Welcome back, everyone. John Ivanko, J.P. Morgan. Happy to have CAVA Brett Schulman, Tricia Tolivar, joining, you know, from the company recent IPO June of 2023 from J.P. Morgan. Congratulations on your success. You know, and as, you know, we've kind of, you know, thought about, you know, the last six months, you know, we, we've, you've hit all of your development targets. You've hit your new unit volumes. You've exceeded your new unit volume targets. You've exceeded your margin targets. A lot has gone right. You know, when and from a CEO, when you look at, you know, kind of where you stand in the world, how does this company mitigate risk while ensuring future returns? What is it that you're the most focused on, you know, not just, you know, what you're going to do right, but what you don't do wrong? Yeah, thanks, John. Thanks for having us. It's great to be here. We think about everything. Often people ask me what keeps me up at night. I say everything. One thing we're really laser-focused on is developing those great future leaders, our GMs to run those new restaurants we're trying to build and open, and make sure we've got the right talent to deliver on our brand proposition, our great Mediterranean unique cuisine where taste and health unite with that Mediterranean hospitality, and then making sure we've got the infrastructure to support our scale, which we've invested in heavily over the years. It's everything from, you know, our new production facility that just went operational last month in Southwest Virginia. That's a second-sister facility, that's a 55,000 sq ft state-of-the-art facility where we produce our chef-crafted dips and spreads and some of our dressing bases, takes that complexity out of the four walls of our restaurant and supports growth up to at least 750 restaurants, or our digital ecosystem where last year we replatformed and launched, actually in January 2022, a new microservices architecture, which is a highly scalable architecture for our digital ecosystem. And then going back to those future leaders, the GMs, we developed our Academy GM network. So this is kind of, in a sense, our farm system where we have over 55 Academy GMs, including multi-unit leaders today. Those are our top-tier general managers that go through a certification program, and they get certified as an Academy GM and become a training restaurant where we train those future leaders to open those new restaurants. It's really thinking about scalable infrastructure and making sure we have the right leaders for those future restaurants. What's interesting, your revenue in fiscal 2024 by our estimates will still be under $1 billion. So technically, you know, you don't have scale, you know? So, I mean, considering your capabilities that you have, which, you know, are extraordinary, what is it that your current size isn't allowing you to do that you will be able to do in the future as your revenue base substantially grows? Well, I think we've always tried to punch above our weight, as referenced by some of the things I, I just talked about. I think it just continues to allow us to mature and deepen our capabilities. One of the things that we're embarking on now is really taking our existing data infrastructure and broadening and deepening those capabilities, everything from our loyalty program that we're gonna relaunch at the end of this year. We're in a test pilot. It's a loyalty program we've had for a decade now. So I'm excited to leverage the infrastructure we've built as well as our emerging data capabilities and things like we talked about at the earnings call where we're embarking on a multi-year journey of an initiative called Connected Kitchen, which is leveraging everything from camera vision and generative AI on top of our data infrastructure to make our operators more efficient, our guests more engaged, and our business analytics more insightful. That's gonna add value over the long haul. So let's, you know, let's view loyalty as a part of marketing. So, you know, loyalty, let's talk about where we were, you know, the journey that we've been on and the changes that you expect to make and what you expect to accomplish with this and what the current timeline would be. Yeah. So I mentioned, you know, we've had the same program for 10 years now, and we would have liked to have relaunched it a few years ago, but our job is to make sure we prioritize and not do too many things at once. Excited that we're finally able to get after this. So our traditional program was a spend X, get Y construct, spend $88, get 8. In November, we converted that to an earn and bank points model, so a bankable points model. And then in Houston market specifically, we launched a test pilot, which we're gonna expand to the Carolinas here shortly, where we created multiple different types of rewards to redeem. And so what our goal is, is a couple things. One is what we saw historically is that our lower and medium-tier frequency users really didn't feel engaged with the program. They didn't feel like it was so attainable. So we're looking to give them easier hurdles, make them more engaged, and drive frequency in those lower and medium-tier users. And then our power users, our upper-tier users, they weren't really feeling the impact, right? The $8 would get credited. They wouldn't really feel it. They wouldn't have any kind of value add for it. And so now we wanna empower them and put in their hands the ability to redeem