CAVA Group, Inc. (CAVA)
Return on total capital
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 68,106 | 57,073 | 49,289 | 35,874 | 22,425 | 9,522 | -9,242 | -14,476 | -25,164 | -42,721 | -43,586 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 726,174 | 695,566 | 616,437 | 595,437 | 580,810 | 570,802 | 565,723 | 555,809 | 211,267 | 213,805 | 213,805 |
| 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% |
March 31, 2025 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $68,106K ÷ ($—K + $726,174K)
= 9.38%
The analysis of CAVA Group, Inc.'s return on total capital over the specified period reveals a significant improvement from negative to positive territory. At the close of September 30, 2022, the return on total capital was recorded at -20.39%, indicating a substantial underperformance relative to the capital employed, likely reflecting early-stage operational challenges or investments.
Throughout the subsequent quarters, there has been a consistent upward trajectory. By December 31, 2022, the return improved slightly to -19.98%. The most notable early shift appears between December 31, 2022, and March 31, 2023, where the return narrowed to -11.91%, suggesting initial signs of operational or strategic adjustments producing a positive effect.
The positive momentum persisted into the June 30, 2023 quarter, with the return improving to -2.60%. This near-zero figure indicated that the company was approaching a breakeven point in terms of total capital effectiveness. By September 30, 2023, the return further increased to -1.63%, continuing the trend of gradual recovery.
The turning point became evident as the return transitioned into positive figures starting from December 31, 2023, reaching 1.67%. This milestone reflects the company's ability to generate returns exceeding the cost of capital, marking a potentially sustainable shift in operational performance.
Subsequent quarters demonstrated continued growth, with March 31, 2024, recording a return of 3.86%, and June 30, 2024, at 6.02%. By September 30, 2024, the return achieved 8.00%, and it slightly increased to 8.21% at December 31, 2024, indicating ongoing improvement and efficient utilization of capital.
The trend persisted into the first quarter of 2025, with a return of 9.38%, suggesting that CAVA Group, Inc. is demonstrating strengthening ability to generate profits relative to its total capital base. Overall, the data indicates a substantial turnaround from continued losses into positive returns, reflecting operational efficiencies, strategic gains, and potentially enhanced profitability over time.
Peer comparison
Mar 31, 2025