Q3 2025 Cava Group Inc Earnings Call

Following the presentation, we will conduct a question and answer session. If at any time. During this call you required immediate assistance. Please press star zero for the operator.

Matt Milanovich: Now I'll turn the call over to the company's co-founder and CEO, Brett Schulman.

This call is being recorded on Tuesday November 4th 2025, I would now like to turn the conference over to Matt <unk> head of Investor Relations. Please go ahead.

Brett Schulman: Thanks, Matt, and welcome to the call, everyone. During Q3 2025, we continue to strengthen our leadership in Mediterranean, a category we have pioneered and are rapidly growing while staying true to our mission of bringing heart, health, and humanity to food. As consumers today face a challenging environment, the relevance of Mediterranean cuisine and the way we deliver it at CAVA continues to resonate deeply. This differentiation enables strong average unit volumes, consistent value creation, and the structural strength of our model. With growing market share and significant white space ahead, we remain confident and steadfast in our ability to create lasting value, build enduring guest loyalty, and reinforce our position as the clear leader of the Mediterranean category.

Good afternoon, and welcome to <unk> third quarter 2025 financial results Conference call.

Before we begin if you do not already have a copy of the earnings release and related 8-K furnished to the SEC are available on our website at investor Dot Com and Dot com.

The purpose of this conference call is to give investors further details regarding the company's financial results as well as a general update on the company's progress.

You will find reconciliations of any non-GAAP financial measure.

Speaker #1: Good afternoon , ladies and gentlemen , and welcome to the Cava Q3 2025 Earnings Call . At this time , all lines are in listen only mode .

Discussed on today's call to the most directly comparable financial measure.

Calculated in accordance with GAAP to the extent available without unreasonable efforts.

Speaker #1: Following the will conduct a question and answer session . If at any time during this call , you require immediate assistance , please press zero for the operator .

Speaker #1: presentation , we

In today's earnings release, and supplemental deck, each of which is posted on the company's website.

Brett Schulman: Our Q3 highlights include a 20% increase in CAVA revenue and a 66.8% increase over the last two years, CAVA's same-restaurant sales growth of 1.9%, restaurant-level profit margin of 24.6%, 17 net new restaurants, ending the quarter with 415 restaurants, a 17.9% increase year over year, adjusted EBITDA of $40 million, a 19.6% increase over Q3 2024, net income of $14.7 million, and $23.3 million in year-to-date free cash flow. As I've shared in prior quarters, our brand proposition is strong and continues to strengthen, as reflected in our expanding market share. Since 2019, while overall restaurant industry sales have grown, industry transactions have declined, yet CAVA has not only maintained but increased our market share significantly by delivering on our promise of high-quality food, brand relevance, curated guest experiences, and seamless convenience.

Before we begin let me remind everyone that this call will contain forward looking statements for this purpose.

Speaker #1: This call is being recorded on Tuesday , November 4th , 2025 . I would now like to turn the conference over to Matt Milanovich , Head of Investor Relations .

Any statements made during this call that are not statements of historical fact may be deemed to be forward looking statements.

Speaker #1: Please go ahead .

Investors should be aware that any forward looking statements are subject to various risks and uncertainties.

Speaker #2: Good afternoon and welcome to Corvas Third Quarter 2020 financial Results conference call . Before we begin , if you do not already have a copy , the earnings release and Related 8-K furnished to the SEC are available on our website at investor .

It could cause actual results to differ materially from those discussed here today.

These risk factors are explained in detail in comp with most recent annual report.

On Form 10-K as may be updated by its reports on Form 10-Q, and other filings with the SEC.

Speaker #2: The purpose of this conference call was to give investors further details regarding the company's financial

Speaker #2: The purpose of this conference call was to give investors further details regarding the company's financial results , as well as a general update on the company's progress .

Please refer to these filings for a more detailed discussion of forward looking statements and the risks and uncertainties of such statements. All forward looking statements are made as of today and except as required by law.

Speaker #2: You will find reconciliations of non-GAAP financial measure discussed on today's call to the most directly comparable financial measure calculated in accordance with GAAP .

<unk> undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information future developments or otherwise.

Speaker #2: To the extent available , without unreasonable efforts in today's earnings release and supplemental deck , each of which is posted on the company's website .

And now I'll turn the call over to the Companys co founder and CEO Fred Sean.

Speaker #2: Before we begin , let me remind everyone that this call will contain forward looking statements . For this purpose , any statements made during this call that are not statements of historical fact may be deemed to be forward looking statements .

Thanks, Matt and welcome to the call everyone.

During the third quarter of 2025, we continue to strengthen our leadership in Mediterranean a category. We have pioneered in a rapidly growing while staying true to our mission of bringing heart health and humanity to food.

Brett Schulman: During that same time frame, we have worked relentlessly to make our food more accessible to guests, underpricing CPI by almost 10% while taking less than half the aggregate 34% price increases of industry peers. At the same time, we recognize that today's environment is creating real pressures for consumers, especially younger guests who are making more deliberate choices about where they spend. It's incumbent upon restaurants to deliver exceptional experiences and differentiated value to guests. That's why the foundation my co-founders and I built 15 years ago is more important than ever. From day one, our aspiration was simple: to make our Mediterranean cuisine accessible to communities across the country, delivering it with welcoming hospitality while serving as a platform for our team members to build a career, not just have employment. This concept essence continues to guide everything we do to this day.

Speaker #2: Investors should be aware that any forward looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those discussed here today .

As consumers today face a challenging environment, the relevance of Mediterranean cuisine, and the way we deliver it at cava continues to resonate deeply.

Speaker #2: These risk factors are explained in detail in this most recent annual Report on Form 10-K , as may be updated by its reports on Form 10-q and other filings with the SEC .

This differentiation enabled strong average unit volumes consistent value creation and the structural strength of our model.

Speaker #2: Please refer to these filings for a more detailed discussion of forward looking statements and the risks and uncertainties of such statements . All forward looking statements are made as of today , and except as required by law , Kava undertakes no obligation to publicly update or revise any forward looking statements , whether as a result of new information , future developments or otherwise .

With growing market share and significant white space ahead, we remain confident and steadfast in our ability to create lasting value.

Build enduring guest loyalty and reinforce our position as the clear leader of the Mediterranean category.

Our third quarter highlights include a 20% increase in copper revenue and a 66, 8% increase over the last few years.

Speaker #2: And now I'll turn the call over to the company's co-founder and CEO , Brett Schulman . Thanks , Matt , welcome to the call , everyone .

Speaker #2: And now I'll turn the call over to the company's co-founder and CEO , Brett Schulman . Thanks , Matt , and strengthen leadership in Mediterranean .

Kind of a same restaurant sales growth of one 9%.

Restaurant level profit margin of 24, 6%.

Speaker #2: A category we have pioneered and are rapidly growing . While staying true to our mission of bringing heart , health and humanity to food .

17, net new restaurants, ending the quarter with 415 restaurants, a 17, 9% increase year over year.

Brett Schulman: As we capture the white space opportunity ahead of us, our growing market share is driven by the intention rooted in our first strategic pillar, expand our Mediterranean way in communities across the country. During Q4, we opened 17 net new restaurants, bringing our total restaurant count to 415 locations across 28 states and the District of Columbia. Amongst them was our highly anticipated Brickell opening in Miami, where the energy and enthusiasm from our guests was palpable, a powerful reminder that with every new CAVA, we're not just growing our footprint but also deepening connection and fostering community. Recent openings also highlight Project SOUL, our restaurant redesign initiative that brings the Mediterranean way to life through warm tones, greenery, natural light, and softer seating, design elements that turn our restaurants into welcoming places to dine.

Speaker #2: As consumers today face a challenging environment , the relevance of Mediterranean cuisine and the way we deliver it at Cava continues to resonate deeply .

Adjusted EBITDA is $40 million a.

A 19, 6% increase over the third quarter of 2024.

Speaker #2: This differentiation enables strong average unit volumes , consistent value creation and the structural strength of our model . With growing market share and significant whitespace ahead .

Net income of $14 7 million and $23 $3 million and year to date free cash flow.

As I've shared in prior quarters, our brand proposition is strong and continues to strengthen as reflected in our expanding market share.

Speaker #2: We remain confident and steadfast in our ability to create lasting value , build enduring guest loyalty , and reinforce our position as the clear leader of the Mediterranean category .

Since 2019, while overall restaurant industry sales have grown industry transactions have declined yes, Carver has not only maintained but increased our market share significantly delivering on our promise of high quality food brand relevance curated guest experiences and seamless convenience.

Speaker #2: Our third quarter highlights include a 20% increase in revenue and a 66.8% increase over the last two years . Same our restaurant sales growth of 1.9% , restaurant level profit margin of 24.6% , 17 net new restaurants ending the quarter with 415 restaurants , a 17.9% increase year over year .

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During that same timeframe, we have worked relentlessly to make our food more accessible to guests underpricing CPI by almost 10%, while taking less than half the aggregate, 34% price increases of industry peers.

Brett Schulman: The Project SOUL prototype is now finished, and the complete design will roll out in new openings next year. Just as our environments invite connection, so do our bold Mediterranean flavors. Earlier this quarter, we introduced our latest protein innovation, Chicken Shawarma, juicy roasted chicken breast marinated in a signature spice blend and hand-stacked on a spit. The launch performed to our market test expectations, with incidence levels that showed strong guest responsiveness and healthy engagement across our restaurants. It's another example of how distinctive, innovative, and satisfying flavors rooted in health continue to resonate with our guests. That same spirit of innovation comes through with our recent salmon market test, which has shown encouraging results. Salmon is a natural fit for our menu and represents an exciting milestone as our first-ever seafood offering.

Speaker #2: Adjusted EBITDA of 40 million . A 19.6% increase over the third quarter of 2024 . Net income of 14.7 million and $23.3 million in year to date free cash flow .

At the same time, we recognize that today's environment is creating real pressures for consumers, especially younger guests, who are making more deliberate choices about where they spend it.

As incumbent upon restaurants to deliver exceptional experiences and differentiated value to guests.

Speaker #2: As I've shared in prior quarters , our brand proposition is strong and continues to strengthen as reflected in our expanding market share . Since 2019 .

That's why the foundation my co founders and I built 15 years ago is more important than ever.

From day, one our aspiration was simple to make our Mediterranean cuisine accessible to communities across the country delivering it with welcoming hospitality, while serving as a platform for our team members to build a career not just an unemployment.

Speaker #2: While overall restaurant industry sales have grown . Industry transactions have declined . Yet cava has not only maintained but increased our market share significantly by delivering on our promise of high quality food brand relevance , curated guest experiences and seamless convenience .

This concept essence continues to guide everything we do to this day.

As we capture the white space opportunity ahead of us are growing market share is driven by the intention rooted in our first strategic pillar expand our Mediterranean way in communities across the country.

Speaker #2: During that same time frame , we have worked relentlessly to make our food more accessible to guests . Underpricing , CPI by almost 10% while taking less than half the aggregate 34% price increases of industry peers .

Brett Schulman: Our roasted flaky filet, marinated in a subtly sweet blend of paprika, harissa, red wine vinegar, and bold spices, not only complements our Mediterranean flavors beautifully but also broadens the variety we can offer guests. Early results reaffirm the strong potential we see, and if performance continues, we will plan to expand salmon more broadly across our restaurants in late spring of 2026. While proteins like salmon and Chicken Shawarma remain a critical focus of our culinary innovation pipeline, we also know that smaller touches can carry just as much weight in keeping our guests excited. Our pita chips are a perfect example. Last month, we introduced Cinnamon and Sugar Pita Chips, dusted with cinnamon, sugar, and a hint of cardamom, paired with honey for dipping, a sweet twist on a fan favorite that brings both snacking and dessert occasions to life.

During the third quarter, we opened 17 net new restaurants, bringing our total restaurant count to 415 locations across 28 states and the district of Columbia.

Speaker #2: At the same time , we recognized that today's environment is creating real pressures for consumers , especially younger guests who are making more deliberate choices about where they spend .

Amongst them was our highly anticipated brickell opening in Miami for the energy and enthusiasm from our guests was palpable a powerful reminder, that with every new cava, we're not just growing our footprint, but also deepening connection and fostering community.

Speaker #2: incumbent upon restaurants to deliver exceptional experiences and differentiated value to guests . That's why the foundation my co-founders and I built 15 years ago , is more important than ever It's .

Speaker #2: From day one , our aspiration was simple to make our Mediterranean cuisine accessible to communities across the country . With welcoming hospitality . While serving as a platform for our team members to build a career , not just have employment .

Recent openings also highlight projects sold a restaurant redesign initiative that brings the Mediterranean way to life through warm tones greenery natural light and softer CV design.

Design elements that turn our restaurants and to welcoming places to die.

Speaker #2: This concept , has continues to guide everything we do to this day as we capture the white opportunity ahead of us . Our growing market share is driven by the intention rooted in our first strategic pillar .

The project Sol prototype is now finished and the complete design will rollout and new openings next year.

Brett Schulman: Shifting to our second pillar, deepen personal relationships with guests, even as we scale. This past October marked the one-year anniversary of our Rewards Reimagined relaunch, and since then, the program has grown by approximately 36% and has become a key platform for connecting with guests in a more personal, meaningful, and creative way. Building on that momentum, we recently introduced tiered status levels as the next phase of the program. Through our new Sea, Sand, and Sun structure, members now enjoy differentiated benefits, and surprise-and-delight experiences designed to celebrate their loyalty and strengthen long-term engagement. As an extension of our brand's spirit of generosity, we also launched status matching to welcome new members and encourage deeper participation. While status matching is a first-of-its-kind offering in our industry, we see it simply as another way to express our concept essence.

And just as our environments invite connection so do our bolt Mediterranean flavors earlier this quarter, we introduced our latest protein innovation should can swarming juicy roasted chicken breast marinated in a signature spice blend enhanced stacked on a spin.

Speaker #2: Expand our Mediterranean way in communities across the country . During the third quarter , we opened 17 net new restaurants , bringing our total restaurant count to 415 locations across 28 states and the District of Columbia .

The launch performed to our market test expectations with incidence levels that showed strong guests' responsiveness and healthy engagement across our restaurants. Another example of how distinctive innovative and satisfying flavors rooted in health continued to resonate with our guests.

Speaker #2: Amongst them was our highly anticipated opening in Miami , where the energy and enthusiasm from our guests was palpable . A powerful reminder that with every new cava , we're not just growing our footprint , but also deepening connection and fostering community .

Speaker #2: Recent openings also highlight Project Soul , our restaurant redesign initiative that brings the Mediterranean way to life through warm tones , greenery , natural light and softer seating design elements that turn our restaurants into welcoming places to dine .

That same spirit of innovation comes through with our recent salmon market test, which has shown encouraging results.

Salmon is a natural fit for our menu and represents an exciting milestone as our first ever seafood offering.

Our roasted flaky fillet marinated in a suddenly suite lender.

Speaker #2: The project Soul prototype is now finished , and the complete design will roll out in new openings next year . And just as our environments invite connection , so do our bold Mediterranean flavors .

Brett Schulman: The latest evolution of our program also includes an expanded rewards catalog with seasonal offerings, and fresh new ways to engage. With every enhancement, our goal is to create a deeper sense of belonging and continuity for our guests. Whether it's elevating hospitality, improving order accuracy, or better speed of service, at our core is our commitment to building a strong operational foundation. Regardless of near-term cyclical pressures on the consumer, we're doubling down and focusing now more than ever on delivering for the long term with exceptional guest experiences, and ensuring that our restaurants are staffed with team members that are equipped, empowered, and trained to run great restaurants every location, every shift, our third strategic pillar. The role technology plays in our restaurants is important, and providing our team members with the tools to deliver consistently great experiences is a key focus area.

Teresa Red wine vinegar, and boltel spaces, not only complements our Mediterranean flavors beautifully, but also broadens the variety we can offer guests.

Speaker #2: Earlier this quarter , we introduced our latest protein innovation Chicken Shawarma Juicy roasted chicken breast , marinated in a signature spice blend and hand stacked on a spit .

Early results reaffirm the strong potential we see in our performance continues we will plan to expand expand seven more broadly across our restaurants in late spring of 2026.

Speaker #2: The launch , performed to our market test expectations with incidence levels that showed strong guest responsiveness and healthy engagement across our restaurants . It's another example of how distinctive , innovative , and satisfying flavors rooted in health continue to resonate with our guests .