their rewards of their choice on the occasion they want to redeem them on. Our plan is to relaunch this at the end of the year, and then that becomes the base phase of a multi-phase journey where we'll layer on unique challenges and incentives that are really becoming personalized to you and your behavior as a guest of CAVA, how you like to engage with us, what items you like to purchase to create greater value in each experience you engage with us on. You know, and things, you know, for example, you know, double points. I don't know if you'll call them stars, but double points maybe in, you know, certain days of the week or certain times of the day. You know, there'll be more of that more specific behaviors, I assume, that you'll be able to drive with this program. Yeah, absolutely. And you can even think about interesting things that are unique to us, like our CPG channel where you could potentially redeem a reward where you get a free 8-ounce container of that Crazy Feta at Whole Foods, and then we can provide you some recipes to enhance the food in your kitchen, not just the food you get from our kitchens. You know, do you want to pivot to Connected Kitchen, so as part of Connected Kitchen, the new labor scheduling model, is that part of the same program, or is labor scheduling separate? That's different. You know, Connected Kitchen is a much more forward-looking initiative based on our data infrastructure and Generative AI, whereas the labor deployment model, which we put in test in 20-30 restaurants, is really about, you know, our business grew, same restaurant sales, 17.9% last year. So significant dynamic growth. Also, when you think about the channel mix shift coming out of the pandemic, and we really looked deeply and reviewed how we are deploying our labor hours, and we felt there was an opportunity to much better align and reallocate those same amount of labor hours but in a much more efficient, effective way to set our team members up for better success, ultimately delivering better guest experience, better speed of service, better quality of service that matches our revenue curve, and taking some of the tasks that they were currently doing during peak hours, redistributing them during pre and post-peak hours so that they're focused on that guest experience during those peak hours. You know, perhaps telling them what to prep and when to prep and, you know, visually, as part of the Connected Kitchen, you know, eventually the Connected Kitchen will drive that labor allocation model, I would imagine. Yeah. So you can imagine, you know, longer term, our grill cook, the screen telling him how much chicken to drop every 30 minutes based on how much is in those bowls on the line, how much demand is coming through real-time channels. You can even imagine, at our POS where the POS is recognizing the premium attachment in the bowl that's about to be rung. We don't have to call it down the line. The cashier doesn't have to understand what it is. In back of house, how much of a topping to be prepping, every shift, every hour, again, based on real-time demand, historical data, to free up our team to deliver on our mission, which is bring heart, health, and humanity to food and deliver that hospitality and engagement with our guests. So let's talk about, you know, the consumer, CAVA's, you know, current place within the overall, you know, consumer consideration set, where the pricing is. McDonald's has made, you know, some, you know, fairly negative comments about its low-income consumer actually trading to grocery food at home. You know, Starbucks has seen some weakness in their occasional afternoon business, their discretionary business. Those are two big businesses that touch a lot of customers. You know, both have given some fairly, you know, negative reads, one would say, on the current environment, current first quarter, even for the full year in the case of McDonald's. So how do you feel about your consumer? You know, maybe talk about the demographics, how they feel about your pricing, what they're choosing between, you know, and their willingness and receptivity of even increasing their frequency. Yeah. So what we've experienced in 2023 with regards to the consumer is our consumer's been really resilient. So what we found in 2023 is with a very strong positive traffic trend and incredible same-restaurant sales growth, that consumer was continuing to increase in their premium attachments. So what I mean by that is higher incidence of our Harissa Honey Chicken, for example, also higher incidence of our pita chips. If you haven't had them, I highly recommend giving them a try. They're quite addictive. But it's something that we're finding that, we were anticipating that there might be some pullback, but that is something that we did not experience in 2023. But as we view it, we wanna make sure we're providing great value for our guests. That's something that's super important to us. We measure that value through our brand health survey two times a year and wanna make sure that we're priced appropriately so that we can be a good option for a broad variety of consumers across our over 300 restaurants in 24 states. Are you seeing a consumer trade down? I see it's a difficult trade to make a trade from CAVA to traditional fast food. Are you seeing trade from full service into CAVA? We do believe that there is likely some trade from full service to CAVA. So what we're finding is that CAVA's able to