CAVA Group, Inc. (CAVA)

Interest coverage

		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
Interest expense (ttm)	US$ in thousands	0	0	0	0	0	25	240	455	489	807	1,367
Interest coverage		—	—	—	—	—	380.88	-38.51	-31.82	-51.46	-52.94	-31.88

March 31, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $68,106K ÷ $0K
= —

The interest coverage ratios for CAVA Group, Inc. over the observed periods exhibit a significant fluctuation, with a notably negative trend during the fiscal quarters ending in 2022 and the first half of 2023. Specifically, the ratios for September 30, 2022, through June 30, 2023, remained negative, with values ranging from approximately -31.88 to -52.94, indicating that the company's earnings before interest and taxes (EBIT) were insufficient to cover its interest expenses during these periods. Such negative ratios suggest substantial challenges in meeting interest obligations purely from operating income, pointing toward either significant operating losses or high interest costs that outweigh earnings.

A remarkable change is observed at December 31, 2023, when the interest coverage ratio dramatically shifts to a positive figure of 380.88. This indicates a strong improvement in CAVA Group’s ability to service its interest obligations, likely due to a substantial increase in operating income, a reduction in interest expenses, or a combination of both. The disparity between prior negative ratios and this sharply positive ratio suggests a significant transformation in the company's financial performance or capital structure during this period.

However, subsequent quarters into 2024 show no reported interest coverage ratios, with data marked as unavailable (represented by "—"), which could imply the absence of relevant financial data or that the company did not have interest expenses during these periods.

Overall, the trend indicates a period of considerable financial distress in 2022 and early 2023, followed by a notable turnaround towards the end of 2023. This turnaround signals potential improvements in profitability or changes in financing arrangements, although the absence of data for subsequent periods constrains a continuous assessment. The data underscores the importance of monitoring future financial statements to confirm whether this positive trend persists and to understand the underlying factors contributing to these shifts.