While proteins like salmon and chicken Sharma remain a critical focus of our culinary innovation pipeline. We also know that smaller touches can carry just as much weight and keeping our guests six sites.

A pita chip sorry, Perfect example, last month, we introduced cinnamon and sugar pita chips, dusted with cinnamon sugar and a hint of cardamom paired with honey for dipping suite twist on a fan favorite that brings both snacking and dessert occasions to life.

Speaker #2: That same spirit of innovation comes through with our recent salmon market test , which has shown encouraging results . Salmon is a natural fit for our menu and represents an exciting milestone as our first ever seafood offering .

Shifting to our second pillar deep and personal relationships with guests even as we scale. This past October marked the one year anniversary of our rewards re imagined relaunch and since then the program has grown by approximately 36% as become a key platform for connecting with guests in a more personal <unk>.

Speaker #2: Our roasted flaky filet marinated in a subtly sweet blend of pine berries , red wine vinegar and bold spices . Not only complements our Mediterranean flavors beautifully , but also broadens the variety we can offer guests .

Brett Schulman: An initiative in that spirit is our new Kitchen Display System, which we are now on track to roll out to at least 350 locations by year-end, with over 200 restaurants live today. We are continuing to see encouraging results as restaurants with the new KDS are experiencing higher guest satisfaction scores, driven by improved visual accuracy and proactive guest order status notification capabilities. In addition to improvements across technology, we're also investing in equipment that makes our restaurants easier to run, such as our TurboChef ovens. All CAVA restaurants are now equipped with a TurboChef oven. These ovens allow for faster, more consistent cook times, enabling simpler execution in our restaurants while elevating food quality. Both the TurboChef and KDS investments help reinforce execution in our kitchens while allowing our teams to focus on what matters most: delivering a great guest experience.

Speaker #2: Early results reaffirm the strong potential we see , and the performance continues . We will plan to expand salmon more broadly across our restaurants in late spring of 2026 .

<unk> and creative ways.

Building on that momentum, we recently introduced tiered status levels as the next phase of the program.

Through our new C sand and Sun structure members now enjoy differentiated benefits and surprise and delight experiences designed to celebrate their loyalty and strengthen long term engagement.

Speaker #2: While proteins like salmon and chicken shawarma remain a critical focus of our culinary innovation pipeline , we also know that smaller touches can carry just as much weight .

Speaker #2: In keeping our guests excited . Our pita chips are a perfect example . Last month , we introduced cinnamon and sugar pita chips dusted with cinnamon , sugar and a hint of cardamom paired with honey for dipping .

As an extension of our brand spirit of generosity. We also launched status matching to welcome new members and encourage deeper participation.

While status matching as a first of its kind offering in our industry, we see it simply as another way to express our concept essence.

Speaker #2: A sweet twist on a fan favorite that brings both snacking and dessert occasions to life . Shifting to our second pillar , deep and personal relationships with guests .

Later evolution of our program also includes an expanded rewards catalog with seasonal offerings and fresh new ways to engage.

Speaker #2: Even as we scale this past October marked the one year anniversary of our rewards reimagined relaunch . And since then , the program has grown by approximately 36% and has become a key platform for connecting with guests in a more personal , meaningful and creative ways .

Brett Schulman: We are at a meaningful moment in our growth journey, and we know it is crucial to invest in training and developing our team members. Today, I'm excited to introduce our new Flavor Your Future initiative, a holistic team member development program designed to attract, develop, and retain CAVA's future leaders. One of the first actions under this initiative is the launch of our new Assistant General Manager program, an evolution of our current General Manager and Training role. This role provides more experienced leadership in our restaurants on more shifts throughout the week, ensuring a clear number two leader is always in place. It will also create a stronger pipeline of role-ready leaders to take on the GM role as we scale and open more restaurants.

With every enhancement our goal is to create a deeper sense of belonging and continuity for our guests.

Whether it's elevating hospitality improving order accuracy for better speed of service at our core is our commitment to building a strong operational foundation.

Speaker #2: Building on that momentum , we recently introduced tiered status levels as the next phase of the program . Through our new sand and sun structure , members now enjoy differentiated benefits and surprise and delight experiences designed to celebrate their loyalty and strengthen long term engagement .

And regardless of near term cyclical pressures on the consumer we're doubling down and focusing now more than ever on delivering for the long term with exceptional guest experiences and ensuring that our restaurants are staffed with team members that are equipped empowered and trained to run great restaurants every location every shift our third.

Speaker #2: As an extension of our brand's spirit of generosity , we also launched status Matching to welcome new members and encourage deeper participation . While status matching is a first of its kind offering in our industry .

Strategic pillar <unk>.

The role technology plays in our restaurants is important and providing our team members with the tools to deliver consistently great experiences is a key focus area.

Brett Schulman: Today, about 20% of our leaders are ready for immediate elevation, 50% will be role-ready with additional training over the next quarter, and the remaining 30% likely sourced externally. The AGM role is just one component of a broader leadership initiative that we are excited to share more about in the quarters ahead. Our commitment to developing team members into restaurant managers remains a core near-term focus, and we're excited about the opportunity to build the next generation of CAVA leaders. You can see the power of that commitment in stories like that of Angelo Miranda at our Millennium location. Angelo started as a team member eager to learn and grow. Under the guidance of his then General Manager, Reuben Hogwin, he learned the business from the ground up. He developed his leadership skills through consistent coaching, feedback, and belief in his potential.

Speaker #2: We see it simply as another way to express our concept essence. The latest evolution of our program also includes an expanded rewards catalog with seasonal offerings and fresh new ways to engage with every enhancement.

An initiative in that spirit as our new kitchen display system, which we are now on track to rollout to at least 350 locations by year end with over 200 restaurants live today.

Speaker #2: Our goal is to create a deeper sense of belonging and continuity for our guests. Whether it's elevating hospitality, improving order accuracy, or better speed of service, at our core is our commitment to building a strong operational foundation.

We are continuing to see encouraging results as restaurants with the new key DFS are experiencing higher guest satisfaction scores driven by improved digital accuracy and proactive guest order status notification capabilities.

In addition to improvements across technology. We're also investing in equipment that makes our restaurants easier to run such as our turbo chef ovens.

Speaker #2: And regardless of near-term cyclical pressures on the consumer , we're doubling down and focusing now more than ever on delivering for the long term with exceptional guest experiences and ensuring that our restaurants are staffed with team members that are equipped , empowered and trained to run great restaurants .

All of our restaurants are now equipped with a turbo chef oven.

Ovens allow for faster more consistent Cook times, enabling simpler execution in our restaurants, while elevating food quality.

Speaker #2: Every location , every shift . Our third strategic pillar , the role technology plays in our restaurants is important and providing our team members with the tools to deliver consistently great experiences is a key focus area .

Brett Schulman: Over the years, that investment has paid off. Today, Angelo leads the same restaurant where he began his journey, now as a General Manager, inspiring the next generation of team members to do the same. When I visited Millennium earlier this month, I saw firsthand the culture of growth and pride that Angelo and his team have built. Angelo was quick to introduce me to his high-potential team members he is developing as future CAVA restaurant leaders. It's a true reflection of what happens when we invest in people and create pathways for them to lead. Angelo's original GM, Reuben, is now an area leader overseeing nine restaurants. Our mission is to bring heart, health, and humanity to food, and it continues to drive our strategy, shape our culture, and inspire the work of more than 13,000 team members each day.

Both the turbo chef and GDS investments help reinforce execution in our kitchens, while allowing our teams to focus on what matters, most delivering a great guest experience.

Speaker #2: An initiative in that spirit is our new kitchen display system , which we are now on track to roll out to at least 350 locations by year end , with over 200 restaurants live today , we are continuing to see encouraging results as restaurants with the new KDS are experiencing higher guest satisfaction scores driven by improved digital accuracy and proactive guest order status notification capabilities .

We are at a meaningful moment in our growth journey and we know it is crucial to invest in training and developing our team members today I'm excited to introduce our new flavor your future initiatives.

Holistic team member development program designed to attract develop and retain Cabos feature leaders.

One of the first actions under this initiative is the launch of our new Assistant General manager program and evolution of our current general manager and training role.

Speaker #2: In addition to improvements across technology . We're also investing in equipment that makes our restaurants easier to run , such as our turboshaft ovens .

<unk> provides more experienced leadership in our restaurants are more shifts throughout the week, ensuring a clear number two leader is always in place.

Speaker #2: All restaurants are now equipped with a turboshaft oven . These ovens allow for faster , more consistent cook times , enabling simpler execution in our restaurants .

Brett Schulman: To our teams, and to all of you who share in this journey, thank you. With that, I'll pass the call off to Tricia to walk you through the financials. Thanks, Brett. Hello, everyone. CAVA revenue in the third quarter of 2025 grew 20% year over year to $289.8 million and 66.8% compared to the third quarter of 2023. During the quarter, we opened 17 net new restaurants, bringing our total CAVA restaurant count to 415 restaurants. CAVA's same restaurant sales increased 1.9%, primarily from menu price and product mix, with guest traffic approximately flat. On a two-year basis, same restaurant sales accelerated 350 basis points to 20%. On a three-year basis, same restaurant sales remained relatively stable at 34.1%. Despite lapping strong prior year results and navigating macroeconomic pressures, we continue to grow our market share and are confident in the underlying structural strength of the business.

We'll also create a stronger pipeline of ROE ready leaders to take on the GM role as we scale and open more restaurants.

Speaker #2: While elevating food quality, both the turboshaft NCDs investments help reinforce execution in our kitchens, while allowing our teams to focus on what matters most: delivering a great guest experience.

Today about 20% of our leaders are ready for immediate elevation, 50% will be roll ready with additional training over the next quarter and the remaining 30% likely source externally.

The AGM role is just one component of a broader leadership initiative that we're excited to share more about in the quarters ahead.

Speaker #2: We are at a meaningful moment in our growth journey , and we know it is crucial to invest in training and developing our team members .

Speaker #2: Today , I'm excited to introduce our new flavor Your feature initiative , a holistic team member development program designed to attract , develop and retain future leaders .

Our commitment to developing team members into restaurant managers remains a core near term focus and we're excited about the opportunity to build the next generation of copper leaders.

You can see the power of that commitment and stories like that of Angelo Miranda at our Millennium location Angeles started as a team member eager to learn and grow under the guidance of his than general manager Ruben Hoagland, you learn the business from the ground up.

Speaker #2: One of the first actions under this initiative is the launch of our new Assistant General Manager program , an evolution of our current General Manager and training role .

Speaker #2: This role provides more experienced leadership in our restaurants , on more shifts throughout the week , ensuring a clear number two leader is always in place .

He developed his leadership skills through consistent coaching feedback and belief in us potential.

Speaker #2: It will also create a stronger pipeline of role ready leaders to take on the GM role . As we scale and open more restaurants .

Over the years that investment has paid off today Angelo leads the same restaurant, where he began his journey now as the general manager inspiring the next generation of team members to do the same.

Speaker #2: Today , about 20% of our leaders are ready for immediate elevation , 50% will be role ready with additional training over the next quarter and the remaining 30% likely sourced externally .

Brett Schulman: Our new restaurant productivity remains above 100%, underscoring the resonance of our brand. CAVA restaurant-level profit in the third quarter was $71.2 million, or 24.6% of revenue, versus $61.8 million, or 25.6% of revenue in the third quarter of 2024, representing a 15.1% increase. CAVA's food, beverage, and packaging costs were 30.1% of revenue, higher than the third quarter of 2024 by 20 basis points. This slight increase reflects the impact of tariffs and our limited-time-only Chicken Shawarma offering. CAVA labor and related costs were 25.5% of revenue, an increase of approximately 10 basis points from the third quarter of 2024. This increase in labor and related costs reflects investments in our team member wages of approximately 2%, partially offset by leverage from higher sales.

I visited Millenia earlier this month I saw firsthand the culture of growth and pride with Angelo and his team have built.

Speaker #2: The AGM role is just one component of a broader leadership initiative that we are excited to share more about in the quarters ahead .

Angela was quick to introduce me to as high potential team members. He is developing as future copper restaurant leaders. It's a true reflection of what happens when we invest in people and create pathways for them to leave and Angelos original GM Ruben. He is now an area leader overseeing nine restaurants.

Speaker #2: Our commitment to developing team members into restaurant managers remains a core near-term focus , and we're excited about the opportunity to build the next generation of leaders .

Speaker #2: You can see the power of that commitment in stories like that of Angelo Miranda at our millennial location . Angelo started as a team member eager to learn and grow under the guidance of his then general manager , Ruben Holguin .

Our mission is to bring heart health and humanity to food and it continues to drive our strategy shape, our culture and inspire the work of more than 13000 team members each day to our teams and to all of you who share in this journey. Thank you and with that I'll pass the call off Patricia to walk you through the final.

Speaker #2: He learned the business from the ground up . He developed his leadership skills through consistent coaching , feedback and belief in his potential .

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Speaker #2: Over the years , that investment has paid off . Today , Angelo leads the same restaurant where he began his journey . Now as a general manager , inspiring the next generation of team members to do the same .

Thanks, everyone.

Everyone.

Revenue in the third quarter at 2025, 20% year over year to $289 8 million and 66, 8% compared to the third quarter of 2023 during the quarter.

Speaker #2: When I visited Millennia earlier this month, I saw firsthand the culture of growth and pride that Angelo and his team have built.

Brett Schulman: CAVA occupancy and related expenses were 6.7% of revenue, an improvement of 10 basis points from the third quarter of 2024, driven primarily by increased sales leverage. CAVA other operating expenses were 13.1% of revenue, reflecting an increase of 80 basis points from the third quarter of 2024. This increase was due to a higher mix of third-party delivery, insurance costs, and other individually insignificant items. Shifting to overall performance, our general and administrative expenses for the quarter, excluding stock-based compensation and executive transition costs, were 9.4% of revenue, compared with 10.8% of revenue in the third quarter of 2024. This 140 basis point improvement was primarily due to lower performance-based incentive compensation, leverage from higher sales, and lower legal costs, partially offset by investments to support our future growth. Pre-opening expenses were $4.9 million in the current quarter, compared with $2.8 million in the prior year quarter.

Speaker #2: Angelo was quick to introduce me to his high potential team members . He is developing as future restaurant leaders . It's a true reflection of what happens when we invest in people and create pathways for them to lead .

17, net new restaurants, bringing our total common restaurant count to 415 restaurants.

Same restaurant sales increased one 9% primarily from menu price and product mix with guest traffic approximately flat on a two year basis same restaurant count accelerated 350 basis points to 20%.

Speaker #2: In Angelo's original GM , Ruben . He is now an area leader overseeing nine restaurants . Our mission is to bring heart health and humanity to food , and it continues to drive our strategy , shape our culture , and inspire the work of more than 13,000 team members each day .

A three year basis same restaurant sales remained relatively stable at 34, 1%.

Despite lapping strong prior year results and navigating macroeconomic pressures, we continue to grow our market share and are confident in the underlying structural strength of the business.

Speaker #2: To our teams and to all of you who share in this journey , thank you . And with that , I'll pass the call off to Tricia to walk you through the financials .

Speaker #3: Thanks , Brett . And hello everyone . Revenue in the third quarter of 2025 grew 20% year over year to 289.8 million and 66.8% , compared to the third quarter of 2023 .

New restaurant activity remains above 100% underscoring the residents of our brand.

However restaurant level profit in the third quarter was $71 2 million or 24, 6% of revenue versus $61 8 million or 25, 6% of revenue in the third quarter of 2024, representing a 15, 1% increase.

Speaker #3: During the quarter , we opened 17 net new restaurants , bringing our total restaurant count to 415 restaurants for the same restaurant sales increased 1.9% , primarily from menu price and product mix , with guest traffic approximately flat on a two year basis .

Brett Schulman: The $2.1 million increase includes a higher number of units under construction and increased costs on a per-unit basis. Adjusted EBITDA for the third quarter was $40 million, a 19.6% increase versus the third quarter of 2024. The increase in adjusted EBITDA was primarily driven by the number of and continued strength in new restaurant openings, and leverage in general and administrative expenses. Equity-based compensation was $3.3 million in the third quarter, compared with $3.5 million in the prior year quarter. We anticipate full-year equity-based compensation to be between $18 million and $20 million, which includes the 2025 grants as well as the impact of forfeitures. In the third quarter, our effective tax rate was 28.6%. For the full year fiscal 2025, we expect our effective tax rate to be between 10% and 12%.