provide a great value, a tremendous amount of convenience in a very experiential way. And so we're finding that we're filling a need for consumers to have our incredible bold flavors and cuisine where taste and health unite in a wonderful environment, and that is something that, from a value perspective and something that we believe consumers, the modern consumers, looking for today. It's interesting, you know, that your CAVA products are available in every Whole Foods in the country, even if a CAVA restaurant isn't there. So maybe there is some brand awareness, some brand awareness maybe around the IPO and some of the great press that you've very well deserved. You know, so talk about what it's like for CAVA to enter a new market, what some of the new unit volumes have been, you know, the type of white space opportunity that you have, you know, from the current unit phase. Yeah. So from our perspective, we've got tremendous white space opportunity. And as we enter into new markets in 2023, we found that our new restaurants were highly productive. So those restaurants go into those markets, and we like to enter a new market with at least three restaurants. We'll be going into Chicago later this year, with three restaurants. And that's something that provides us a lot of scale, both from an awareness perspective as well as a supply chain perspective, so you can get efficiencies in that production. And as you have a number of restaurants in the market, as you open more, the existing restaurants tend to grow as well as the new restaurant opens in a more productive way. Your business model has taken some complexity, even some risk, out of the restaurants themselves doing such dressings, dips, spreads. Obviously, in your commissary, there's some other value-added activities that your suppliers do. And yet, despite that, your prime costs, as we look at them, food and paper plus labors, it's kind of in the mid-50s. It's excellent. You know, so as we kinda think about the margin journey from here, I mean, you're already in a top 1% type of a business, even as we're talking about only 300 units on the way to, you know, some number of thousands. I'll say that. You know, so what, what, where, where, where do margins kinda happen from here? When we talk about getting leverage in a market, getting scale, and what have you, do you expect that to come through further prime cost growth, prime cost average, or where are the other fixed costs in the business? So as we've talked about, it was 2023 was a phenomenal year in many regards. So 17.9% same-restaurant sales drives a lot of efficiency through the P&L, and we were able to deliver very, very strong restaurant-level margins. But we also recognize what's important for long-term sustainable growth is continued reinvestment in our consumers, in our team members, for us to be able to continue to drive those significant returns over time. So we don't anticipate 2024's restaurant-level margin to be at the same level as 2023, but what 2023 does is show the power of the model. So we'll make those investments in 2024, and as we continue to grow, we'll see leverage in the P&L, through the power of the model that we're able to deliver. Okay. You know, and why is it, is it your belief over time that you want to price less than inflation? You know, I mean, philosophically, you know, how do you think about, you know, using pricing relative to your labor costs and your food cost inflation? Yeah. So certainly, you know, I talked about we're focused on investing in our team members as well as in our guests, and pricing is one way to do that. And so we wanna do everything we can to minimize that pricing so that we continue to be a strong value option for our guests, and that's how we'll approach it in the future. You know, part of managing any brand is to expand use cases, both for existing customers, also for potentially new customers. I understand that you're working on a CAVA 3.0, you know, so could you, you know, talk about what those how those use cases might expand if you achieve what you would like with this project? Yeah. So it's really called Project Soul, and this is an opportunity to enhance our physical environment, so really aesthetically warm up the environment a little bit that we think we have a chance to attract even more in-restaurant occasions. Tricia touched on some of the trade-down from full service, and I think you're seeing some pretty significant secular shifts in our industry and a convergence of full service down into fast casual where, in the post-pandemic and post-inflationary period, the full service traditional full service format is struggling to deliver a relevant value proposition to the modern consumer. Consumers are now looking and opting in and shifting into fast casual more where they can get that quality, relevance, convenience, and experience in a place like CAVA and go out, whether it's before a movie, a family after a sports practice, certainly in our suburban and our smaller-town markets, and be a great opportunity in a physical channel. These are the same guests that wanna interact with us on a digital channel. We don't think it's an either/or. We think it's an and: great digital channels and great physical channels where we put the power in our guests' hands to opt into their channel of choice depending on their needs state. Because one day, it might be they wanna drive-thru through one of our current 31 digital drive-thru pickup