CAVA Group, Inc. (NYSE:CAVA) Q3 2023 Earnings Call Transcript

Page 6 of 6

Aisling Grueninger: Great. Thanks for the color.

Operator: Thank you. The next question comes from Alton Stump from Loop Capital. Please go ahead.

Alton Stump: Great. Thanks so much for taking my questions. Just wanted to go back to the input cost front. Obviously, after, over the last 18 months, seeing 40-year-high inflation, things seemed to be settling down. But as I just kind of think about input costs versus pricing heading into next year, do you think that particular bucket is a positive or a negative to your store-level margin next year versus this year?

Tricia Tolivar: Yes. So we mentioned on the call that we anticipate raising pricing in January in the 2.5% to 3% range, and the input cost on the commodity side is in the low to mid-single digits. And then as we also discussed, we’ve got some investments on the labor side that we have made and then are also exploring. So I think if you take all of that into consideration, that would give you a good view into what the impacts are going to be overall from a restaurant-level margin perspective.

Alton Stump: Got it. Very helpful. And then I guess one quick follow-up and I’ll hop back in the queue. But just, I mean, on the pricing front, actually just touch on what your plans are for earlier next year, how competitive an environment do you think it will be? You guys are actually tracking a much more positive traffic trends than almost anyone right now in the space. You’ve got probably more room than most. But just kind of how you feel about the pricing versus your competition moving into next year.

Tricia Tolivar: Yes. So we’re very mindful of pricing and where we sit versus the competition. While Brett touched on how it’s really difficult to create the CAVA experience at home, we want to make sure that we’re accessible to as many guests as we possibly can be. So as we think about pricing, we’re very thoughtful about that and feel we’re very well positioned against our competitors to create that accessibility but also perform well for the business overall.

Alton Stump: Got it. Great. Thanks so much. Congrats on the quarter.

Operator: Thank you. As there are no further questions, I will turn the call back over to Brett Schulman, CEO and Co-Founder, for closing comments.

Brett Schulman: Thanks, everyone, for joining the call today. I want to thank our teams once again for delivering an exceptional third quarter, which provides further evidence of the broad appeal of our Mediterranean concept. We have a significant white space opportunity in front of us. As we define and create the next large-scale cultural cuisine category fueled by a powerful unit economic engine, successful new restaurant openings across the country and strategic investments in people and the infrastructure we need to scale, we are extending our clear leadership position. We’re keeping a close eye on macroeconomic conditions, but our focus is on building a durable brand that can deliver value over the long term, and we couldn’t be more excited about what the future holds. Thanks again for joining us. I look forward to speaking with you next quarter. And in the meantime, we wish you a happy holiday season.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you to please disconnect your lines.

Follow Cava Group Inc.

Page 6 of 6