testing of so different the take

comes Our Zackfia next from question the line at Sharon Blair. of William

A question development. on

you positive kind or accelerated 'XX that has the pipeline kind outlook. of you surprises encountered manifesting, has have throughout obviously, How As negative? you greenfield any of 'XX, raised been have

So are running units moving delivery up would few of and I there's anticipated been parts you and ability timing and seeing more to them last sites have a in of running up know as and the you lot maybe of get getting pre-pandemic? predictability years. and

certainly, lots parts. yes, Sharon, moving of

could surprised We us. pipeline space -- over or seen few others were has that many where and expand, we X be would just would really a what we're increasing built deliver, lines of have development years in the are. it there so challenges, appropriately like so reflective time that into evaluate the pipeline be continuing nothing month As opportunities past our the anticipating to

I still mean country. of but we're the space a white in across XX states lot today,

there's out and many are lots estate out them. real the there So are opportunity markets where scoping team of of new

So mindset not develop if the are going returns to the may right way where we and we've find and a got we market feel the patience a to like there sites that the was situation appropriate value. that right like, drive overall ever deliver be materializing

strategy you over awareness years? greenfield? it changed so build what you brand last is ask Have X kind similar the way as to Can a been doing or the follow-up? you're I the really of Or has

Sharon, it's Brett.

to Community our elevated of had We partner in a I'm raising recent opening the our marketing for awareness Community drive campaign Day press our store local California in Day. donations local market. have and updated excited record-setting increased our Hollywood, philanthropic that

think awareness openings at some I So improvements tactical drive around nice has level. a done to the local team greater

So up given size around And bit in doing be upper as more some type market, that. our done the things and to the of we market. of we have open scale an will a arrival campaign announce Chicago, the we funnel

Andrew question comes next from Charles line of at the Cowen. Our TD

to the is wanted the just given favorable XX% that I likely XX% or test original retrofits you're approaching XX% about really relocations, expectations run the to the point sense about Great. the the above trying And you're ROIC makes lane. I'm where it to understand ask pickup digital How to is if ramp or observing? performing either volumes. mix for stores versus higher of new rate what

Andrew.

we're overall we're margin restaurant look a continue AUV XX is we're and making got thinking we've higher we're how lanes pressured being sure to pickup making and the pickup choices slightly executing from the What about around a perspective. and So better into today an on lanes chasing do level and pickup from number. lanes perspective they'll thoughtful get

but while about a going we're itself, so over X/X than lanes forward. going pickup less likely to XX% XX% mentioned we as you be target And think

XX% for that cash sure we the and delivering on we're can Our return focus really the is driving of exceeding return target making that cash value. a possibly lot cash cash on and best

as something go So a and the lines in of underwrite Chick-fil-A goal a and into that a Raising and what returns compete same we in can't don't pickup to as to in spot want a have doesn't to site many on do pressure is need lot feel of with Cane's the drive or that possible. really a we us a get us attempts really way

Great performed freestanding lane. we have news line, we're is in a really well, or pickup whether

way in we're those optimize so just sure we can the And returns possible. best making

not to any expect into sense. year And XQ February, That for improved months comps? that's you XQ are we're the positive given other unfavorable with modeling tough then, materially make 'XX, PSAs January And in weather the that for now X for out comps industry Tricia, call there quarter, you flagged comparison. the in last that

the Thanks question, Andrew. for

don't all intra-quarter you guidance. give we As know,

So seeing year. our to nothing's of last say thought and about itself. in what our to that we're speak But will this it we going changed to year we're X% to X% into not as I approach QX guide

line of our question Nick at the And comes next from Setyan Securities. Wedbush

on bit. margins to I a in just wanted hone

expect terms inflation of upside in to guys in flat with you -- 'XX down in why we the what and with in in we why QX, pricing, inflation, Just see particularly COGS couldn't couldn't X% cost food XXXX.

the olive cost When think increases, we're thanks food question. Nick, thinking and chicken low for to are particularly there inflation, around some digits, oil. and but olives about mid-single we

