CAVA Group authorized a $100 million share repurchase program on Tuesday, the first buyback authorization since the company's June 2023 IPO. The board approved open-market purchases through the end of 2026, with no minimum commitment and full discretion to suspend.
The authorization amounts to roughly 2.8% of CAVA's $3.6 billion market capitalization as of Monday's close. Shares trade near $32, down from a November high of $42 but still 68% above the $19 IPO price. The company has posted seven consecutive quarters of positive unit economics since going public, with restaurant-level margins stabilizing in the 24-25% range after early volatility tied to labor recalibration and menu pricing tests.
This is the first repurchase program from a fast-casual concept that went public in the past two years. Sweetgreen has not announced buyback authorization. Portillo's suspended its program in early 2023. CAVA's move follows a fourth quarter in which same-restaurant sales grew 12.1% and the company opened 19 net new locations, bringing the estate to 381 restaurants across 25 states. Free cash flow for fiscal 2024 came in at $62 million, up from $18 million the prior year, driven by improved build-out efficiency and shorter lease negotiation cycles in second-generation real estate.
The timing reflects a shift in the capital allocation framework. CAVA has been funding unit growth almost entirely from operating cash, with no debt draws since IPO and minimal dilution. The $100 million authorization does not alter the 2025 expansion target of 58-62 new openings, nor does it signal a slowdown in site acquisition. It does, however, mark the end of the defensive posture many restaurant IPOs adopted during the 2022-2023 rate cycle, when returning cash was viewed as a sign of limited reinvestment opportunity.
Allocators should monitor two follow-on events. First, actual repurchase activity in the May-June window, when CAVA will be clear of its Q1 earnings blackout and free to execute. Second, any adjustment to the 2026 unit target of 1,000+ locations, which management reiterated in February but has not updated since the buyback authorization. If the company continues to buy back shares while maintaining unit growth guidance, it confirms margin durability and suggests CAVA believes its current valuation underweights the compounding value of the site portfolio.
The program runs through December 31, 2026. CAVA has not disclosed a repurchase cadence, leaving the market to infer appetite from 10-Q filings starting in May.