CAVA Group, Inc. (CAVA)

Return on equity (ROE)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	US$ in thousands	130,319	13,280	-58,987	-37,391	60,800
Total stockholders’ equity	US$ in thousands	695,566	570,802	213,805	269,287	870,900
ROE		18.74%	2.33%	-27.59%	-13.89%	6.98%

December 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $130,319K ÷ $695,566K
= 18.74%

The return on equity (ROE) of CAVA Group, Inc. has exhibited significant fluctuations over the observed period from December 31, 2020, to December 31, 2024. In 2020, the company's ROE was 6.98%, indicating a modestly positive return generated on shareholders' equity. However, in the subsequent year, 2021, the ROE declined sharply to -13.89%, reflecting a transition to a loss relative to shareholders' equity and suggesting challenges in profitability or increased expenses during that period.

This negative trend persisted into 2022, with ROE deteriorating further to -27.59%, indicating that the company's net income was significantly below shareholders' equity, potentially due to operating losses, extraordinary charges, or other financial pressures. The persistent negative ROE underscores a period of financial underperformance or restructuring challenges facing the company during these years.

In 2023, there was a notable turnaround, with the ROE improving to 2.33%. This shift from negative to positive indicates a recovery or improved profitability, although the ROE remained relatively modest and suggests that the company was beginning to generate returns on equity after earlier difficulties.

By 2024, the ROE experienced substantial growth to 18.74%, marking a significant enhancement in shareholder returns. This positive and relatively high ROE implies that CAVA Group, Inc. was able to generate strong net income relative to shareholders' equity, reflecting improved operational efficiency, profitability, or a combination of both.

Overall, the trend in CAVA Group, Inc.'s ROE demonstrates a period of substantial volatility, transitioning from modest positive returns in 2020 to significant negative returns in 2021 and 2022, followed by a strong recovery and growth in 2023 and 2024. The recent higher ROE may suggest a favorable shift in the company's financial performance and value generation for shareholders.