How CAVA (CAVA Group) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a fast-casual restaurant chain like CAVA makes money is essential for investors and anyone interested in the business of modern food retail. In this post, we break down CAVA's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick CAVA Overview

CAVA operates a rapidly growing network of fast-casual restaurants specializing in Mediterranean-inspired cuisine. Revenue comes primarily from in-restaurant dining and digital orders, with a small contribution from branded retail products. The company’s business model focuses on high-traffic urban and suburban locations, leveraging a streamlined menu and digital ordering to drive efficiency and customer engagement.

Revenue Breakdown

• Total Revenue (Q3 2025): $280.6M (+20.2% YoY)
  • CAVA Restaurant Revenue: $278.2M (99.2% of total)
  • Other Revenue by Product: $2.4M (0.8% of total)
  • Growth is powered by new restaurant openings, increased same-store sales, and digital channel expansion.

Gross Profit and Margins

• Gross Profit: $57.9M (20.6% gross margin)
  • Cost of Revenue: $222.7M (+20.5% YoY)
  • CAVA maintains moderate margins due to its scalable restaurant model and operational efficiencies, though food and labor costs remain significant.
• Most costs come from food ingredients, labor, and occupancy expenses.

Operating Income and Expenses

• Operating Income: $25.8M (+26.9% YoY, 9.2% margin)
• Operating Expenses: $32.1M (+13.3% YoY)
  • R&D: Not separately disclosed for Q3 2025
  • SG&A: $32.1M (+13.3% YoY, 11.4% of revenue) — includes corporate overhead, marketing, and administrative costs
  • CAVA continues to invest in growth and digital innovation while maintaining efficiency in its core operations.

Net Income

• Pre-Tax Income: $23.7M (+18.3% YoY, 8.4% margin)
• Income Tax: $5.3M (22.5% effective tax rate)
• Net Income: $18.4M (-7.0% YoY, 6.5% net margin)
• CAVA converts a moderate portion of sales into profit due to its efficient operations and growing scale, though net income declined year-over-year due to higher costs and investments.

What Drives CAVA's Money Machine?

• Restaurant Revenue: Over 99% of revenue comes from CAVA’s owned and operated restaurants, driven by customer traffic and average check size.
• Same-Store Sales Growth: Continued expansion in digital orders and menu innovation support higher per-store sales.
• Strategic Investments: Capital is allocated to new restaurant openings, digital infrastructure, and brand marketing.
• Future Growth Areas: Expansion into new markets and retail product lines, though these segments are not yet significant contributors to profit.

Visualizing CAVA's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially SG&A) taking the largest chunk.
• Even after significant costs and ongoing investments, 6.5% of revenue drops to the bottom line.

Key Takeaways

• CAVA's money comes overwhelmingly from its restaurant operations
• High gross and net margins illustrate the power of CAVA’s scalable, digitally enabled business model
• Heavy investment in new locations and digital channels, balanced by efficiency in operating costs
• Ongoing growth is driven by new store openings, digital sales, and menu innovation

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FAQ About CAVA's Income Statement

1. What is the main source of CAVA's revenue in 2025?

CAVA generates over 99% of its revenue from its owned and operated restaurants. Other revenue sources, such as branded retail products, contribute less than 1% of total revenue.

2. How profitable is CAVA in Q3 2025?

CAVA reported net income of $18.4M in Q3 2025, with a net margin of approximately 6.5%, reflecting moderate profitability driven by operational scale and efficiency.

3. What are the largest expense categories for CAVA?

The biggest expenses on CAVA's income statement are cost of revenue (food, labor, occupancy) and operating expenses, particularly Sales, General & Administrative (SG&A) costs. SG&A reached $32.1M in Q3 2025, as CAVA prioritizes corporate infrastructure and marketing to support growth.

4. Why does retail product revenue operate at a loss?

Other Revenue by Product, despite generating $2.4M in revenue, is not a significant profit driver in Q3 2025. This is because CAVA aggressively invests in brand expansion and new product development, believing these will drive long-term growth—even if the division is unprofitable today.

5. How does CAVA's effective tax rate compare to previous years?

CAVA's effective tax rate in Q3 2025 was 22.5%, consistent with prior years. This moderate rate is primarily due to standard corporate tax treatment and does not reflect significant tax benefits or penalties.