<unk> average and packaging costs were 31% of revenue higher than the third quarter of 2024 by 20 basis points.

Speaker #3: Same restaurant sales accelerated 350 basis points to 20% on a three-year basis. Same restaurant sales remained relatively stable at 34.1%, despite lapping strong prior year results and navigating macroeconomic pressures.

Slight increase reflects the impact of tariffs and our eliminate time only chicken Sharma offering.

Labor and related costs were 25, 5% of revenue an increase of approximately 10 basis points from the third quarter of 2024.

Speaker #3: We continue to grow our market share and are confident in the underlying structural strength of the business . Our new restaurant productivity remains above 100% , underscoring the resonance of our brand .

Increase in labor and related costs reflects investments in our team member wages are approximately 10%.

Partially offset by leverage from higher sales.

However, occupancy and related expenses were six 7% of revenue an improvement of 10 basis points from the third quarter of 2024, driven primarily by increased Count's flat rates.

Speaker #3: Restaurant level . Profit in the third quarter was 71.2 million , or 24.6% of revenue , versus 61.8 million , or 25.6% of revenue , in the third quarter of 2024 , representing a 15.1% increase .

Other operating expenses by 13, 1% of revenue, reflecting an increase of 80 basis points from the third quarter of 2024. This increase was due to a higher mix of third party delivery insurance costs and other individually insignificant items.

Brett Schulman: As a reminder, our cash taxes will continue to be immaterial until we fully utilize our net operating losses. During the third quarter, we reported $14.7 million of GAAP net income compared to $15 million of adjusted net income in Q3 of 2024. Diluted EPS was $0.12 in the third quarter compared with adjusted diluted EPS of $0.13 in the third quarter of 2024. The slight decrease was due to the allocation of income taxes in the prior year, excluding the release of the valuation allowance, partially offset by higher earnings before taxes. Turning to liquidity, at the end of the quarter, we had zero debt outstanding, $387.7 million in cash and investments, and access to a $75 million undrawn revolver, with an option to increase our liquidity if needed. Year-to-date Q3 cash flow from operations was $144.5 million compared to $131.2 million during the year-to-date period in 2024.

Speaker #3: Corvus food , Beverage and packaging costs were 30.1% of revenue , higher than the third quarter of 2024 . By 20 basis points .

Shifting to overall performance, our general and administrative expenses for the quarter, excluding stock based compensation and executive transition costs.

Speaker #3: This slight increase reflects the impact of tariffs and our limited time only chicken shawarma offering a labor and related costs were 25.5% of revenue and increase of approximately ten basis points from the third quarter of 2024 .

Nine 4% of revenue compared with 10, 8% of revenue in the third quarter of 2024.

Speaker #3: This increase in labor and related costs reflects investments in our team member wages of approximately 2% , partially offset by leverage from higher sales , occupancy and related expenses were 6.7% of revenue and improvement of ten basis points from the third quarter of 2024 , driven primarily by increased sales leverage .

140 basis point improvement, primarily due to lower performance based incentive compensation leverage from higher sales.

Legal costs, partially offset by investments to support our future growth.

The opening expenses are $4 $9 million in the current quarter compared with $2 8 million in the prior year quarter.

Speaker #3: Other operating expenses were 13.1% of revenue , reflecting an increase of 80 basis points from the third quarter of 2024 . This increase was due to a higher mix of third party delivery insurance costs and other individually insignificant items .

<unk> $1 million increase includes a higher number of units under construction an increased cost on a per unit basis.

Adjusted EBITDA for the third quarter with $40 million in 19, 6% increase versus the third quarter of 2024. The increase in adjusted EBITDA was primarily driven by the number of <unk> and continued strength in new restaurant openings and leverage in general and administrative expenses.

Brett Schulman: Year-to-date Q3 free cash flow was $23.3 million. Now to our outlook for full year 2025, we expect the following: 68 to 70 net new CAVA restaurant openings, CAVA same restaurant sales growth of 3% to 4%, CAVA restaurant-level profit margin between 24.4% and 24.8%, pre-opening costs between $18 million and $19 million, and adjusted EBITDA, including the burden of pre-opening costs, between $148 million and $152 million. I'd like to provide some additional context around our updated guidance. As we exited the second quarter, we saw same restaurant sales re-accelerate and were encouraged by the sequential improvement. However, as the third quarter progressed, we experienced some moderation in trends reflecting broader macroeconomic pressures. Entering the fourth quarter, we're seeing further moderation as we continue to lap stronger same restaurant sales from the prior year. As such, we have incorporated these trends into our outlook for the remainder of 2025.

Speaker #3: Shifting to overall performance , our general and administrative expenses for the quarter , excluding stock based compensation and executive transition costs , were 9.4% of revenue , compared with 10.8% of revenue in the third quarter of 2020 .

Equity based compensation was $3 3 million in the third quarter compared with three 5 million in the prior year quarter.

Speaker #3: For this 140 basis point improvement was primarily due to lower performance based incentive compensation leverage from higher sales and lower legal costs , partially offset by investments to support our future growth .

We anticipate full year equity based compensation to be between $18 million and $20 million, which includes a 225 grants as well as the impact of forfeitures.

In the third quarter, our effective tax rate was 28, 6%.

Speaker #3: Pre-opening expenses were 4.9 million in the current quarter , compared with 2.8 million in the prior year quarter . The $2.1 million increase includes a higher number of units under construction and increased costs on a per unit basis .

For the full year fiscal 2025, we expect our effective tax rate to be between 10 and 12%.

As a reminder, our cash taxes will continue to be immaterial until we fully utilize our net operating losses.

Speaker #3: Adjusted EBITDA for the third quarter was $40 million , a 19.6% increase versus the third quarter of 2020 . For the increase in adjusted EBITDA was primarily driven by the number of and continued strength in new restaurant openings and leverage in general , and administrative expenses .

During the third quarter, we reported $14 7 million of GAAP net income compared to $15 million of adjusted net income in Q3 of 2024.

Diluted EPS was <unk> 12 in the third.

Third quarter compared with adjusted diluted EPS of 13 cents in the third quarter of 2024.

Brett Schulman: Our same restaurant sales guidance reflects both the benefit of our recent Chicken Shawarma launch, which performed in line with market test expectations, and the ongoing macro headwinds impacting the industry. Despite these macro pressures, our two-year same restaurant sales stack accelerated by 350 basis points to 20%, underscoring the resilience of our brand and the strength of our guest engagement. Looking ahead, we remain confident in the long-term structural health of the business, reaffirmed by our strong AUVs and new restaurant performance. Our most recent 2025 cohort is trending above $3 million in AUV, with new unit productivity continuing to exceed 100%. Turning to restaurant-level margins, our guidance reflects dynamics we experienced in the third quarter and the anticipated impacts of seasonality on margins. As we look ahead to next year, we remain confident in the structural foundation of the business while being mindful of ongoing macroeconomic pressures.

Slight decrease was due to the allocation of income taxes in the prior year, excluding the release of the valuation allowance, partially offset by higher earnings before taxes.

Speaker #3: Equity based compensation was 3.3 million in the third quarter , compared with 3.5 million in the prior year quarter . We anticipate full year equity based compensation to be between 18 million and 20 million , which includes the 2025 grants , as well as the impact of forfeitures in the third quarter .

Turning to liquidity at the end then a corner, we had zero debt outstanding $387 7 million in cash and investments and accessories 75 million Undrawn revolver, an option to increase our liquidity if needed.

Speaker #3: Our effective tax rate was 28.6% for the full year fiscal 2025 . We expect our effective tax rate to be between 10 and 12% .

Year to date Q3 cash flow from operations was $144 5 million compared to $131 2 million during the year to date period in 2024 year.

Speaker #3: As a reminder , our cash taxes will continue to be immaterial until we fully utilize our net operating losses during the third quarter , we reported 14.7 million of GAAP net income , compared to 15 million of adjusted net income in Q3 of 2024 .

Year to date Q3 free cash flow was $23 3 million.

Now to our outlook for full year 2025, we expect the following 68 to 70 net new restaurant openings.

Speaker #3: Diluted EPs was $0.12 in the third quarter , compared with adjusted diluted EPs of $0.13 in the third quarter of 2020 . For the slight decrease was due to the allocation of income taxes in the prior year , excluding the release of the valuation allowance , partially offset by higher earnings before taxes .

Same restaurant sales growth of 3% to 4% of our restaurant level profit margin between 24, 4% and 24, 8%.

Preopening costs between $18 million and $19 million.

Brett Schulman: Our long-term algorithm targets low to mid-single-digit same restaurant sales growth, and we'll approach our 2026 outlook with appropriate discipline, taking into consideration our strong pipeline of traffic-driving initiatives. In addition, given the health of our 2026 real estate pipeline, we anticipate at least 16% unit count growth. As we navigate today's dynamic environment, our mission to bring heart, health, and humanity to food continues to resonate with guests across the country and is more important than ever. We remain the clear leader of our category, supported by a powerful concept and competitive positioning that are both differentiated and durable. None of this would be possible without our exceptional teams across our restaurants and support centers, whose dedication brings our mission to life every day to drive meaningful experiences for our guests. With that, I will turn the call back over to the operator to open it up for Q&A.

And adjusted EBITDA, including the burden of Preopening costs between 148 and $152 million.

Speaker #3: Turning to liquidity at the end of the quarter , we had zero debt outstanding , $387.7 million in cash and investments , and access to a 75 million undrawn revolver with an option to increase our liquidity if needed .

I'd like to provide some additional context around our updated guidance.

As we exited the second quarter, we saw same restaurant sales reaccelerate and we're encouraged by the sequential improvement however.

Speaker #3: Year to date , Q3 cash flow from operations was 144.5 million , compared to 131.2 million during the year to date period in 2020 .

However, as of third quarter progressed, we experienced a moderation in trend, reflecting broader macro economic pressures.

Entering the fourth quarter, we're seeing further moderation as we continue to lap stronger same restaurant sales from the prior year.

Speaker #3: For . Year to date , Q3 free cash flow was 23.3 million . Now to our outlook for full year 2025 , we expect the following 68 to 70 net new restaurant openings have the same restaurant sales growth of 3% to 4% , have a restaurant level profit margin between 24.4% and 24.8% .

As such we have incorporated these trends into our outlook for the remainder of 2025.

Restaurant sales guidance reflects the benefit of our recent chickens trauma launch, which performed in line with market expectations and the ongoing macro headwinds impacting the industry. Despite.

Despite these macro pressures our two year same restaurant sales stack accelerated by 350 basis points to 20% underscoring the resilience of our brand and the strength of our guest engagement.

Speaker #3: Pre-opening costs between 18 million and 19 million , and adjusted EBITDA , including the burden of pre-opening costs between 148 and 152 million .

Brett Schulman: Thank you. If you would like to ask a question, please take note by pressing Star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Please also only ask one question at a time. If you have another question, please re-enter the queue after your first question has been answered. Again, please press Star 1 to ask the question. We will now take our first question from Andy Barrish with Jeffries. You may now begin. Hey, guys. Last quarter, you kind of. Stack ranked some of the choppiness in same-store sales from. The steak lap to a little bit of consumer. Challenges to the honeymoon. Can you kind of just let us know on the honeymoon side of things if that's changed materially?

Speaker #3: I'd like to provide some additional context around our updated guidance . As we exited the second quarter , we saw same restaurant sales re-accelerate , and we're encouraged by the sequential improvement .

Looking ahead, we remain confident in the long term structural health of the business reaffirmed by our strong <unk> and new restaurant performance amidst recent 2025 co arent is trending above $3 million in AAV with new unit productivity continuing to exceed 100%.

Speaker #3: However , as the third quarter progressed , we experienced some moderation in trends reflecting broader macroeconomic pressures . Entering the fourth quarter , we're seeing further moderation as we continue to lap stronger .

Turning to restaurant level margins, our guidance reflects dynamics, we experienced in the third corner and the anticipated impact of seasonality on margins.

Speaker #3: Same restaurant sales from the prior year . As such , we have incorporated these trends into our outlook for the remainder of 2025 .

As we look ahead to next year, we remain confident in the structural foundation of the business.

Speaker #3: Our same restaurant sales guidance reflects both the benefit of our recent chicken shawarma launch , which performed in line with market test expectations and the ongoing macro headwinds impacting the industry .

Mindful of the ongoing macro economic pressures, our long term algorithm targets low to mid single digit same restaurant sales growth and low approach, our 2026 outlook with appropriate discipline, taking into consideration our strong pipeline of traffic driving initiatives.

Speaker #3: Despite these macro pressures , our two year same restaurant sales stack accelerated by 350 basis points to 20% , underscoring the resilience of our brand and the strength of our guest engagement .

Brett Schulman: I'm assuming most of the choppiness you're seeing now is macro-related, but anything geographically you want to point out would be helpful. Hey, Andy. Thanks for the question. Certainly, the honeymoon impact is very similar to what we experienced last quarter. No change there. We're not seeing anything geographically to call out. It's more around the macro environment and the pressure on the consumer, and certainly lapping the strong same-restaurant sales results that we had in the third quarter of the prior year. We noted it on the call, but on a two-year stack basis, we, in fact, accelerated our same-restaurant sales by 350 basis points to 20%. Thank you. Thank you very much. Our next question comes from Brian Mullen with Piper Sandler. You may now begin. Hey, thank you. Just a question on the test. Brett and Paramar, it sounds like it's going well.

In addition, given the health of our 2026 real estate pipeline, we anticipate at least 16% unit count and grants.

Speaker #3: Looking ahead , we remain confident in the long term structural health of the business , reaffirmed by our strong AUVs and new restaurant performance .

As we navigate todays dynamic environment, our mission to bring heart health <unk> continues to resonate with guests across the country and is more important than ever.

Speaker #3: Our most recent 2025 cohort is trending above 3 million in AUV , with new unit productivity continuing to exceed 100% . Turning to restaurant level margins .

We remain the clear leader of our category supported by a powerful concept and competitive positioning that are both differentiated and terrible none of this would be possible without our exceptional teams across our restaurant support center.

Speaker #3: Our guidance reflects dynamics we experienced in the third quarter and the anticipated impacts of seasonality on margins . As we look ahead to next year , we remain confident in the structural foundation of the business while being mindful of ongoing macroeconomic pressures .

His dedication brings our mission to life every day to drive meaningful experiences for our guests.

With that I will turn the call back over to the operator open it up for Q&A.

Speaker #3: Our long term algorithm targets low to mid digits . Same restaurant sales growth and approach . Our 2026 outlook with appropriate discipline , taking into consideration our strong pipeline of traffic driving initiatives .

Okay.

Thank you.

I would like to ask a question. Please signal by pressing star one on your telephone keypad.

Speaker #3: In addition , given the health of our 2026 real estate pipeline , we anticipate at least 16% unit count growth as we navigate today's dynamic environment .

We are using a speaker phone. Please make sure your mute function is turned off to allow your signal to reach our equipment.

Brett Schulman: Just wondering if you could elaborate a bit on what you're seeing in test. Anything interesting from a daypart perspective between lunch and dinner, or maybe just a guest perspective, age, gender, income, and also how it's going with the operations? Yeah. Thanks, Brian, for the question. We did note we have TurboChef ovens in every restaurant now, which is the equipment we use to roast the salmon. It's a very easy cook procedure and prep and hold procedure. We've been very encouraged by the results. We have seen it drive incremental occasions, and its appeal has been broad-based from a consumer standpoint as well as a daypart standpoint. It is a unique new menu item to add to the variety of our proteins. It's our first seafood item, and excited at its potential.

Please also only ask one question at a time if you have another question. Please reenter the queue. After your first question has been answered.

Speaker #3: Our mission to bring heart health and humanity to food continues to resonate with guests across the country and is more important than ever .

Again, Please press star one to ask a question.

We will now take our first question from Andy Barish with Jefferies. You May now begin.

Speaker #3: We remain the clear leader of our category , supported by a powerful concept and competitive positioning that are both differentiated and durable . None of this would be possible without our exceptional teams across our restaurants and support center , whose dedication brings our mission to life every day to drive meaningful experiences for our guests .

Hey, guys.

Last quarter, you kind of.

Stack rank you know some of the Choppiness in same store sales from the.

The steak lab to a little bit of consumer.

Talent.

The honeymoon can you can you kind of just let us know on our honeymoon side of things if that change materially.

