CAVA Group, Inc. (CAVA)
Profitability ratios
Return on sales
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 23.81% | 21.87% | 20.45% | 18.59% | 18.26% | 18.24% | 17.36% | 20.22% | 18.48% | 14.89% | 13.62% |
| Operating profit margin | 5.19% | 5.42% | 5.60% | 5.43% | 4.71% | 4.31% | 3.70% | 1.61% | -0.11% | -3.71% | -5.38% |
| Pretax margin | 6.37% | 6.22% | 6.01% | 5.19% | 3.87% | 1.93% | -1.10% | -4.07% | -6.74% | -10.44% | -10.98% |
| Net profit margin | 13.70% | 13.52% | 5.88% | 5.04% | 3.75% | 1.82% | -1.12% | -4.08% | -6.76% | -10.46% | -11.00% |
The analyzed profitability ratios of CAVA Group, Inc. over the periods presented demonstrate several notable trends.
Starting with the gross profit margin, there has been a consistent improvement from 13.62% as of September 30, 2022, to a peak of 23.81% projected for March 31, 2025. The margin shows steady growth, indicating enhanced cost management or favorable pricing strategies, leading to a larger portion of revenue remaining after cost of goods sold.
Operating profit margins have shown a marked turnaround, starting from negative values of -5.38% on September 30, 2022, and progressively moving into positive territory. By December 31, 2022, the margin improved to -3.71%, and this positive trend continued, reaching approximately 5.19% by March 31, 2025. This positive shift suggests better control over operating expenses and improved operational efficiencies over time.
Pre-tax margins reflect a similar pattern, transitioning from negative margins of -10.98% and -10.44% in late 2022 to positive margins by the end of 2023, and continuing to improve through 2024, reaching approximately 6.37% in March 2025. The improvement in pre-tax margins indicates increased profitability at the core business level before tax considerations.
Net profit margins mirror this upward trajectory, shifting from negative margins of around -11.00% in September 2022 to positive margins of 13.52% by December 2024 and maintaining at approximately 13.70% in March 2025. This significant turnaround signifies that the company has successfully improved its bottom-line profitability, possibly through revenue growth, margin expansion, and cost management.
Overall, the financial data indicates that CAVA Group, Inc. has experienced a substantial transformation in profitability metrics over the analyzed period. The consistent upward trends in gross, operating, pre-tax, and net profit margins suggest effective strategic initiatives, operational improvements, and an enhanced ability to generate earnings. The presence of negative margins in early periods underscores past challenges, but the recent positive margins reflect a strong and improving profit profile.
Return on investment
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.38% | 4.47% | 4.74% | 4.42% | 3.68% | 2.96% | 2.56% | 1.07% | -0.10% | -3.20% | -4.53% |
| Return on assets (ROA) | 11.56% | 11.14% | 4.98% | 4.10% | 2.93% | 1.25% | -0.77% | -2.71% | -6.09% | -9.01% | -9.27% |
| Return on total capital | 9.38% | 8.21% | 8.00% | 6.02% | 3.86% | 1.67% | -1.63% | -2.60% | -11.91% | -19.98% | -20.39% |
| Return on equity (ROE) | 19.56% | 18.74% | 8.72% | 7.16% | 5.06% | 2.33% | -1.35% | -4.74% | -19.46% | -27.59% | -28.37% |
The analysis of CAVA Group, Inc.'s profitability ratios over the specified period indicates a significant improvement from negative territory toward positive performance across all key metrics.
Starting with the Operating Return on Assets (Operating ROA), the ratio demonstrated a notable upward trend, improving from -4.53% as of September 30, 2022, to 2.56% by September 30, 2023. Continuing this trajectory, it further increased to approximately 4.74% by September 30, 2024, with the forecasted values maintaining an upward movement through December 2024 and into March 2025. This progression signifies enhanced operational efficiency and better utilization of assets to generate operating income.
The Return on Assets (ROA), which reflects overall profitability including non-operating factors, transitioned from a negative figure of -9.27% at the end of September 2022 to positive territory, reaching 11.56% by March 2025. The pattern suggests that the company has successfully turned around its profitability, likely through improved sales, margin management, or cost control, resulting in increased net income relative to total assets.
In terms of Return on Total Capital, the ratio moved from -20.39% in September 2022 to modest positive levels of 9.38% by March 2025. This indicates the company's increasing ability to generate profit from all sources of capital, including debt and equity, reflecting improved capital efficiency and leveraging.
Return on Equity (ROE) experienced a particularly dramatic recovery. It started at -28.37% in September 2022, indicating substantial losses relative to shareholder equity, and showed steady improvement over time. By the end of March 2025, ROE reached 19.56%, signaling that the company is now generating meaningful profit for shareholders and has substantially reduced losses experienced previously.
Overall, the data reveal a trend of substantial recovery and growth in profitability metrics, transitioning from negative levels in late 2022 and early 2023 to positive and improving figures through 2024 and into 2025. This pattern underscores a significant turnaround in CAVA Group, Inc.'s operational and financial performance, reflecting effective strategic initiatives, operational efficiencies, and improved earnings generation capacity.