So as in our chicken, chicken. to related And area. we increase had go next that we great pricing be some into year, year there'll last

then climate. And also olive oil olives by and were unseasonably an impacted warm

have look we we're take that impact overall, secure Europe, temperature about COGS wanted will like. as so in our that that we into thinking Our some what overseas to products where account and

that very and we've growth and COGS efficiencies other perspective benefited really waste The is from high this in about around was sales XXXX, items. from creating before COGS but a talked piece other same-restaurant

so on that impact 'XX into the into And itself. will you go as drive COGS

look you of like? what QX's growth And outlook, in us might would telling units mind of terms then the just number unit

a mind, fairly perspective, Keep weeks, I'm we've even in already be throughout will year. XX openings and that anticipating the QX From has QX XX. opened

comes question Vaccaro next the of James. from Our Raymond at line Brian

then guidance? the up are help embedded within on I incremental labor Nick's store a have And out margins. us that follow-up. investments quick question you Just following Could on other versus parse that

Yes.

could is did we QX in leverage labor points. around as shift. AUVs about to quarter we investments every in every with grow. XXXX talked third and XXX as I incremental think restaurants just our that other on and great running But labor So basis call, related thing time that over be invest the mean of the pillar be natural about other to day will the about offset

productivity and further that at but the same restaurants So pipeline productivity higher things would think long at increased over depth, term. like the resources increased about time, volume creating drive managerial

it that as continue making scale there'll be and the the we're offset by grow in business will that restaurant. So to and overall leverage we've be shared, investments then we

markets I that add there to well. significant thought need hours in think a as you'll throughput opportunities of per in stores? And Is to store a improve hourly you mentioned certain number

drive Brian, about labor relation even deployments it's the our and initiative. with in Brett. data. No, I the greater more aspects some be with we productivity we opportunity That recalibrate labor through think to along there's deploy the talked how efficient our will connected kitchen of -- to

XXXX touch All year-on-year just the of right. could the provide question growth currently Zoe's is where class you conversions? the And the on are you of performing? are the units color can real then kind class on converted my color 'XX AUVs some more conversions Perhaps Great. or running for of some how comp for on

Yes.

So those we're Zoe's we new-restaurant conversions pleased with look like our openings. at and

new our And our others. conversions the and as are restaurant openings NROs. as organic well those expectations ground-up with those excited mentioned, really evaluate about as our I we So exceeding

Rahul at Our line of from next the JPMorgan. Kro question comes

actually little elaborate up are to trying more lower space a of guys in on the you the you X.X the you cost on Or scaling to increasing while the design? Can are box? the Brett, box? increase you're movement the cost trying

We our the to. environmental aspects, up what have of a cost think question. change No is This guided some Yes, in for seating. thanks pallet the we've great expected refreshed warming using some about really colors, we softer Rahul, opportunity. of

a You've think value of be seen we proposition service challenged relevant to consumer full deliver relevance, proposition. convenience. And as quality, model our experience value and to modern the the

and one really quality and number and deliver where room our enhanced unique with cuisine experience digital deliver X years that dining unite, greater can channels digital we diet, even fast as drive drive format then aesthetic physical experience. an food occasions relevant to We think we and certainly great able occasions. greater ranked, running, Mediterranean that taste food, health We're our convenience to

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there ops? in Thanks lot That's forward shorter here. the discuss fruit guys low-hanging there are color outside operational looks It have look Meanwhile, anything that to can perfect. your here? I within or a in-store you a related to any for initiative. connected all time is kitchen can this your structure like be Anything addressed existing a on that frame, labor to follow-up.

efficiency dayparts. we test our bit we yes, mentioned week and deployed peak deploy and we the hours labor when was redeployments. more it are, this ago. on labor actually, that a our to opportunity be both just an across past our create I Yes. and labor we We initial And versus labor consistent we think prep have efficient times how do our more how with

Understood.

or So to movement does prep like that related prep more this any of off-premise anything off-premise, else sort? involve

balancing and revenue to out No. better the deployments It's match cook curves and the of restaurants. prep simply

are further time. questions no queue this at there the And in

for So closing I'll hand comments. Brett to the the floor back

thank for the I want call everyone to joining today.

off, success restaurant want team net I of a the record prove once and Mediterranean and delivering say appeal openings CAVA proud am for our again XXXX. new how sign With I concept. Before we portability in we of new in XX markets, broad and to our existing year

Our guests powerful our impressive unit were traffic engine results. by as XX.X% continued deliver growth and to economic resilient evidenced

can the and solid for the and Friday, achieve profitability Happy thoughtful I cultural us. with are growth we forward Thanks, major built quarter. you investments look next we joining we We on next long-term create again, speaking for drive spring category, as foundation value. shareholder to cuisine to growth, and making a

all for Thank Thank now much attending. very you concludes you. This the conference.

You disconnect may your now lines.