Speaker #3: With that , I will turn the call back over to the operator to open it up for Q&A .

I'm, assuming most of the Choppiness you're seeing now is.

Brett Schulman: If things continue to progress on the current track, as we noted, or as I noted in the prepared remarks, we expect to launch it in late spring in 2026. Thank you very much. Our next question comes from David Tarantino with Baird. You may now begin. Hi. Good afternoon. Brett. I had a question about the operations. I know you made a change in leadership there during the third quarter. I was wondering if you could just address that change and why that happened. I guess you mentioned also tonight doubling down on guest experience and operations. Wondering if you could elaborate on whether you're addressing specific issues or whether that's more of an opportunistic statement as you think about where the business sits today. Yeah, David.

Speaker #1: Thank you . If you would like to ask a question , please signal by pressing Star one on your telephone keypad . If you are using a speakerphone , please make sure your mute function is turned off to allow your signal to reach our equipment .

You know is macro related but anything geographically you want to point out would be helpful.

Hey, Andy Thanks for the question. So certainly the honeymoon impact is very similar to what we experienced last quarter no change there, we're not seeing anything geographically to call out so it's more around the macro environment and the pressure on the consumer and certainly lapping the strong same restaurant sales results that we had in the.

Speaker #1: Please also only ask one question at a time . If you have another question , please reenter the queue after your first question has been answered .

Speaker #1: Again , please press star one to ask a question . We will now take our first question from Andy Barish with Jefferies . You may now begin .

Third quarter of the prior year.

Speaker #4: Hey guys , last quarter you kind of stack ranked . You know , some of the choppiness in same store sales from , you know , the steak lab to a little bit of consumer balances to , you know , the honeymoon .

Noted it on the call but on it.

Two year stack basis to be in fact accelerated our same restaurant sales.

350 basis points to 20%.

Thank you.

Yeah.

Speaker #4: Can you can you kind of just let us know on the honeymoon side of things if that's changed materially and I'm assuming , you know , most of the choppiness you're seeing now is , you know , is macro related .

Thank you very much. Our next question comes from Brian Mullan with Piper Sandler you May now begin.

Okay.

Hey, Thank you just a question on the <unk>.

Brett in prepared remarks, it sounds like it's going well just wondering if you could elaborate a bit on what you're seeing in test anything interesting from a day part.

Speaker #4: But anything geographically , you want to point out would be helpful .

<unk> between lunch and dinner or maybe just the guest perspective age gender income and also how it's going with the operations.

Speaker #3: Hey , Andy , thanks for the question . So certainly the honeymoon impact is very similar to what we experienced last quarter . No change there .

Brett Schulman: Over the course of our 15-year journey, one of the things that's been instrumental in leading to our success is always being proactive and staying in front of the business and making sure we're bringing on the capabilities that we need for the next chapter of our journey and where we're going, not just where we've been and where we are. That transition was in that spirit. As it relates to the operational opportunities, this is the most intense discount environment since the Great Recession. Our value proposition, we believe, is much more holistic than a price point. One of the best things that we can do is deliver exceptional guest experiences. That's foundational to driving traffic over the long term and driving a competitive advantage in concert with our unique, differentiated Mediterranean cuisine. We're just doubling down on that.

Speaker #3: We're not seeing anything geographically to call out . So it's more around the macro environment and the pressure on the consumer . And certainly lapping the strong same restaurant sales results that we had in in the third quarter of the prior year .

Yeah, Thanks, Brian for the question.

We did note we have turboshaft ovens in every restaurant now which is the equipment, we use to Roche the salmon. So it's a very easy comp.

Procedure in prep and the whole procedure and we've been very encouraged by the results. We have seen it drive incremental occasions and its appeal is in broad base from a consumer standpoint, as well as a day part standpoint. So it is.

Speaker #3: So we noted it on the call , but on a two year stack basis , we in fact accelerated our same restaurant sales .

Speaker #3: And by 350 basis points to 20% .

Unique new.

Speaker #4: Thank you .

Menu items to add to the variety of our proteins as our first seafood items and excited at its potential and if things continue to progress on the contract as we noted.

Speaker #1: Thank you very much . Our next question comes from Brian Mullen with Piper Sandler . You may now begin .

As I noted in the prepared remarks, we expect to launch it in late spring in 2026.

Speaker #5: Hey , thank you . Just a question on the Sam test . Prepared remarks . Sounds like it's going well . Just wondering if you could elaborate a bit on what you're seeing in test .

Brett Schulman: It's been core to who we are throughout our journey, and we want to make sure that we're putting our best foot forward in a time when consumers are becoming increasingly discerning about where they're spending their dollars and that we also have the breadth and depth of pipeline to continue to support the new restaurant openings that are opening at record levels and opening them with operational integrity. Makes sense. Thank you. Thank you. Our next question comes from Eric Gonzalez with QBank. You may now begin. Hi. Thanks for the question. You talked about having a strong pipeline of traffic-driving initiatives for the next year. Maybe you could expand on that a bit.

Speaker #5: Anything interesting from a daypart perspective between lunch and dinner ? Or maybe just a guest perspective ? Age . Gender ? Income ? Just .

Okay.

Okay.

Speaker #5: And also, how it's going with the operations.

Thank you very much. Our next question comes from David Tarantino with Baird you May now begin.

Speaker #2: Yeah . Thanks , Brian , for the question . You know , we did note we have Turbo Chef ovens in every restaurant .

Speaker #2: Now , which is the equipment we use to roast the salmon . So it's a very easy cook procedure and prep and hold procedure .

Hi, good afternoon Bret.

Brett.

I had a question about the operation. So I know you made a change in leadership there during the third quarter.

Speaker #2: And we've been very encouraged by the results . We have seen a drive incremental occasions and its appeal has been broad based . From a consumer standpoint as well as a daypart standpoint .

And I was wondering if you could just address that change and why that happened and then.

Brett Schulman: It sounds like you've got at least one protein on deck with salmon in the spring, but I'm curious if you have anything else exciting to call out, such as pita chips, sides, beverages, or desserts that might be interesting and worth noting. Yeah. Thanks for the question. I think the pita chip piece would certainly be relevant next year, sooner than beverages and desserts. Those are definitely category opportunities for us over the long term. Our pita chip platform for innovation has been very successful, and we continue to see opportunities to excite guests through that platform as well as the salmon launch. We will be expanding our catering test later in 2026 to a second market. We're currently testing catering in Houston.

Speaker #2: So it is , you know , a unique new menu item to add to the variety of our proteins . It's our first seafood item .

I guess, you mentioned also tonight doubling down on the guest experience and operations. So wondering if you could elaborate on.

Speaker #2: And excited at its potential . And if things continue to progress on the current track , as we noted , and as I noted in the prepared remarks , we expect to launch it in late spring in 2026 .

Whether you are addressing specific issues or whether that's more of an opportunistic statement as you think about where the business sits today.

Yes, David.

Over the course of our 15 year journey, one of the things that's been instrumental in leading to our success has always been proactive in staying in front of the business and making sure we're bringing on the capabilities that we need for the next chapter of our journey and where we're going not just where we've been and where we are and so that sort of transition was in that spirit in.

Speaker #1: Thank you very much . Our next question comes from David Tarantino with Baird . You may now begin .

Speaker #6: Hi . Good afternoon . Brett , I had a question about the operations . So I know you made a change in leadership .

Brett Schulman: I wouldn't expect a chain-wide launch, but later in 2026, we plan to expand it to a second market in concert with Houston to continue to test and learn and position ourselves for a broader launch. Lastly, I'd say on the marketing front, we have been very efficient and lean in our marketing spend over time, and we continue to test and learn and understand how we can show up in those channels effectively, especially as we communicate our value proposition and our message in a heavily discounting environment. Next year, whether through collaborations or some of the other marketing partnerships that we have opportunities to forge, that's another area that we have not, or another lever that we haven't pulled in a meaningful way to date. Thank you. Thank you. Our next question comes from Andrew Tarles with PD Cowan. You may now begin. Great. Thanks.

As it relates to the operational opportunities. This is the most intense discount environment since the great recession.

Speaker #6: There during the third quarter . And I was wondering if if you could just address that change and why that happened . And then , you know , I guess you mentioned also tonight doubling down on guest experience and operations .

And our value proposition, we believe is much more holistic than a price point and one of the best things that we can do is deliver exceptional guest experiences that's foundational to driving traffic over the long term and driving our competitive advantage in concert with our unique differentiated Mediterranean cuisine.

Speaker #6: So wondering you could elaborate on on whether you're addressing specific issues or whether that's more of an opportunistic statement as you think about where the business sits today ?

Speaker #6: So wondering if

So we're just doubling down on that it's been core to who we are throughout our journey and we want to make sure that we're putting our best foot forward at a time when consumers are becoming increasingly discerning about where they're spending their dollars and we also have the breadth and depth of pipeline to continue to support the new restaurant openings that are opening at record levels and opening them with operational.

Speaker #2: being proactive and staying in front of the business and making sure we're bringing on the capabilities that we need for the next chapter of our journey and where we're going , not just where we've been and where we are .

Integrity.

Makes sense. Thank you.

Thank you. Our next question comes from Eric Gonzalez with Keybanc you May now begin.

Brett Schulman: Brett, appreciate all the context for the upcoming drivers. Two in particular, just in the current backdrop. The opportunities to accelerate investment in near-term marketing. Are there opportunities with the growing scale of the brand to really just create more brand awareness, even though you've seen some nice gains the last year, as well as improving speed of service? We'd be very curious to know what the clearest action items are going to be for the incoming COO. Yeah, certainly speed of service. We've noted in the past, we know it's an opportunity. We're mindful of striking the right balance where we're not rushing people through the line too fast when it's their first time experiencing Mediterranean food or their first time interacting with CAVA, let alone eating Mediterranean food. We see clear opportunities to continue to improve on that front. There will always be operational opportunities.

Speaker #2: And so that transition was in that spirit . And , you know , as it relates to the operational opportunities , this is the most intense discount environment since the Great Recession .

Hi, Thanks for the question you talked about having a strong pipeline of traffic driving initiatives for the next year, maybe you can expand on that a bit it sounds like you've got at least one protein on deck with Simon in the spring, but I'm curious if you have anything else exciting to call out.

Speaker #2: And , you know , our value proposition , we believe is much more holistic than a than a price point . And one of the best things that we can do is deliver exceptional guest experiences .

Pita chip side beverages, and desserts that might be interesting worth noting.

Speaker #2: That's foundational to driving traffic over the long term . And driving a competitive advantage in concert with our unique , differentiated Mediterranean cuisine .

Yes. Thanks for the question I think the pita chip piece.

Certainly be relevant next year sooner than beverages and desserts. So those are definitely category opportunities for us over the long term, but our <unk> chip platform for innovation has been very successful and we.

Speaker #2: And so we're just doubling down on that . It's been core to who we are throughout our journey , and we want to make sure that we're putting our best foot forward in a time when consumers are becoming increasingly discerning about where they're spending their dollars , and that we also have the breadth and depth of pipeline to continue to support the new restaurant openings that are opening at record levels and opening them with operational integrity .

Continue to see opportunities to excite guests through that platform as well as the salmon launch and then we will be expanding our catering test later in 2006 to a second market. We're currently assessing catering in Houston I wouldn't expect the chain wide launch, but later in 2006, we plan to expand it to a second market in <unk>.

Brett Schulman: We hold ourselves to a high standard, and we want to make sure that we're delivering CAVA hospitality to the level and degree that we aspire to across every restaurant and having that speed of service consistently across the country. We think there's opportunities there. On the marketing front, as we gain scale in these markets, we'll continue to test more upper funnel activity that we have the ability to amortize and leverage across a wider restaurant base. From a new COO perspective, it's continuing to deepen and broaden out the people development pipeline. I noted we talked about the AGM role that's in that spirit of not only helping give a stronger management complement across all shifts during the week, across all seven days, but also having more role-ready leaders in place.

Speaker #2: .

Speaker #6: Makes sense . Thank you .

Speaker #1: Thank you . Our next question comes from Eric Gonzalez with KeyBanc . You may now begin .

With Houston to continue to test and learns and position ourselves for a broader launch and then lastly, I'd say on the marketing front, we have been.

Speaker #5: Hi .

Speaker #2: Thanks for the question . You know , you talked about having a strong pipeline of traffic , driving initiatives for the next year .

Speaker #2: Maybe you can expand on that a bit. It sounds like you've got at least one protein on deck with salmon in the spring.

Very efficient and lean in our marketing spend over time, and we continue to test and learn and understand how we can show up in those channels effectively, especially as we communicate our value proposition and our message in a heavily discounting environment and so our next year whether thats.

Speaker #2: But I'm curious if you have anything else exciting to call out , such as maybe pita chips , side beverages , or desserts that might be interesting and worth noting ?

Speaker #2: Yeah , thanks for the question . I think the . pita chip piece would certainly be relevant next year . Sooner than beverages and desserts .

Through collaborations or some of the other marketing partnerships that we have opportunity to support that's another area that we have not or another lever that we haven't pulled in a meaningful way to date.

Speaker #2: Those are definitely category opportunities for us over the long term , but our pita chip platform for innovation has been very successful and we continue to see opportunities to excite guests through that platform as well as the salmon launch .

Brett Schulman: Again, being proactive, staying in front and thinking about what do we need to put in place, not for today, but for tomorrow, to make sure that as we scale to 1,000 restaurants by 2032, all those things are already in place at that time. We'll be working on other things as we go beyond that milestone goal. The focus will be on the people development side as well as continuing to elevate our speed of service without having people feel too rushed through that line. Thank you. Thank you. Our next question comes from Sharon Zakvia with William Blair. You may now begin. Hi. Thanks for taking the question. Brett, you mentioned younger guests kind of in the prepared comments, and I don't know if that was a broader statement of the industry or if you're seeing something in particular with younger cohorts.

Thank you.

Thank you. Our next question comes from Andrew Charles with TD Cohen, you May now begin.

Speaker #2: And then we will be expanding catering test later in 26 to a second market . We're currently testing catering in Houston . I wouldn't expect the chain wide launch , but later in 26 we plan to expand it to a second market in concert with Houston to continue to test and learn and position ourselves for a broader launch .

Great. Thanks, I appreciate all the context for the upcoming drivers two in particular just in the current backdrop.

The opportunities to accelerate investments in the near term in marketing or other opportunities with the growing scale of the brand to really just create more brand awareness, even though you've seen some nice gains last year.

Speaker #2: And then lastly , I'd say , you know , on the marketing front , we have been very efficient and lean in our marketing spend over time , and we continue to test our and learn and understand how we can show up in those channels effectively , especially as we communicate our value proposition and our message .

As long as improving speed of service and would be very curious to know what the clearest action items, they're going to be for the incoming COO.

Yes, certainly speed of service we have noted in the past we know it's an opportunity we're mindful of striking the right balance or we're not rushing people through the line too fast when it's their first time.

Speaker #2: And a heavily discounting environment . And so next year , whether that's through collaborations or some of the other marketing partnerships that we have opportunities to forge , that's another area that we have not .

Experienced congratulating food or their first time interacting with Carver, let alone eating Mediterranean food, but we see clear opportunities to continue to improve on that front.

Brett Schulman: I'm also interested in kind of what you're learning about how you can lean into loyalty, just given kind of this more volatile consumer climate. Thanks. Yeah, Sharon. It really, for us, we're a bit idiosyncratic in that our comps accelerated in the back half of last year when many industry comps were decelerating. We're lapping tougher hurdles when most are having easier comparisons. We don't want to overstate the challenges of the consumer, but you can look at the data. They're clearly out there, whether it's student loan repayment, consumer sentiment, just the inflationary pressures all around them, whether it's healthcare costs, housing costs, right? Gen Z unemployment, twice the national average.

Speaker #2: Or another lever that we haven't pulled in a meaningful way to date .

Yes, there will always be operational opportunities, we hold ourselves to a high standard.

Speaker #5: Thank you .

We want to make sure that we're delivering carver hospitality to the level and degree that we aspire to across every restaurant and having that speed of service.

Speaker #1: Thank you . Our next question comes from Andrew Charles with TD Cowan . You may now begin .

Speaker #7: Great . Thanks , Brett . Appreciate all the context for the upcoming drivers . Two in particular , just in the current backdrop , you know , the opportunities to accelerate investments in the near term and marketing , you know , are there opportunities with the growing scale of the brand to really just create more brand awareness , even though you've seen some nice gains over the last year as well , as well as improving speed of service and would be very curious to know what the clearest action items are going to be for the incoming COO .