lanes to pick up their digital order. Another day, they may wanna deliver to their doorstep at their house. Another day, they may wanna come meet a friend and enjoy a meal in our dining room that we're looking to enhance that aesthetic. Do you have any? So let me stick on the digital pickup lanes for a second. You know, percentage of 2024 and 2025 openings with those lanes, and do you anticipate full drive-through ordering at some point? So we do not anticipate full drive-through ordering. We view your what's in your hands be your device to be able to order from our restaurants, and it's much more efficient to be able to go through the line and pick up in that manner. Certainly, we see opportunities to create a more automated process through pickup, so we can anticipate that you are coming through the line, so we're ready faster. And then as we think about 2024 and beyond, we'll see an increasing number of pickup lanes as part of our portfolio. Wanna make sure that we're not pushing our teams to go into investment decisions that don't make sense in an attempt to hit a number. So we'll just make sure we optimize as much as possible as we make those choices. And it is interesting. I mean, as you have more pickup lanes and perhaps attract more of a full-service customer, do the demographics of the concept change? We have in our notes, 60% of customers are from the in excess of $100,000-income cohort. Do you think some of these projects, like the pickup lane or, you know, for example, a more pro you know, Project Soul, you know, broadening the appeal down, or do you think the opportunity is still to stay higher? What we're finding is that we're able to broaden the appeal. We're now in 24 states across the country, and we're in markets like Fayetteville, Arkansas, and Birmingham, Alabama, and Baton Rouge, Louisiana. And so really finding that the brand is resonating in many, many other markets. A bit of the stats that you were reflecting is a function of our own development. So we started in markets like Washington, D.C., L.A., both in New York City. All of that was essentially elevating those stats. And as we grow and expand and mature, we're finding success in those markets that I mentioned and many, many others. I often say that we haven't found a market yet that doesn't love CAVA, and so that's what that's great and really expands our opportunity, and we use that to further inform our real estate strategy and our development approach over time. You know, having, you know, 55 Academy GMs, is that the primary constraint of growth at this point? I mean, what is as you think about how fast fast should be? It's really talented GMs we think is the biggest governor to growth. We've got a great pipeline, great real estate development team. It's making sure we have qualified, talented leaders, which is why we've invested in our Academy GM program and continue to grow that to make sure that we have a pipeline that can support our growth aspirations. Okay. There were some changes made to hourly compensation. You know, we released the overall compensation structure, you know, for hourly workers, you know, this year. How has that been received? How's overall turnover and execution levels relative to where you would like the brand to be? Yeah. It's continuing to improve, our turnover numbers and metrics. We're encouraged by the trends we've seen. And look, this is something that's been core to our DNA, something we've done over history. You can go back throughout our journey. In 2016, we took our national starting wage to $13 an hour, where many were paying $9 and $10 in the states we were operating in. We were the first to give our team paid time off to vote. We were one of the first to deploy mental health benefits in January of 2021 to our team members, whether they're on our health plan or not, available to all their family members. And we continue, as Tricia noted, to make reinvestments in our team to grow long-term shareholder value and restaurant-level margins. We've seen the ability to not only drive turnover further down but attract even higher-quality team members to our business. And how, you know, the labor scheduling sounds to be one part of it. You're making, you know, more effective and efficient for employees to do their jobs and focus on guests at the time guests come in. That makes a lot of sense. But we hear other companies talk about use of automation, you know, and other types of equipment, you know, that can maybe speed up and simplify, maybe make some things less complicated just within the store themselves around chopping vegetables or cooking meats or what have you. So, you know, the overall, you know, using equipment, using robotics, you know, other, you know, changes of equipment, let's just call it, you know, where are we in that journey, and does that make sense for the type of brand that CAVA has? Yeah. I talked about Connected Kitchen, more data-centric initiative, which I think is the most relevant near-term opportunity for us. We do think automation is an opportunity as a supporting actor, not necessarily a core or lead actor to our business. Remember, our mission is to bring heart, health, and community to food. We are a restaurant. We talked about that in-restaurant physical experience. People love to interact with our team members, feel that Mediterranean hospitality. So what kind of automation can we deploy to free our team up to deliver on that hospitality? And that could