Content analysis
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Uncertain | ||
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8th grade Avg
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Financial report summary
?Risks
- We operate in a highly competitive industry.
- Our future growth depends on our ability to open new restaurants while managing our growth effectively and maintaining our culture, and our historical growth may not be indicative of our future growth.
- We may not be able to successfully identify appropriate locations and develop and expand our operations in existing and new markets.
- New restaurants may not be profitable, and may negatively affect sales at our existing locations.
- Negative changes in guest perception of our brand could negatively impact our business.
- Our efforts to market our restaurants and brand may not be successful.
- Food safety issues and food-borne illness concerns may harm our business.
- If we are unable to maintain or increase prices, our margins may decrease.
- The growth of our business depends on our ability to accurately predict guest trends and demand and successfully introduce new menu offerings and improve our existing menu offerings.
- We are subject to risks associated with leasing property.
- We may not be able to successfully expand our digital and delivery business, which is subject to risks outside of our control.
- Our inability or failure to utilize, recognize, respond to, and effectively manage the immediacy of social media could have a material adverse effect on our business.
- We have a history of losses and, especially if we continue to grow at an accelerated rate, we may not achieve or maintain profitability in the future.
- We may not realize the anticipated benefits from past and potential future acquisitions, investments or other strategic initiatives, including our acquisition of Zoes Kitchen and the associated conversions to CAVA restaurants.
- We may not be able to manage our manufacturing and supply chain effectively, which may adversely affect our results of operations.
- We may not successfully optimize, operate, and manage our production facilities.
- Our reliance on third parties could have an adverse effect on our business, financial condition, and results of operations.
- We may experience shortages, delays, or interruptions in the delivery of food items and other products.
- We may face increases in food, commodity, energy, and other costs.
- We may face increases in labor costs, labor shortages, and difficulties in identifying, hiring, training, motivating, and retaining the right Team Members.
- Our success depends on our ability to attract, develop, and retain our management team and key Team Members.
- Security breaches of our electronic processing of credit and debit card transactions, the CAVA app, or confidential guest or Team Member information (including personal information) may adversely affect our business.
- Our business is subject to complex and evolving laws and regulations regarding privacy, data protection, and cybersecurity.
- We may not be able to adequately protect or enforce our rights in our intellectual property.
- We have been, and may in the future be, subject to claims that we violated certain third-party intellectual property rights.
- We rely heavily on information technology systems and failures, or interruptions in, or not effectively scaling and adapting, our information technology systems could harm our business.
- The successful operation of our business depends upon the performance and reliability of internet, mobile, and other infrastructure, as well as of our third party vendors, none of which are under our control.
- We are subject to extensive laws and regulatory requirements, and failure to comply with, or changes in, these laws or regulations could have an adverse impact on our business.
- We are subject to various claims and legal actions that could distract management, increase our expenses, or subject us to monetary damages or other remedies.
- If tax laws change or we experience adverse outcomes resulting from examination of our tax returns or disagreements with taxing authorities, it could adversely affect our business, financial condition, and results of operations.
- Our ability to use our net operating loss carryforwards may be limited.
- Economic factors and guest behavior trends, which are uncertain and largely beyond our control, may adversely affect guests’ behavior and our ability to maintain or increase sales at our restaurants.
- Pandemics and outbreaks, such as the ongoing COVID-19 pandemic, have had, and may continue to have, an adverse impact on our business.
- We are subject to evolving rules and regulations with respect to ESG matters.
- Climate change and volatile adverse weather conditions could adversely affect our restaurant sales or results of operations.
- Our inability or failure to execute a comprehensive business continuity plan for our Collaboration Center Organization following a disaster or force majeure event could have a material adverse impact on our business.
- The failure of any bank in which we deposit our funds could have an adverse effect on our financial condition.
- Our quarterly financial results may fluctuate significantly, including due to factors that are not in our control.
- Our executive officers, directors, and certain affiliate holders of our common stock collectively beneficially own approximately 41.1% of the outstanding shares of our common stock, which may limit your ability to influence the outcome of important transactions.
- Our ability to incur a substantial level of indebtedness may reduce our financial flexibility, affect our ability to operate our business, and divert cash flow from operations for debt service.
- Our Credit Facility contains restrictions on our ability to operate our business and to pursue our business strategies.
- Our failure to comply with the Credit Facility, including as a result of events beyond our control, could result in an event of default that could materially adversely affect our business, financial condition, and results of operations.
- We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” will make our common stock less attractive to investors.
- We will continue to incur significant increased costs and become subject to additional regulations and requirements as a result of becoming a public company, and our management will continue to be required to devote substantial time to new compliance matters, which could lower our profits or make it more difficult to run our business.
- Failure to comply with requirements to design, implement and maintain effective internal controls could have a material adverse effect on our business and stock price.
- An active, liquid trading market for shares of our common stock may not be sustained, which may make it difficult to sell the shares of common stock you purchase.
- Our stock price may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares of our common stock at or above the price you paid or at all, and you could lose all or part of your investment as a result.
- Your percentage ownership in our Company may be diluted by future issuances of our common stock, which could reduce your influence over matters on which stockholders vote.
- Because we have no current plans to pay cash dividends on our common stock, you may not receive any return on investment unless you sell your shares of common stock for a price greater than that which you paid for it.
- Future sales, or the perception of future sales, by us or our existing stockholders could cause the market price for our common stock to decline.
- If securities analysts do not publish research or reports about our business or if they downgrade our stock or our sector, our stock price and trading volume could decline.
- Anti-takeover provisions in our organizational documents and under Delaware law could delay or prevent a change of control.
- Our Board of Directors is authorized to issue and designate shares of our preferred stock in additional series without stockholder approval.
- Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware (or if such court does not have jurisdiction, another state or the federal courts (as appropriate) located within the State of Delaware) will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees, or stockholders.
Management Discussion
- The increase in CAVA Revenue was primarily due to a $177.4 million increase from the 145 Net New CAVA Restaurant Openings during or subsequent to fiscal 2022, of which the majority was attributable to the 91 CAVA restaurants that were converted from Zoes Kitchen locations. The remainder of the increase in CAVA Revenue was driven by CAVA Same Restaurant Sales Growth of 17.9%, which consists of 10.4% from guest traffic increases and 7.5% from menu price increases and product mix, and the impact of a 53rd week in fiscal 2023.
- The increase in CAVA food, beverage, and packaging was primarily due to a $54.2 million increase from the 145 Net New CAVA Restaurant Openings during or subsequent to fiscal 2022, of which the majority was attributable to the 91 CAVA restaurants that were converted from Zoes Kitchen locations. The remainder of the increase was primarily due to CAVA Same Restaurant Sales Growth of 17.9% and the impact of a 53rd week in fiscal 2023.
- As a percentage of CAVA Revenue, CAVA food, beverage, and packaging decreased primarily due to lower input costs and a higher incidence of premium menu items driving favorable product mix.