Certainly across the country. So we think theres opportunities there and then on the marketing front as we gain scale in these markets. We will continue to test more upper funnel activity that we have the ability to amortize and leverage it across.

Rider restaurant base, but from a from a new CLO perspective, it's continuing to deepen and broaden out that people development pipeline I noticed we talked about the AGM role that's in.

Brett Schulman: When we look at the data, it's more that the younger cohort, that 25 to 35 that Tricia noted in comments, is that they don't have the steam that they had last year in the way that they were visiting, where their frequency of visiting. It's not necessarily that they're so challenged with us. It's just that they don't have the vigor or the frequency of occasions that they did last year. That's why it's incumbent upon us to continue to double down on our experience and our value proposition and make sure we're communicating that effectively. We're not oblivious to the commentary about the $20 lunch. Well, the reality is you can get a chicken bowl at CAVA with all the toppings included, three dips and spreads, greens and grains for $10.65 to our highest price of $12.95 in New York City.

Speaker #2: Yeah , certainly . Speed of service . We've noted in the past we know it's an opportunity . We're mindful of striking the right balance where we're not rushing people through the line too fast when it's their first time experiencing Mediterranean food , or their first time interacting with cava , let alone eating Mediterranean food .

In that spirit of not only helping give a stronger management complement across all shifts during the week across all seven days, but also having more roll ready leaders in place again being proactive staying in front of and thinking about what do we need to put in place not for just not for today, but for.

Speaker #2: But we see clear opportunities to continue to improve on that front. You know, there will always be operational opportunities. We hold ourselves to a high standard, and we want to make sure that we're delivering CAVA hospitality to the level and degree that we aspire to.

Tomorrow to make sure that as we scale to 1000 restaurants by 2032 that all of those things are already in place at that time, and we will be working on other things as we go beyond that bench that milestone goal. So.

Speaker #2: Across every restaurant . And having that speed of service consistently across the country . So we think there's opportunities there . And then on the marketing front , as we gain scale in these markets , will continue to test more upper funnel activity that we have the ability to amortize and leverage it across a wider restaurant base .

The focus will be on the people development side as well as continuing to elevate our speed of service without having people feel to rush through that line.

Thank you.

Speaker #2: But from a from a new perspective , it's continuing to deepen and broaden out the people development pipeline . I noted , you know , we talked about the AGM role that's in that spirit of not only helping give a stronger management compliment across all shifts during the week , across all seven days , but also having more role ready leaders in place again , being proactive , staying in front and thinking about what do we need to put in place , not for just not for today , but for tomorrow to make sure that as we scale to a thousand restaurants by 2032 , that all those things are already in place at that time , and we'll be working on other things as we go beyond that bench , that milestone goal .

Thank you. Our next question comes from Sharon Zackfia with William Blair You May now begin.

Brett Schulman: That's a sub-$13 bowl in the most expensive market, not a $20 lunch. That's an opportunity for us to continue to communicate that, that it's fresh food. It's not freezer-to-fryer food or ultra-processed food. When you step back and you look at the two-year comp of 20%, and you look at the almost 67% revenue growth on a two-year basis, we continue to gain significant market share. Again, I know the technical data. It's very interesting. The industry has lost 7% in transactions since 2019. We've grown transactions in the mid-20s since 2019. We've taken half the price of industry peers, put away from home 34%. We've taken an aggregate, less than 17% in price. We are focused on the long term. We say it's a marathon, not a sprint.

Hi, Thanks for taking the question Brett you mentioned younger guests kind of in the prepared comments and I don't know if that was a broader statement of the industry or if you're seeing something in particular with young younger cohorts and I'm also interested in kind of what Youre learning about how you can lean into loyalty just given kind of this is more of a volatile consumer climate.

Thanks.

Yes, Sharon.

It really for us were a bit idiosyncratic and that our cost accelerate in the back half of last year, when many industry comps with decelerating so were lapping tougher hurdles of Lupron most are.

An easier compare so.

We don't want to overstate the challenges of the consumer but you can look at the data. They are clearly out there, whether it's student loan repayment and consumer sentiment.

Speaker #2: So the focus will be on people development side as well as , you know , continuing to elevate our speed of service without having people feel to rush through that line .

Just the inflationary pressures all around them, whether it's health care costs housing cost rates Gen Z unemployment twice the national.

Brett Schulman: We want to continue and enhance our value proposition each and every year and make our food more accessible to guests. Now, on the loyalty front, we are very excited at what we've seen in our loyalty program. We noted we've seen an increase of 36% in members in our loyalty program. We added this new tier status, and we've seen the ability to really create greater value for our guests and influence behavior in a positive way for their visits and for the business and expose them to new items. For example, on Chicken Shawarma, in our loyalty pool, people who have tried Chicken Shawarma are coming more frequently than users who have not tried it.

Speaker #7: Thank you .

Speaker #1: Thank you . Our next question comes from Sharon Zackfia with William Blair . You may now begin .

Our average when we look at the data it's more that the younger cohort that 25% to 35% attrition noted in.

Speaker #8: Hi . Thanks for taking the question . Brett , you mentioned younger guests kind of in the prepared comments . And I don't know if that was a broader statement of the industry or if you're seeing something in particular with younger cohorts .

Comments is that.

They don't have the steam that they had last year.

The way that they were visiting where their frequency of visiting its not necessarily there. So challenged with us. It's just that they don't have the bigger or the frequency of.

Speaker #8: And I'm also interested in kind of what you're learning about how you can lean into loyalty . Just given kind of this more volatile consumer climate .

Of the occasions that they did last year.

Speaker #8: Thanks .

Speaker #2: Yeah . Sharon , you know , it really for us , we're a bit idiosyncratic in that our cost accelerate in the back half of last year , when many industry comps were decelerating .

Thats why its incumbent upon us to continue to double down on our experience and our our value proposition and make sure we're communicating that effectively.

Brett Schulman: The ability to have that one-to-one line of communication, drive that innovation, drive that newness, drive excitement, drive trial is a powerful first-party data tool that we look to continue to leverage in the coming quarters. Thank you. Thank you. Our next question comes from Jacob Aiken Phillips with Nilius Research. You may now begin. Hi. Good afternoon. I just wanted to ask again on the honeymoon dynamic. Last quarter, you described really some of what was coming from maybe people driving further distance or just initial trial and new trade areas. Is that dynamic something that lasted longer than three months, six months? Are the initial stores that were affecting you last year doing better on a year-over-year basis? Just trying to understand the dynamic a bit better. Yeah. We are seeing the initial stores impacted are doing better on a year-over-year basis.

Speaker #2: So we're lapping tougher hurdles when most are having easier compares . So I don't want to overstate the challenges of the consumer . But but you can look at the data there clearly out there whether it's student loan repayment , consumer sentiment , just the inflationary pressures , all around them , whether it's health care costs , housing costs , right .

We are not we're not oblivious to the.

So the commentary about the $20 launch while the reality is you can get a chicken <unk> with all of the toppings included three dips and spreads Greens and Greens for $10 65 to our highest price of $12 95 in New York City. So that's a sub $13 below the most expensive market not a $20 lunch and that's an opportunity for us to continue that.

Speaker #2: Gen Z unemployment , twice the national average . When we look at the data , it's more that the younger cohort that's 25 to 35 that Tricia noted in comments is that , you know , they don't have the steam that they had last year in the way that they were visiting , or their frequency of visiting .

Communicate that.

It's fresh food, it's a freezer to prior theater ultra processed food and when you step back and you look at the two year comp of 20% and you look at the almost 67% revenue growth on a two year basis, we continue to gain significant market share and you know again I noted the technomic data.

Speaker #2: It's not necessarily there . So challenged with us , it's just that they don't have the vigor or the frequency of of occasions that they did last year .

Yes, it's very interesting and the industry has lost 7% transactions. Since 2019, we are growing transactions in the mid 20th since 2019, we've taken a half the price.

Speaker #2: And , you know , that's why it's incumbent upon us to continue to double down on our experience and our our value proposition and make sure we're communicating that effectively .

Brett Schulman: In fact, in looking at the restaurants in 2024 that have been open for a period of time beyond 18 periods or 18 months, we're seeing a return to positive same-restaurant sales. We don't believe this is reflective of a structural challenge. We don't find it concentrated in a certain geography or in a certain format or type of restaurant. We're continuing to monitor, and we'll give you updates as we move forward. Likely, given the performance of our 2025 vintage, we'll likely see a similar pattern in 2026. That's encouraging. Thank you. Thank you. Our next question comes from John Ivanko with JP Morgan. You may now begin. Hi. Thank you. Thank you for opening the unit in Brickell. It's absolutely beautiful, Brett and team, so thank you for that. The question, I'm going to make a question out of this.

Speaker #2: You know , we're not we're not oblivious to the to the commentary about the $20 lunch . Well , the reality is , you know , you can get a chicken bottle of cava with all the toppings included .

The industry peers put away from around 34%, we've taken in aggregate less than 17% in price. So we are focused on the long term, we say, it's a marathon not a sprint and we want to continue enhance our value proposition each and every year to make our food more accessible to guests on the loyalty front, we are very excited.

Speaker #2: Three dips and spreads , greens and greens for 1065 to our highest price of 12.95 . In New York City . So that's a sub $13 billion .

Speaker #2: The most expensive market , not a $20 lunch . And that's an opportunity for us to continue to communicate that that it's it's fresh food .

What we've seen in our loyalty programs. We noted we've seen it we've seen an increase of 36% in members in our loyalty program. We added this new tier status and we've seen the ability to really create greater value for our guests and influence behavior in a positive way for their visits and for the business and expose them to new Eid.

Speaker #2: It's not freezer to fry or food or ultra processed food . And you know when you step back and you look at the the two year comp of 20% and you look at the almost 67% revenue growth on a two year basis , we continue to gain significant market share .

So for example on chicken swarm up.

Speaker #2: And , you know , again , I noted the economic data . You know , it's very interesting . The industry has lost 7% in transactions since 2019 .

And their loyalty.

People, who have tried chicken sharma are coming more frequently than users who have not tried it. So the ability to have that one to one line of communication drive that innovation drive that newness drive excitement drive trial is a powerful first party data tool that we look to continue to leverage in the coming quarters.

Brett Schulman: This is a market where we know there's going to be a lot of demand growth, but the buildings haven't been built yet, a lot of them. There's absolutely a lot of supply growth in the market. There are a lot of markets that are kind of like that around the country. New York City certainly is one, and I think there's a number of others as well where the supply growth is pretty obvious, just to see walking down the street or to see on the app or to see on various promotions, what have you. The question, Brett, we spent a lot of time talking on the demand side, but can you talk about kind of the effect of supply growth that you've kind of seen in various markets? Now, I'm not asking you to just like, hey, are they going to last?

Speaker #2: We've grown transactions in the mid 20s since 2019 . We've taken half the price of industry peers food away from home , 34% .

Thank you.

Speaker #2: We've taken , in aggregate less than 17% in price . So we are focused on the long term . We say it's a marathon , not a sprint , and we want to continue and enhance our value proposition each and every year and make our food more accessible to guests .

Thank you. Our next question comes from Jacob Aiken Phillips with Melius Research you may now begin.

Hi, good afternoon.

Speaker #2: Now on the loyalty front , we are very excited at what we've seen in our loyalty program . We noted , we've seen we've seen an increase of 36% in members in our loyalty program .

I just wanted to ask again on the.

Honeymoon dynamic so last quarter you described.

Some of it was coming from or maybe people driving further distance are just initial trial and new trade areas, but is that dynamic.

Speaker #2: We added this new tier status , and we've seen the ability to really create greater value for our guests . And influence behavior in a positive way for their visits and for the business , and expose them to new items .

Brett Schulman: It's just whether they've opened and maybe competed with you on the margin, and it's just something that we just kind of have to wait out as the market will inevitably settle. Yeah, John, thanks for the Brickell comment. It's a beautiful restaurant. It's doing phenomenal. Excited to have more open. We just opened Aventura in South Florida. It's interesting. I feel like it's less supply intense than in our younger, earlier days. If you remember kind of 2013 to 2016, there were a lot of fast casual concepts emerging and fighting for real estate. It was more challenging. I mean, I think real estate's easier for us to get.

Has it lasted longer than three months six months or the initial stores that were affecting you asked me, we're doing better on a year over year basis, just trying to understand that dynamic a bit better.

Speaker #2: So , for example , on chicken shawarma , you know , in their loyalty pool , people who have tried chicken shawarma are coming more frequently than users who have not tried it .

Yes. So we are seeing the initial stores impacted aren't doing better on a year over year basis, and then back and looking at the.

Speaker #2: So the ability to have that 1 to 1 line of communication drive that innovation drive , that newness drive excitement , drive , trial is a powerful first party data tool that we look to continue to leverage in the coming quarters .

The restaurants in 2024 that have been open for a period of time beyond 18 parents 18 months, we're seeing a return to positive same restaurant sales. So we don't believe this is reflective of a structural challenge we don't find that concentrated in a certain geography or in a certain format or type of restaurants, we're continuing to monitor and we'll give you updates.

Speaker #8: Thank you .

Speaker #1: Thank you . Our next question comes from Jacob Aiken Phillips with Melius Research . You may now begin .

Brett Schulman: From a competition standpoint, look, the restaurant industry, as I noted, has transactions down 7% since 2019, which means it's a share shift game, which means you got to be a better competitive alternative to the three or four or however many restaurants around you and be differentiated. To us, that's our Mediterranean cuisine, this on-trend cuisine that is unique in that it meets the moment of a modern consumer's increasingly diverse palate seeking bolder, more adventurous flavors while not wanting to sacrifice on health and wellness. Delivering that, as I noted earlier, or doubling down on operational integrity with exceptional hospitality, not just average operations, exceptional hospitality we have seen over our 15-year journey is a recipe for success. When we do that and we do it consistently, these comps go up. Doesn't matter who opens next door to us.

If we move forward unlikely given the performance of our 2025 vintage well likely see a similar pattern in 2026.

Speaker #9: Hi . Good afternoon . I just wanted to ask again on the honeymoon dynamic . So last quarter , you described that at least some of it was coming from like , maybe people driving further distance or just initial trial and new trade areas .

That's encouraging thank you.

Thank you. Our next question comes from John <unk> with Jpmorgan, you May now begin.

Speaker #9: But is that dynamic like something that lasted longer than three months , six months or the initial stores that were affecting you last period doing better on a year over year basis ?

Hi, Thank you. Thank you for opening the unit and Brickell its absolutely beautiful breath methane. So thank you for that so the question I'm going to make a question out of this.

Speaker #9: Just trying to understand the dynamic a bit better .

So this is a market, where we know theres going to be a lot of demand growth, but the buildings haven't been built yet a lot of them, there's absolutely a lot of supply growth in the market.

Speaker #3: Yeah . So we are seeing the initial stores impacted are doing better on a year over year basis . And in fact , in looking at the restaurants in 2024 , that have been open for a period of time beyond 18 periods or 18 months , we're seeing a return to positive same restaurant sales .

And there's a lot of markets that are kind of like that around the country, New York City, certainly as one I think there's a number of others as well where the supply growth is pretty obvious you know just you know just to see walking down the street or the <unk> or to see on various promotions. What have you. So the question Brett we spent a lot of time talking on the demand side, but you can.

Speaker #3: So we don't believe this is reflective of a structural challenge . We don't find it concentrated in a certain geography or in a certain format or type of restaurant .

Brett Schulman: We continue to grow market share, and that's what we're focused on. Understood. Thank you. Thank you. Our next question comes from Chris Oakle with Stevo. You may now begin. Yeah. Thanks. Good afternoon, guys. Brett, I was wondering if the company has done any work to assess the value perception among non-CAVA users in more mature markets. I'm just wondering what their perception of the brand might be and what's keeping them from visiting the restaurants. Yeah. Our value perception is strong. We do biannual brand health surveys. Many of the analysts on this call have put out value surveys where, I don't want to play favorites or name names, but there is a lot of good research that you all put out that has ranked us very strong in our value proposition, if not toward the top of the publicly traded industry set.

Speaker #3: We're continuing to monitor . We'll give you updates as we move forward . But likely , given the performance of our 2025 vintage , we'll likely see a similar pattern in 2026 .