be everything as, you know, simple and mundane as some things we've done the last few years, which is automate the cutting of our pita chips versus them manually cutting it, or automate the slicing of our onions versus them manually slicing it. We talk about our production facilities, which is a massive automation facility. Then you can think about maybe on our second digital make lines, but not necessarily our in-restaurant serving line because, again, we are a restaurant. We wanna deliver that hospitality. So how does automation in the background free our team up to deliver that human connection? Well, even automating the second make line is important considering 35% of your sales is digital. So is that something that is, you know, it may be, you know, behind the scenes being piloted or looked at? Do you have a specific project or system in mind? Yeah. It's something we're always looking at: how do we incorporate automation, again, to improve our team member experience and the guest experience? Okay. It's a big theme of this event, so, you know, so I, you know, thank you for that. You know, many of us know Ron Shaich from many years as your chairman. Obviously, you know, the founder of Panera and, you know, the person who sold that business. So, you know, going through Ron's experience with Panera and obviously his deep experiences and hopefully he's listening, you know, well-expressed opinions. You know, what are the types of things as you know, he has led you through at least some parts of the business, including buying Zoës. You know, what have been the important lessons that you have gotten from him and other support that you've gotten from the board and how you're feeling about your overall C-level management team at this point? Yeah. We have a tremendous board, including Ron, who's our chairman. And, you know, his advisement has been invaluable, right? He has climbed the mountain. We are trekking up. And for him to be able to help me think through where we wanna take this business and what we need to be doing today to make sure we're just as successful, if not more, in three or four years from now. I often say I've had to reinvent myself four times, from startup CEO to growth CEO to private enterprise-level CEO to now public company enterprise-level CEO. I've had to change how I run the business and having that advisement and how to think about where I spend my time, how I lead the business, how we prioritize, how we focus, and where there might be challenges lurking around the corner as we get to now 320 restaurants or 500 restaurants or 1,000 restaurants because the numbers we're putting up now, they're a byproduct of all the work we did a couple of years ago. So what are we doing today to make sure those numbers are the same, if not better, a couple of years from now? Okay. Other composition of the board and just your current completion of your C-level team or other functionalities? Yeah. Yeah. So I'm very fortunate. You have Tricia sitting up here with me. We have a tremendous leadership team, executive leadership team I've been able to recruit over the last few years. We brought on a CIO last year with a lot of these more significant tech initiatives, to make sure we've got the right leadership in place, Beth McCormick. And we will, in short order, be bringing on a chief development officer. That will be the final piece of our leadership team. We have a tremendous head of real estate and a great head of design and construction that do a phenomenal job. They will roll up to this new chief development officer as we accelerate our de novo growth in the out years. We wanna make sure we have that experienced singular leader to lead our development strategy. Yeah. I've heard some companies, you know, start to talk about, you know, advantages and disadvantages of scale, particularly around tech. You know, that, you know, company a tenth the size needs to spend the same amount on their tech stack as a company 10 times larger, I guess. Is that your opinion? And, you know, it's kind of the first point. And secondly, as we think about longer-term G&A out of the restaurant, you know, types of leverage, how do you think about, you know, organizational spend relative to your overall revenue growth? Yeah. I'll speak to the philosophical approach, and Tricia can kinda weigh in from the CapEx perspective. You know, we look at a hybrid approach. It's build versus buy, very much like we do with our culinary in our four walls. Where do we add value versus where do partners add value? And so for us, we built our own digital order ecosystem, but we integrated a loyalty engine from a third-party partner. And so that's how we view it. We always weigh the pros and cons, what makes sense for us to build in our own stack, and then layer in and incorporate third-party partners for the most effective, efficient tech stack. And I'll let Tricia weigh in on the CapEx piece. Yeah. So from a CapEx perspective, we carry on with what Brett was saying. And when you think about 2023 in our CapEx spend, that spend had a lot of money in it for Verona, so it's over a $30 million investment in that facility. We have been in a fortunate position that all along, we've been investing ahead of our growth. So I don't anticipate a need for significant CapEx spend as we move forward. Same thing on G&A. So I would anticipate our G&A growth to be at a lesser rate than our top-line growth. Okay. And obviously, this is a very high-returning, you know, box. I mean, it is, you know, something, you know, where systems have been firmly put into place as its controls. I understand your supply chain has its specific controls as well. So the box, at least on paper, makes one; it makes sense for it for franchising from a franchisee's perspective. Does it make sense from a corporate perspective? And as you think about just, let's call it, non-U.S. opportunities, is there demand for this brand outside of the U.S., as you currently see it? Well, we think it's certainly a global cuisine, but we're focused on domestic growth for the foreseeable future. Our goal is 1,000 restaurants by 2032. So we think we have tremendous white space opportunity and growth staring down the barrel of in the U.S. Whether franchisees, perhaps in, you know, some markets might you would take you some time to get to, if ever? Well, I like to say I reserve the right to evolve my opinion, but, and this is the great thing about our industry, right? There's a lot of different ways to success: franchise, corporate-owned, half-and-half, as Ron had at Panera. But right now, with the kind of cash-on-cash returns we're able to generate, the opportunity we have that we are creating and defining what we believe to be the next large-scale cuisine category with an aspirational brand positioning, we think the corporate growth model is the right one for us. You worked with three creative founders. I mean, or does their creative urge still exist? And are there other non-CAVA ideas that, even if they're on an informal basis, ever discussed with you? Yeah. I'm fortunate to have an amazing executive team, and I'm blessed to have amazing co-founders and partners. Ted Xenohristos, one of my co-founders, he's our Chief Concept Officer. He leads our culinary innovation team, including our other two co-founders. So, all that great, delicious CAVA food innovation that you see us pulse out is thanks to my co-founders. Okay. So I guess that's a no on another concept. Yeah. We have such opportunity with this concept. I think, again, we're so focused on it because I, I don't think these opportunities come along so often where we can truly define and create a new large-scale cultural cuisine category and have our brand be synonymous with it that, we believe, will, will long outlive us. Okay. You know, very interesting. So, you know, urban versus suburban. I mean, something we haven't really talked about in some time. I mean, you know, stores in D.C., New York, Boston, you know, what have you. But much of the success and the growth is actually going to come from suburbs. So as we kinda think about, you know, the overall footprint over time, where this business should be grown, how do you expect that the overall footprint to evolve? Yeah. So our expectation is that our growth will be largely 90% suburban and 10% urban as we go into new markets. The beautiful thing about the brand is we can be successful in both places. And so while the suburban markets have a slightly higher cash-on-cash return, generally because of the higher occupancy cost in urban locations, we just see lots of opportunity in many, many markets across the country. And it is interesting in that 'cause I happen to have gone to it in Woodland Hills, and one of your first units was in Los Angeles, which was a notoriously difficult market to do business. So, you know, are there any specific challenges in CAL? I'm just gonna use California as an example. It's easy to pick on now. You know, are there any specific challenges within a market, whether from a cost or a demand, you know, difficult regulatory opening kinda perspective that really have your attention to say, "Hey, listen, this is this is maybe where CAVA is not as easy or not as clean of a story as it could be in other places"? Yeah. Fortunately, we took a very contrarian approach. We went into a lot of those markets early in our career, so that makes expanding into other markets a lot easier. So, there aren't markets that we're shying away from for those reasons, and again, just evaluating opportunities. And when we look at the country, we look at factors in determining where do we wanna go to next and whether those are unemployment factors or challenges, overall, but we haven't found anything that would prevent us from going into something. You know, so you've been public less than a year, but are there any misconceptions in the public markets, maybe things that people don't appreciate in the public market that you would like to take a minute and give your opinion? Well, I think we've seen and grateful to see a lot of appreciation in the public market for what we're building. I think if there's anything, it's just the, you know, how passionately we believe the long-term opportunity and white space opportunity of Mediterranean and how broadly this cuisine appeals. As we, as Tricia talked about, how it's as we broaden out in the country where we're seeing this resonate, as we continue to broaden out, it's pushing down the income strata, how it resonates by gender, by ethnicity, by income levels, by generation. So this is a big, broad appeal cuisine that we think has tons of runway to go, in this country. So I think that might be something that we appreciate that we've seen continue to be the kinda snowball rolling downhill for the last 14 years that we think is just continues to gain steam. I do think that's a consensus view, but that's a good thing. Thank you. Thanks.