You talk about kind of the effect of supply growth that you've kind of seen in various markets now I'm not asking you to you know it was like hey are they going to last it's just whether they've opened and it may be competed with you on the margin and it's just something that we're just kind of have to wait out as the market will inevitably subtle.

Speaker #9: That's encouraging . Thank you .

Speaker #1: Thank you. Our next question comes from John Ivankoe with JP Morgan. You may now begin.

Speaker #10: Hi . Thank you . Thank you for opening the unit on Brickell . It's absolutely beautiful . Brett and team . So thank you for that .

Yes, John Thanks for the vertical comment it's beautiful restaurants doing phenomenal excited to have more open we just open to a insurer in south Florida.

Speaker #10: You know , so the question I'm going to make a question out of this . You know , so you know this is a market where we know there's going to be a lot of demand growth .

It's interesting I feel like it's less supply intense than in our younger earlier days. If you remember the kind of 2013 to 2016, there were a lot of SaaS casual concepts emerging and fighting for real estate. So it was more challenging I mean, I think real estate is easier for us to get in and then from a competition.

Speaker #10: But the buildings haven't been built yet . A lot of them . There's absolutely a lot of supply growth in the market . You know , and there's a lot of markets that are kind of like that around the country .

Brett Schulman: We see that corroborated, whether it's anecdotally, whether it's qualitative or quantitative. We see our value proposition continue to be recognized by consumers, whether they come to CAVA or whether they're not as aware of CAVA, whether it's our internal studies or some of these third-party or analyst studies. I think it's also a reflection of the way we think about value, the relevance of our cuisine and Mediterranean diet, the quality of the ingredients we're serving, the fresh food, fresh grilled proteins, fresh produce, not freezer-to-fry or ultra-processed food, the convenience in which you can access it. Most importantly, at the end, I talk about the experience we deliver when you engage with the brand. You match that with the fact that over the long term, our long-term perspective and how we work every year to mitigate price. Less than 17% compared to 34%, industry aggregate average.

Speaker #10: New York City certainly is one . And I think there's a number of others as well , where the supply growth is pretty obvious .

Speaker #10: You know , just , you know , to see walking down the street or to see on the app or to see on various promotions , what have you .

<unk> standpoint look the restaurant industry as I noted has transactions down 7% since 2019, which means it's a share shift game, which means you got to be a better competitive alternative to the three or four or however, many restaurants around you and be differentiate us and to us that's our Mediterranean cuisine. This off.

Speaker #10: So the question , Brett , we spent a lot of time talking on the demand side , but you know , can you talk about kind of the effect of supply growth ?

Speaker #10: You know , that you've kind of seen in various markets now , I'm not asking you to , you know , it's like , hey , are they going to last ?

Speaker #10: It's just whether they've opened and you know , maybe competed with you on the margin . And it's just something that we just kind of have to wait out as the market will inevitably settle .

Andre and cuisine that is unique in that it needs. Some moment of a modern consumers increasingly diverse pallet seeking bolder more adventurous flavors, while not willing to sacrifice on health and wellness and then delivering that as I noted earlier, our doubling down on operational integrity with exceptional hospitality not just average operation.

Speaker #2: Yeah . John . Thanks . Thanks for the comment . It's a beautiful restaurant . It's doing phenomenal . Excited to have more open .

Speaker #2: We just opened Aventura in South Florida . You know , it's interesting . I feel like it's less supply intense than in our younger earlier days .

Exceptional hospitality, we have seen over our 15 year journey is a recipe for success when we do that and we do it consistently these commscope doesn't matter who opens next door to us we continue to grow market share and that's what we're focused on.

Speaker #2: If you remember , in kind of 2013 to 2016 , there were a lot of fast casual concepts emerging and fighting for real estate .

Brett Schulman: We have underpriced inflation. We have underpriced peers that have enhanced that relative value proposition each and every year. Thank you very much. Our next question comes from Sarah Senator with Bank of America. You may now begin. Great. Thank you very much. I wanted to ask about, you mentioned technology and KDS. Now you'll be rolling it out more broadly. What are you seeing in terms of, again, consumer perception? Are you seeing increased frequency or speed of service that's translating into higher frequency? I know experience matters a lot, but sometimes it can be hard to detect throughput when demand slows. Just as I think about technology as a potential driver, any kind of reads on what that means for throughput and guest frequency? Yeah, certainly, Sarah, on the off-premises channels, whether it's delivery, third-party delivery, or native delivery, or digital order pickup, technology plays a key role.

Speaker #2: So it was more challenging . I mean , I think real estate's easier for us to get . And then from a competition standpoint , look , the restaurant industry , as I noted , has transactions down 7% since 2019 , which means it's a share shift game , which means you've got to be a better competitive alternative to the 3 or 4 or however many restaurants around you , and be differentiated .

Understood. Thank you.

Thank you. Our next question comes from Chris <unk> with Stifel. You May now begin.

Yes. Thanks, good afternoon, guys, but I was wondering if the company has done any work to assess the value perception among non carbo users in more mature markets I'm, just wondering what the perception of the brand might be and what's keeping them from visiting the restaurants.

Speaker #2: And to us , that's our Mediterranean cuisine . This on trend cuisine that is unique and that it meets the moment of a modern consumers , increasingly diverse palates , seeking bolder , adventurous flavors while not wanting to sacrifice on health and wellness .

Yeah, our value perception is strong we do biannual brand health surveys many of the analysts on this call are put out value surveys where.

I don't want to play favorites.

Speaker #2: And then delivering that. As I noted earlier, we are doubling down on operational integrity with exceptional hospitality, not just average operations, but exceptional hospitality.

There is a lot of good research that you all put out that has ranked us very strong and our value proposition if not towards the top of the publicly traded industry set so we see that corroborated, whether it's anecdotally, whether it's qualitative or quantitative we see our value proposition continued to be recognized by.

Speaker #2: We have seen over our 15 year journey is a recipe for success . When we do that and we do it consistently , these comps go up .

Speaker #2: Doesn't matter who opens the door to us , we continue to grow market share and that's what we're focused on .

Brett Schulman: The integrations, the time, our times on the third-party marketplace, how quickly we can get our food to consumers, making sure those integrations are aligned and that the team has the labor deployments and set up so we can open our throttles. We manage, we build our own digital order platform, so we can control those throttles, and we can open up those throttles as the team enhances and improves their productivity to deliver greater throughput. The new kitchen display screen system really helps improve order accuracy. We know it's our single biggest opportunity area for customer experience is making sure every digital order is accurate and that it has ample amount of food in the bowl. That is something that the kitchen display screen system has really been a tool to help improve. It helps ease production for our operators and helps deliver greater accuracy for our guests.

Consumers, whether they come to cover or whether they're not as aware of cava.

Speaker #10: Understood . Thank you .

It's our internal studies or some of these third party or analyst studies. So I think it's also a reflection of the way, we think about value the relevance of our cuisine and Mediterranean diet.

Speaker #1: Thank you . Our next question comes from Chris Okell with Stifel . You may now begin .

Speaker #11: Yeah . Thanks . Good afternoon guys . I was wondering if the company has done any work to assess the value perception among Non-java users in more mature markets .

All of the ingredients for serving the fresh food fresh grilled proteins fresh produce lot for each of the prior ultra processed foods and convenience in which you can access it and then most importantly at the end of the I talked about the experience we deliver when you engage with the brand and then you can match that with the fact that over the long term our long term perspective, and how we work every.

Speaker #11: I'm just wondering what the perception of the brand might be . And what's keeping them from visiting the restaurants .

Speaker #2: Yeah , our value perception is strong . We do biannual brain health surveys . Many of the analysts on this call have put out a value surveys where , you know , I don't want to play favorites for name names , but there is a lot of good research that you all put out .

Year to mitigate price.

Seven less than 17% compared to 34% industry aggregate average.

Speaker #2: That has ranked us very strong in our value proposition, if not toward the top of the publicly traded industry set. So we see that corroborated.

Under price inflation, we are underpriced peers that has enhanced that relative value proposition each and every year.

Speaker #2: Whether it's anecdotally , whether it's qualitative or quantitative . We see our value proposition continue to be recognized by consumers , whether they come to kava or whether they're not as aware of kava , whether it's our internal studies or some of these third party or analyst studies .

Okay.

Brett Schulman: We see that voice of the guest score improve, and we see comps follow that. That has been true since our very earliest days, whether it's the digital order line or the in-restaurant line. When the customer experience scores improve, the comps follow. We want to continue to make sure we're putting our best foot forward in that light. Using technology to enhance the human experience, not replace it, to take some of that complexity out of our team members' mind share or equip them with the tools and capabilities to deliver that exceptional guest experience.

Thank you very much. Our next question comes from Sara Senatore with Bank of America, you May now begin.

Great. Thank you very much I wanted to ask about you know you mentioned technology in <unk>.

Speaker #2: So , you know , I think it's also a reflection of the way we think about value . The relevance of our cuisine and Mediterranean diet , the quality of the ingredients we're serving , the fresh food , fresh grilled proteins , fresh produce , not freezer to fry or ultra processed foods .

And how you'll be rolling out more broadly are you. What are you seeing in terms of again perception consumer perception are you seeing increased frequency or speed of service that's translating into higher frequency I know I'm, you know experience matters, a lot, but sometimes it can be hard to detect throughput when when demand slows.

Speaker #2: The convenience in which you can access it and most importantly , at the end , I talked about the experience we deliver . When you engage with the brand and then you match that with the fact that over the long term , our long term perspective and how we work every year to mitigate price seven less than 17% compared to 34% in industry aggregate average , we have under-priced inflation .

Brett Schulman: Even another thing, just having that order status update notification and making sure the algorithm is updating our guests if we're running a little late or if we're running a few minutes early so that they're walking in ideally when their bowl is being put on the shelf or at the window in one of our pickup by car locations. Thank you. Very helpful. Thank you. Our next question comes from Danilo Garbulo with Bernstein. You may now begin. Thank you. Brett, when you talk about hospitality, you seem to suggest a broader opportunity than speed of service alone. Where do you think operations are falling short of your expectations relative to where you are going, not necessarily where you have been and where you are today? What are some of the specific levers that you're expecting the new CEO to deploy?

Just as I think about you know technology is a potential driver.

You know any kind of reads on on on what that means for throughput and and and guest frequency yes.

Certainly Sara on the off premise channels, whether it's delivery third party delivery, our native deliveries or digital order pick up technical.

Speaker #2: We have underpriced peers that have enhanced that relative value proposition each and every year .

Technology plays a key role the integrations the time.

Our times on the third party marketplace, how quickly we can get our crews to consumers, making sure those integrations are.

Speaker #1: Thank you very much . Our next question comes from Sarah , Senator , with Bank of America . You may now begin .

Are aligned and that the team has the labor deployments and set up so we can open our throttles, we manage we build our own digital order platform. So we can control those throttles that we can open up those throttled.

Speaker #12: Great . Thank you very much . I wanted to ask about you mentioned technology and , you know , and you'll be rolling it out more broadly .

Speaker #12: What are you seeing in terms of , again , perception , consumer perception ? Are you seeing increased frequency or speed of service ?

As the team enhances and improves their productivity to deliver greater throughput and then the new kitchen display screen system really help improve order accuracy. We know it's our single biggest opportunity area for customer experience is making sure every digital order is accurate and that it has ample amount of.

Brett Schulman: If I may, Tricia, you're expecting some of this investment in people to maybe translate into similar restaurant-level margins compared to today? Or with sales leverage, do we still expect a growing restaurant-level margin under the new operations? Thank you. Yeah, thanks, Danilo. We have strong restaurant operations today. We have always been in a forward-looking posture, and we have aspirations to be thought of in an elite group of restaurant operators delivering exceptional service. Not just average service, not just good service, exceptional service. Because it is like all my co-founders, sons of Greek immigrants, when you go to that part of the world, the hospitality you feel, the welcoming nature you feel, we want you to feel that every time you walk into every restaurant, no matter how big we get.

Speaker #12: That's translating into higher frequency ? I know , you know , experience matters a lot , but sometimes it can be hard to detect throughput when when demand slows .

Speaker #12: So just as I think about technology as a potential driver , you know , any kind of reads on , on on what that means for throughput and , and and guest frequency .

Food in the bowl and that is something that the kitchen display screen system has really been a tool to help improve that.

Speaker #2: Yeah , certainly . Sarah , on the off premises channels , whether it's delivery , third party delivery or native delivery or digital order pickup technology plays a key role .

Ill ease of production for our operators and help deliver greater accuracy for our guests and we see that voice of the guest scores improve and we see comps follow that like that that has been <unk>.

Speaker #2: The integrations , the time , you know , our times on the third party marketplace , how quickly we can get our food to consumers , making sure those integrations are are aligned and that the team has the labour deployments and set up so that we can open our throttles .

True in since our very earliest days, whether it's the digital airliner in restaurant line when the customer experience scores improve the comps follow and so we want to continue to make sure were putting our best foot forward in that light and then using technology to enhance the human experience that replace it to take some of that complexity out of our team members mind share or equip them with the tools.

Brett Schulman: That is our aspiration, and that is the work we are committed to every day to elevate to that level. We have it in restaurants. We have opportunities in other restaurants. I think in moments where there's cyclical pressures on the consumer, it matters more than ever to make sure that it's consistent across all restaurants and take good to great. That is something that we think is just another opportunity to drive additional traffic and drive additional market share growth from the significant gains we've had in recent years. What that means from a restaurant-level margin standpoint and how we're thinking about it, certainly as same-restaurant sales increase, restaurant-level margins will expand.

Speaker #2: You know , we we manage , we build our own digital order platform so we can control those throttles and we can open up those throttles as the team enhances and improves .

<unk> capabilities to deliver that exceptional guest experience even.

Speaker #2: Their productivity to deliver greater throughput . And then the new kitchen display screen system really help improve order accuracy . We know it's our our single biggest opportunity area for customer experience is making sure every digital order is accurate and that it has ample amount of food in the bowl .

Other thing just having that order status update notifications and making sure. The algorithm is updating our guests if we're running a little late order for running a few minutes early so that they're walking in and ideally when theyre bullets being put on the shelf at the window and one of our pick up by car locations.

Speaker #2: And that is something that the kitchen display screen system is really been a tool to help improve that and help ease of production for our operators and help deliver greater accuracy for our guests .

Thank you very helpful.

Yeah.

Thank you. Our next question comes from Danilo <unk> with Bernstein, you May now begin.

Brett Schulman: We're also very mindful of where we are in our journey and the investments that we think are necessary to pack in the business to make sure we're continuing to build a long-term durable brand that's going to consistently deliver on that guest experience and hospitality that Brett talked about. Yeah. If we see opportunities to invest further in labor, we will. It's just the belief, it's a philosophical belief we have that has gotten us to where we are today, that we are going to continue to look at opportunities to make sure that any restaurant-level margin expansion is sustainable and durable over the long term. In the short term, that might mean targeted investments if that's what we think is the right thing to do for the business. Great. Thank you. Thank you. Our next question comes from Dennis Geiger with UBS. You may now begin. Great.

Speaker #2: And we see that voice of the guest score improve , and we see comps follow that . That has been , you know , true in , you know , since our very earliest days , whether it's the digital order line or the in restaurant line , when the customer experience scores improve , the comps follow .

Yes.

But when you talk about I'll speak obviously, you seem to suggest a broader opportunity then.

Speed of service alone. So what do you think corporations are falling short of your expectations relative to where you are going not necessarily what you had been and where you're at today and what are some of the specific veeva, so you're expecting the new CEO to deploy.

Speaker #2: And so we want to continue to make sure we're putting our best foot forward in that light . And then using technology to enhance the human experience , not replace it to take some of that complexity out of our team members mindshare or equip them with the tools and capabilities to deliver that exceptional guest experience , even another thing , just having that order status update notification and making sure the algorithm is updating our guests .

And if I may like.

You're expecting some of these investment in people to maybe translating into similar restaurant level margins compared to today or with sales leverage can we still expect a growing restaurant level margin under the new operations. Thank you.

Yes, Thanks Bill.

Speaker #2: If we're running a little late , or if we're running a few minutes early so that they're walking in , ideally when their bowl is being put on the shelf or at the window in one of our pickup by car locations .

Have strong restaurant operations today.

We have always been in a forward looking posture, we have aspirations to be thought of in an elite group of restaurant operators delivering exceptional service.

Brett Schulman: Thank you, guys. Just another one on the newer stores and the performance in year two, if I could. Tricia, specifically, you gave some good color a couple of minutes ago, I think, and I want to make sure I heard it right. Just as far as, you're still seeing those new stores enter the base, I assume, as a negative, just like last quarter. That 2024 class, those stores open 18 months, they're flipping to positive. I assume not as strong as what you've seen in prior classes, but positive after 18 months. Just wanted to confirm that. The question really is, as you look ahead, any better sense on what 2026 may look like with this new store dynamic?

Speaker #12: Thank you . Very helpful .

Just average service not just good service exceptional service because it is like all my co founder his sons of Greek immigrants. When you go to that part of the world. The hospitality you feel the welcoming nature you feel we want you to feel that every time you walk into every restaurant no matter, how big we get and so that is our aspiration and that is the work we.

Speaker #1: Thank you . Our next question comes from Danilo Gargiulo with Bernstein . You may now begin .

Speaker #13: You , Brett , when you talk about hospitality , you seem to suggest a broader opportunity than , you know , speed of service alone .

Speaker #13: So where do you think you are falling short of your expectations relative to where you are going? Not necessarily where you have been and where you are today?

We are committed to everyday to elevate to that level and we have it in restaurants, we have opportunities in other restaurants, and I think in moments, where there are cyclical pressures on the consumer it matters more than ever to make sure that it's consistent across all restaurants and take good to great.

Speaker #13: And what are some of the specific levers that you're expecting ? The new CEO to to deploy ? And if I may , Trisha , you're expecting some of these investment in people to maybe translating into similar restaurant level margins compared to today or with sales leverage .

Brett Schulman: As you've now seen a couple of quarters of the honeymoon dynamic and other levers maybe you can pull to sort of maintain that growth even after big year one opens? Thank you. Yeah, I appreciate it, Dennis. You have it right. We're seeing the trends as you articulated them. Certainly, there are restaurants that perform above those expectations. In general, yes, that is correct. In 2026, we believe the 2025 cohort of restaurants will perform similarly to what we saw with the 2024 cohort in 2025.

And that is something that we think is just another opportunity to drive additional traffic and drive additional market share growth from the significant gains we got in recent years, what that means from a restaurant level margin standpoint, and how we're thinking about it certainly our same restaurant sales increase restaurant level margins will expand but we're also very mindful of where we are in.

Speaker #13: We still expect growing restaurant-level margin under the new operations. Thank you.

Speaker #2: Yeah , thanks for we have strong restaurant operations today . We have always been in a forward looking posture and we have aspirations to be thought of in an elite group of restaurant operators delivering exceptional service , not just average service , not just good service , exceptional service because it is like all my co-founders , sons of Greek immigrants , when you go to that part of the world , the hospitality you feel , the welcoming nature you feel .

Our journey and the investments that we think are necessary in the business to make sure. We're continuing to build a long term durable brand thats going to consistently deliver on that guest experience in hospitality that Brett talked about yes, we see opportunities to invest further in labor we will.

Speaker #2: We want you to feel that every time you walk into every restaurant , no matter how big we get . And so that is our aspiration and that is the work we are committed to every day , to elevate to that level .

Brett Schulman: Things to do to try to make sure that we can open these restaurants as successfully as possible and capture as much of the honeymoon halo as we can is really taking our general managers and exposing them to high volumes as well, and bringing them into other markets like New York to experience what these peaks are like, which is atypical and something that we hadn't experienced prior to this year, so that they're better able to manage the demand and then hopefully maintain more of those consumers as we go forward. Very helpful. Thank you. Thank you. Our next question comes from Jeffrey Bernstein with Barclays. You may now begin. Great. Thank you very much.

It's just a belief it's a philosophical belief we have that has gotten us to where we are today that we're going to continue to look at opportunities to make sure that any restaurant level margin expansion is sustainable and durable over the long term and in the short term that might mean targeted investments if thats. What we think is the right thing to do for the business.

Speaker #2: And we have it in restaurants . We have opportunities in other restaurants . And I think in moments where , you know , there's cyclical pressures on the consumer , it matters more than ever to make sure that it's consistent across all restaurants and take good to great .

Great. Thank you.

Speaker #2: And that is something that we think is just another opportunity to drive additional traffic and drive additional market share growth from the significant gains we've had in recent years.

Thank you. Our next question comes from Dennis Geiger with UBS you May now begin.

Great. Thank you guys just another one on the newer stores and the performance in year, two if I could touch on specifically I gave some good color a couple of minutes ago, I think and I want to make sure I heard it right just as far as Youre still seeing those new stores enter the base I assume as a negative just like last quarter, but.

Speaker #3: What that means from a restaurant level margin standpoint , and how we're thinking about it , certainly as same restaurant sales increase , restaurant level margins will expand , but we're also very mindful of where we are in our journey and the investments that we think are necessary to put back in the business to make sure we're continuing to build a long term , durable brand that's going to consistently deliver on that guest experience and hospitality that Brett talked about .

Brett Schulman: Just looking at the most recent third quarter results, I'm just curious how much of the comp shortfall, maybe versus your internal expectation heading into Q3, do you attribute to the escalating macro headwinds versus perhaps some internal missteps or challenges? Kind of thinking about it as you look back, anything you would do differently if the challenging environment persists as we look into 2026? Thank you. Yeah. The macro environment is certainly what put pressure on the results in Q3. There isn't anything structural about the business or any missteps that are significant that we would have adjusted or wish we had done differently. It's really about how we look at how we performed in light of the two-year stack that we were facing.

That 24 class those stores opened 18 months they are flipping to positive I assume not as strong as what you've seen in prior classes, but positive. After after 18 months. So just wanted to confirm that and then the question really is as you look ahead any better sense on what 26 may look like with this new store dynamic because you've now.

Speaker #2: Yeah , we see opportunities to invest further in labor . We will . It's just it's just a belief . It's a philosophical belief .

Speaker #2: We have that has gotten us to where we are today , that we are going to continue to look at opportunities to make sure that any restaurant level margin expansion is sustainable and durable over the long term and in the short term , that might mean targeted investments .

<unk> seen a couple of quarters of the honeymoon.

Dynamic and other levers maybe you can pull to sort of maintain that growth even after big year. One opens thank you.

Speaker #2: If that's what we think is the right thing to do for the business.

Speaker #13: Great . Thank you .

Yeah I appreciate it does say is there you have it right, where we're seeing the trends that you articulated them and certainly there are restaurants that perform above those expectations. So we were not but in general yes that is correct.

Speaker #1: Thank you. Our next question comes from Dennis Geiger with UBS. You may now begin.

Speaker #2: Great . Thank you guys . Just another one on the newer stores . And the performance in year two . If I could Trisha specifically , you gave some good color a couple of minutes ago , I think .

Brett Schulman: When you're coming up on a comp in the quarter last year of 18%, coming out just under 2% is not an unreasonable expectation given that tough compare and the macro environment that we're in. We talked about two-year stacks and how they accelerated. The three-year stack at the beginning of the year, we thought would be in the mid-30s. We're just under that at 34%. In this type of environment, that was not unexpected. Yeah. Again, Jeffrey, when we're in this heavy discounting environment, we're not going to get into that heavy discounting to combat any cyclical headwinds. That's why we talked about doubling down on exceptional operations and great guest experiences. That's where restaurant traffic starts, and that's always an opportunity for us and always will be, but it's incumbent upon us in these more challenging macro environments to double down on it.

And then in 'twenty six we believe the 25 cohort of restaurants will perform similarly to what we found with the 'twenty 'twenty four cohort in 2025, and you know things could you just trying to make sure that we can.

Speaker #2: And I want to make sure I heard it right—just as far as you're still seeing those new stores enter the base, I assume as a negative, just like last quarter.

Speaker #2: But that 24 class , those stores open 18 months , they're flipping to positive . I assume not as strong as as what you've seen in prior classes , but but positive after after 18 months .

Open these restaurants as successfully as possible and capture as much of the honeymoon.

Halo as we can is really taking our general managers and exposing them to high volumes as well and bringing them into other markets like New York to experience with these peaks are light, which is atypical and something that we haven't experienced this year, so that they're better able to manage the demand.

Speaker #2: So just wanted to confirm that . And the question really is if , as you look ahead , any better sense on what 26th May look like with this new store dynamic , as you've now seen , a couple quarters of the honeymoon .

Speaker #2: Dynamic and other levers , maybe you can pull to sort of maintain that growth even after big Year one opens . Thank you .

Yeah Blake.

Blake maintain more of those consumers as it got boring.

Speaker #3: I it , Dennis . So you have it right . We're seeing the trends as you articulated them , and certainly there are restaurants that perform above those expectations .

Very helpful. Thank you.

Thank you. Our next question comes from Jeffrey Bernstein with Barclays. You May now begin.

Speaker #3: So we're not . But in general , yes , that is correct . And then in 26 , we believe the 25 cohort of restaurants will perform similarly to what we saw with the 2024 cohort in 2025 .

Speaker #3: So we're not . But in general , yes , that is correct . And then in 26 , we believe the 25 cohort of restaurants will perform appreciate things to do to try to make sure that we can open these restaurants as successfully as possible and capture as much of the honeymoon halo as we can , is really taking our general managers and exposing them to high volumes as well , and bringing them into other markets like New York , to experience what these peaks are like , which is atypical and something that we hadn't experienced prior to this year , so that they're better able to manage the demand .

Brett Schulman: Because we're not fast food, we're not QSR. That's not our value proposition to our guests. Our value proposition, as I spoke to before, is the quality of our food, the relevance of the cuisine, the experience you get when you engage with us, and you come into our dining rooms, and you order on our digital channels, and the accuracy we deliver. We want to make sure we're doing everything we can in that spirit to deliver for our guests in this time where they're feeling pressures all around them. Thank you. Thank you. Our next question comes from John Tower with Citi Group. You may now begin. Great. Thanks. Two, if I may. First, Brett, you've mentioned multiple times in the call the brand's pricing versus CPI over time since 2019.

Great. Thank you very much.

Just looking at the most recent third quarter results I'm, just curious how much of the comp shortfall maybe versus your internal expectation heading into three Q do you attribute to the escalating macro headwinds versus perhaps some internal missed it missteps or challenges.

Thinking about as you look back anything you would do differently, if the challenging environment persists as we look into 2026. Thank you.

Yeah. The macro environment is certainly what put pressure on the results in Q3, I wouldn't there isn't anything structural about the business or any missteps that are significant that we would have adjusted for wish we had done differently, it's really about how do we.

Speaker #3: And then , you know , hopefully maintain more of those consumers as we go forward .

Look at how we performed in light of the two year stack that we were facing that wasn't here coming up on a calm in the corner last year of 18%.

Speaker #2: Very helpful . Thank you .

Brett Schulman: I guess my impression is that as we're looking at 2026, you guys are probably not going to do much by way of taking price for next year. I'm just curious if that's the right assumption to make for the brand. My next question is just on the last year discussion and specifically the builds for 2026. To avoid maybe the same issue hitting the store base with respect to honeymooning, are you guys doing anything specifically where you're opening the stores in 2026 such that 2027, you're not going to be running into the same issues with honeymoons, or is that not even part of the discussion? Yeah. I'll start with price. You're right, John. As we think about it, we've always been very thoughtful.

Speaker #1: Thank you . Our next question comes from Jeffrey Bernstein with Barclays . You may now begin .

You know coming out just under two is not an unreasonable expectation, giving that tough compare and the macro environment that we're in we talked about two year stacks and how they accelerated in the three year stack at the beginning of the year, we thought would be in the mid thirties.

Speaker #14: Great . Thank you very much . Just looking at the most recent third quarter results , I'm just curious how much of the comp shortfall maybe versus your internal expectation heading into three ?

Speaker #14: Q do you attribute to the escalating macro headwinds versus perhaps some internal missteps or challenges ? And kind of thinking about it as you look back , anything you would do differently if the challenging environment persists as we look into 2026 ?

And we're just under that at 34% and in this type of environment that was not unexpected and again Jeff.

When we're in this heavy discounting environment.

We're not we're not going to get into that.

Speaker #14: Thank you .

Heavy discounting.

Speaker #3: Yeah, the macro environment certainly put pressure on the results in Q3. I wouldn't say there is anything structural about the business or any missteps that are significant that we would have adjusted or wish we had done differently.

To come back any cyclical headwinds, that's why we talked about doubling down on.

Exceptional operations and great guest experiences that that's where our restaurant traffic starts and that's always an opportunity for us and always will be but it's incumbent upon us in these.

Brett Schulman: Brett talked about this earlier on, not passing a significant amount of price on to our guests, and we don't plan to do that in 2026. Our expectation is our price increase will be very modest and less than what we did in 2025. As you're thinking about opening new restaurants in 2026, is that a significant change contemplated in how we're opening them? Just being thoughtful around what that means to the business and keep in mind our comp trends in Q1 2025 with a strong comp at 10.8%. That'll factor in the cadence of comps next year. When we look at our real estate strategy, just wanting to make sure that we're being balanced and thoughtful in how we're bringing new restaurants in, particularly in new markets, and how we're pacing those openings to perhaps try to balance out that honeymoon phenomenon that we've been experiencing.

Speaker #3: It's really about how do we look at how we performed in light of the two year stack that we were facing . So when you're coming up on a comp in the quarter last year of 18% , you know , coming out just under two is not an unreasonable expectation .

More challenging macro environments to double down on it.

We're not we're not fast food, we're not <unk> that.

That's not our value proposition to our guests our value proposition as I spoke to before the quality of our food the relevance of the cuisine. They experienced you get when you engage with us and you come into our dining rooms in U.

Speaker #3: Given that tough compare and the macro environment that we're in . We talked about , you know , two year stacks and how they accelerated .

Speaker #3: And the three year stack at the beginning of the year , we thought would be in the mid 30s and and we're just under that 34% .

Order on our digital channels and the accuracy, we deliver so we wanted to make sure we're doing everything we can in that spirit.

Speaker #3: And in this type of environment , that was not unexpected .

To deliver for our guests and this time or they are feeling pressures all around.

Speaker #2: And again , Jeffrey , it's when we're in this heavy discounting environment , you know , we're not we're not going to get into that heavy discounting to combat any cyclical headwinds .

Thank you.

Yeah.

Thank you. Our next question comes from Jon Tower with Citigroup, you May now begin.

Great. Thanks.

Two if I may.

Speaker #2: That's why we we talked about doubling down on exceptional operations and great guest experiences . That's that's where restaurant traffic starts . And that's always an opportunity for us and always will be .

First.

You've mentioned multiple times in the call.

<unk> pricing versus CPI.

Brett Schulman: I'll tell you, we're seeing it all over. It's not just in new markets. The brand is resonating very well and driving strong demand that's bringing many more guests than we originally expected, which drives a stronger cash-on-cash return sooner, which is great for the business overall. Got it. Thank you for taking the question. Thank you. Our next question comes from Brian Harbor with Morgan Stanley. You may now begin. Thanks. Good afternoon. The change to store margin guidance, is that really just reflective of the sales environment, or is there anything that's different about inflation, anything that we should factor in as we go to 2026? I guess just also, what's pressuring pre-opening expense? Yeah. When we're looking at restaurant-level margin, it really reflects the experience we had in Q3.

Over time since since 2019, so I guess my impression is that as we were looking at 2026, you guys are probably not going to do much by way of taking price.

Speaker #2: But it's incumbent upon us in these more , more challenging macro environments to double down on it because , you know , we're not we're not fast food .

For next year and I'm just curious if that's the right assumption to make for the brand and then my next question is just on the last year discussion and specifically the builds for 2026.

Speaker #2: We're not QSR . That's not our value proposition to our guests . Our value proposition , as I spoke to you before , the quality of our food , the relevance of the cuisine , the experience you get when you engage with us and you come into our dining rooms and you order on our digital channels and the accuracy we deliver .

To avoid maybe the same issue hitting.

The store base with respect of Honeymooning.

Speaker #2: So we want to make sure we're doing everything we can . In that spirit , to deliver for our guests . In this time , or they're feeling pressures all around them .

Are you guys doing anything specifically, where you're opening the stores in 2026, such that 2027, youre not going to be running into us.

Speaker #14: Thank you .

Same issues with honeymoons or is that.

Speaker #1: Thank you . Our next question comes from John Tower with Citigroup . You may now begin .

Not even part of the discussion.

Yes, so I'll start with price.

Speaker #15: Great . Thanks to , if I may , first , Brett , you've mentioned multiple times in the call , you know , the brand's pricing versus CPI over time since since 2019 .

So youre right John as we think about it we've always been very thoughtful Brett talked about this earlier on.

Brett Schulman: Frankly, in the quarter itself, we had continued to have higher repair and maintenance expense than what we were anticipating. We have been talking to everyone and seeing that over the past year and had thought that it would come down a little bit. What the guidance reflects is the actual results in Q3 and a continuation of that from another operating expense perspective into Q4 as we identify opportunities to look at those repair and maintenance expenses and optimize them. Being more thoughtful around equipment and how do we make adjustments, but wanting to maintain the integrity in the physical spaces and making sure we're providing a great guest experience at the same time. There isn't anything significant around input costs or labor costs. It's more on that other operating expense line.

Not having a significant amount of price on to our guests and we don't plan to do that in 2026. So our expectation is our price increase will be very modest in less than what we did in 2025.

Speaker #15: So, I guess my impression is that as we're looking at 2026, you guys are probably not going to do much by way of taking price for next year.

And then as you're thinking about opening new restaurants in 2026.

Speaker #15: And I'm just curious if that's the right assumption to make for the brand . And then my next question is just on the last year discussion , and specifically the builds for 2026 , you know , to avoid maybe the same issue hitting the store base with respect to honeymooning .

No significant change contemplated and our opening them just being thoughtful around what that means to the business and keep in mind, our comp trends in Q1 of 2025 with a strong comp at 10, 8% and that'll factor in the cadence of comps next year, but when we look at our real estate strategy and just wanting to me.

Speaker #15: Are you guys doing anything specifically where you're opening the stores in 2026 such that , you know , 2027 , you're not going to be running into the same issues with honeymoons ?

Sure that we're being balanced and thoughtful in how we're bringing new restaurants, and particularly in new markets and how we're pacing those openings.

Speaker #15: Or is that not even part of the discussion ?

Perhaps try to balance out that honeymoon.

Brett Schulman: When you talked about pre-opening costs, what we're finding with pre-opening is that in the quarter itself, there were many more restaurants under construction than what was in the prior year. Overall, we are seeing an increase in pre-opening costs per restaurant driven by a number of factors. It's largely due to us investing in a better opening experience. So when I mentioned earlier. Taking general managers out of the market where the restaurant's going to open and bringing them into higher volume markets has extra costs associated with it, which we think is important to make investment in so that general managers are better prepared and there's a better guest experience overall. Thank you. Our next question comes from Logan Reich with RBC Capital Markets. You may now go ahead. Hey, good evening. Thanks for taking my question.

Speaker #3: Yeah . So I'll start with price . So you're right , John , as we think about it , we've always been very thoughtful .

Phenomenon that we've been experiencing but I'll tell you we're seeing it all over so it's not just in new markets or just the brand is resonating very well in driving strong demand, bringing them. Many more guests than we originally expected, which drive a stronger cash on cash returns sooner, which is great for the business overall.

Speaker #3: Brett talked about this earlier on not passing the significant amount of price on to our guests . And we don't plan to do that in 2026 .

Speaker #3: So our expectation is our price increase will be very modest and less than what we did in 2025 . And then as you're thinking about opening new restaurants in 2026 , is that a significant change contemplated in how we're opening them ?

Got it thank you for taking my questions.

Thank you. Our next question comes from Brian <unk> with Morgan Stanley You May now begin.

Speaker #3: Just being thoughtful around what that means to the business ? And keep in mind , our comp trends in Q1 of 2025 , with a strong comp at 10.8% , that'll factor in the cadence of comps next year .

Thanks, Good afternoon.

The change to store margin guidance is that really just reflective of the sales environment or is there anything that's different about inflation anything that we should factor in as well.

Speaker #3: But when we look at our real estate strategy, we want to ensure that we're being balanced and thoughtful in how we're bringing new restaurants in, particularly in new markets, and how we're pacing those openings. We want to try to balance out that honeymoon phenomenon that we've been experiencing.

Go to 'twenty six and then I guess, just also what's pressuring preopening expense.

Yeah. So when you look at your restaurant level margin. It really reflects the experience we had in Q3 and and frankly.

Brett Schulman: Just on the Q4 comp, I recognize you guys give the full-year guide. It implies a relatively wide range on Q4. Just any sort of directional commentary you could provide on Q4, same sort of sales outlook. Yeah. Certainly, given the higher lap going up against the 21.2% same-restaurant sales in the prior year, coupled with the consumer headwinds, we wanted to take a very judicious approach in setting guidance. It's been a bit choppy. What we're seeing today is a bit better than the midpoint of the range, but we wanted to be thoughtful and create a wide range because of the uncertainty that's being faced with consumers today. How long will the shutdown continue and what will that mean is certainly a factor and one that's difficult to predict. Thank you. Our next question comes from Nick Sethian with Mizuho. You may now begin. Thank you.

In the in the quarter itself, we had continue to have higher repair and maintenance expense than what we were anticipating and we have been talking to everyone in seeing that over the past year and had thought that it would come down a little bit and see what the guidance reflects the actual results in Q3, and a continuation of that from <unk>.

Speaker #3: But I'll tell you , we're seeing it all over , so it's not just in new markets . We're just the brand is resonating very well and driving strong demand .

Speaker #3: That's bringing many more guests than than we originally expected , which drives a stronger cash on cash return sooner , which is great for the business overall .

Speaker #15: Got it. Thank you for taking the questions.

Other operating expense perspective into Q4, as we identify opportunities too.

Speaker #1: Thank you . Our next question comes from Brian Harper with Morgan Stanley . You may now begin .

Look at those repair and maintenance expenses and optimize them, so being more thoughtful around equipment and how do we make adjustments, but wanting to maintain the integrity of the physical spaces and making sure we're providing a great guest experience at the same time, there isn't anything significant around input costs or labor costs, it's more.

Speaker #16: Thanks . Good afternoon . The change to store margin guidance is that really just reflective of the sales environment , or is there anything that's different about inflation ?

Speaker #16: Anything that we should factor in as we go to 26 . And then I guess just also what's pressuring pre-opening expense .

And that other operating expense line.

Speaker #3: Yeah . So when we're looking at restaurant level margin , it really reflects the experience we had in Q3 . And frankly , in the in the itself , we had continue to have higher repair and maintenance expense than what we quarter were anticipating .

And then when you talked about pre opening costs, what we're finding with Preopening and they were in the corner itself. There were many more restaurants under construction and then what was it in the prior year, but overall, we are seeing an increase in preopening costs per restaurant, driven by a number of factors and it's largely due to us investing in and better <unk>.

Brett Schulman: Historically, you've talked about the diversity of COGS basket as being a little bit of a moat that allows you to underprice inflation. With beef now in the equation, would you mind just updating us in terms of the composition of the COGS basket? Then two, just on the AGM investment. Should we think about that as an incremental cost in labor in 2026? Any comment there would be helpful. Yeah. On the diversity of the COGS basket, there isn't a material change in that mix overall. Twenty-five percent typically in proteins, 25% produce, 25% grocery, and 25% everything else. Adding beef has not changed it materially in the overall cost from an input cost standpoint. When we're looking at AGM, I appreciate you bringing that up. We've reimagined the general manager in training role and elevated it for those who are ready to an assistant general manager role.

Speaker #3: And we have been talking to everyone and seeing that over the past year and had thought that it would come down a little bit .

<unk> experience, so when I mentioned earlier.

Speaker #3: And so what the guidance reflects is the actual results in Q3 and a continuation of that from another operating expense perspective into Q4 .

You know, taking general managers out of the market, where the restaurants kind of up and bringing them into higher volume markets that has extra cost associated with it which we think is important to make investment in.

Speaker #3: As we identify opportunities to . Look at those repair and maintenance expenses and optimize them . So being more thoughtful around equipment and how do we make adjustments .

And gentlemen managers are better prepared and Theres, a better guest experience overall.

Okay.

Thank you. Our next question comes from Logan <unk> with RBC capital markets. You May now go ahead.

Speaker #3: But wanting to maintain the integrity and the physical spaces and making sure we're providing a great guest experience at the same time ? There isn't anything significant around input costs or labor costs .

Hey, good evening, thanks for taking my questions.

Just on the Q4 call, but recognize it goes to the full year guide implies relatively wide range on Q4, so just any sort of directional commentary you could provide.

Speaker #3: It's it's more on that other operating expense line . And then when you talked about pre-opening costs , what we're finding with pre-opening is that we're in the quarter itself .

Speaker #3: There were many more restaurants under construction than what was in the prior year . But overall , we are seeing an increase in pre-opening costs per restaurant , driven by a number of factors , and it's largely due to us investing in a better opening experience .

On Q4 same store sales outlook.

Brett Schulman: It's not an incremental headcount per se, but it is at a higher overall compensation rate. There will be some modest impact to overall labor as we go into 2026. Thank you. Our next question comes from Brian Beccaro with Raymond James. You may now begin. Thanks. Most of mine have been asked, but I thought I'd follow up on recent trends. Just given your footprint in the DMV market, I'm curious if you're seeing any outsized softness in that region during the government shutdown or more broadly to what degree you think that could be having an impact on your business. Thank you. Yeah, Brian, we did not initially see any impact. In the most recent weeks, as paychecks stopped going out to government workers, we have seen some softness creep in, but I wouldn't say it's acute or anything severe at this point. Great, thank you.

Yeah, So certainly given the higher lap up against a 21, 2% same restaurant sales in the prior year, coupled with the consumer headwinds we wanted to take a very judiciously.

Speaker #3: So when I mentioned earlier , you know , taking general managers out of the market where the restaurants are going to open and bring them into higher volume markets , that has extra cost associated with it , which we think is important to make investment in so that general managers are better prepared and there's a better guest experience overall .

G dishes approach in setting guidance and it's been a bit choppy and so what we're seeing today is a bit better than the midpoint of the range, but we wanted to be thoughtful and create a wide range because of the uncertainty that's being faced with consumers today and so how long the shutdown continue and what will that be.

It's certainly a factor and one that's difficult to predict.

Speaker #1: Thank you . Our next question comes from Logan Rike with RBC Capital Markets . You may now go ahead .

Thank you. Our next question comes from Nick sets in.

Speaker #5: Hey good evening . Thanks for .

Mizuho you may now begin.

Speaker #2: Taking my .

Speaker #5: Question. Just on the Q4 comp, I recognize you guys give the full year guide, which implies a relatively wide range on Q4. So just any sort of directional commentary you could provide on Q4 same-store sales outlook.

Thank you.

Historically, you've talked about the diversity of your Cogs basket is being.

A little bit of a moat that allows you to under price inflation.

What beef now in the equation would you mind just updating us.

Brett Schulman: That appears to be our last question. I will now turn the conference back to Brett Schulman, Co-founder and CEO, for any additional remarks. Thanks for joining us today. Before we wrap, I want to take a moment to share my gratitude for our entire team. Last month, I spent time in the field visiting our restaurants in the Midwest and Southeast. Seeing the energy of our teams, the pride they take in delivering great food and hospitality, and the excitement of our guests was a powerful reminder of what fuels our success. This fall has been a period of continued growth, welcoming new guests, strengthening our operations, and investing in the people who bring our mission to life every day. As we head into the holiday season, we're grateful for the dedication of our team members, and the loyalty of our guests. We remain energized by the opportunities ahead.

And in terms of the composition of the Cogs Basket and then two just on the AGM investment.

Speaker #3: Yeah . So certainly , given the higher lap going up against a 21.2% , same restaurant sales in the prior year , coupled with the consumer headwinds , we wanted to take a ferry judicious , judicious approach in setting guidance , and it's been a bit choppy .

Should we think about that hasnt incur incremental cost in labor in 2026.

Any comment there would be helpful.

Speaker #3: And so , you know , what we're seeing today is a bit better than the midpoint of the range . But we wanted to be thoughtful and create a wide range because of the uncertainty that's being faced with consumers today .

Yeah.

On the diversity of the Cogs basket, there isn't a material change in that makes them were also 25% typically in protein is 25% credit is 25% grocery and 25% everything else.

Speaker #3: And so how long will the shutdown continue and what will that mean ? It's certainly a factor in one that's difficult to predict .

Adding beef has not changed materially.

And the overall costs from an input cost standpoint, and then when we're looking at AGM. So I appreciate you bringing that up.

Speaker #1: Thank you . Our next question comes from Nick session with Mizuho . You may now begin .

Re imagined the general manager and training role and elevated it.

Speaker #17: Thank you . You know , historically you've talked about the diversity of cogs basket as being , you know , a little bit of a moat that allows you to underprice inflation .

Brett Schulman: Thank you for your time and support. We look forward to connecting again in the new year. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

For those who are ready to an assistant general manager roles. So its not an incremental head count per se, but it is at a higher.

Speaker #17: What beef ? Now in the equation , would you mind just updating us in terms of the composition of , of the cogs basket .

Overall compensation rates and so there'll be some modest impact to overall labor as we go into 2026.

Speaker #17: And then two just on the AGM investment , you know , should we think about that as an incremental cost in labor in 2026 .

Thank you. Our next question comes from Brian Vaccaro with Raymond James You May now begin.

Thanks first amount of bid ask but I thought I'd follow up on recent trends and just given your footprint in the Dnb market I'm curious, if you're seeing any outsized softness in that region. During the government shutdown or more broadly to what degree do you think that could be having an impact on your business. Thank you.

Speaker #17: Any comment there would be helpful .

Speaker #3: Yeah . So on this of the Cogs basket , there isn't a material change . In that mix . Overall . So 25% typically in proteins 25% produce 25% grocery and 25% everything else .

Speaker #3: Those adding beef has not changed . It materially in the overall cost from an input cost standpoint . And then when we're looking at .

Yeah Ryan.

Did not initially see any impact and in the most recent week says.

Paychex side going out to the government workers, we have seen some softness creep in but I wouldn't say, it's acute or any can severe at this point.

Speaker #3: AGMs, I appreciate you bringing that up. We've reimagined the General Manager in Training role and elevated it for those who are ready to an Assistant General Manager role.

Great. Thank you.

Speaker #3: So it's not an incremental headcount per se , but it is at a higher overall compensation rate . And so there'll be some modest impact to overall labor as we go into 2026 .

So it appears to be our last question I will now turn the conference back to Brooks Chairman co founder and CEO for any additional remarks.

Thanks for joining us today before I wrap I want to take a moment to share my gratitude for our entire team.

Speaker #1: Thank you . Our next question comes from Brian Vaquero with Raymond James . You may now begin .

Last month I spent time in the field visiting our restaurants in the Midwest and southeast.

Speaker #2: Thanks. Most of mine have been.

Seeing the energy of our teams the Friday taken delivering great food and hospitality and the excitement of our guests is a powerful reminder of what fuels our success.

Speaker #5: Asked , but I thought I'd follow up on on recent trends . And just given your footprint in the DMV market , I'm curious if you're seeing any outsized softness in that region during the government shutdown or more broadly , to what degree you think that could be having an impact on your business ?

This fall has been a period of continued growth welcoming new guests strengthening our operations and investing in the people who bring our mission to life every day.

Speaker #5: Thank you .

Speaker #2: Brian . We did not initially see any impact . And in the most recent weeks , as paychecks got going out to government workers , we have seen some softness creep in .

As we head into the holiday season, we're grateful for the dedication of our team members and the loyalty of our guests we remain energized by the opportunities ahead. Thank you for your time and support we look forward to connecting again in the new year.

Speaker #2: But I wouldn't say it's acute or anything severe at this point.

Yeah.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Speaker #5: Great . Thank you .

Speaker #1: It appears to be our last question . I will now turn the conference back to Brett Schulman co-founder and CEO for any additional remarks .

Speaker #2: Thanks for joining us today . Before we wrap , I want to take a moment to share my gratitude for our entire team .

Speaker #2: Last month , I spent time in the field visiting our restaurants in the Midwest and Southeast , seeing the energy of our teams , the pride they take in delivering great food and hospitality , and the excitement of our guests was a powerful reminder of what fuels our success .

Speaker #2: This fall has been a period of continued growth, welcoming new guests, strengthening our operations, and investing in the people who bring our mission to life every day.

Speaker #2: As we head into the holiday season, we're grateful for the dedication of our team members and the loyalty of our guests. We remain energized by the opportunities ahead.

Speaker #2: Thank you for your time and support. We look forward to connecting again in the new year.