Unwritten Report Speaks Volumes About CFO Uncertainty

Forbes

29-04-2025

Study after study, headline after headline, and now earnings report after earnings report are showing the same thing: Business leaders are having a difficult time planning and managing in the current situation of economic volatility. But Deloitte's annual Q1 CFO Signals report likely captures the CFO's situation more clearly than anything else right now: The firm opted not to issue the report given the major changes in the macroeconomic picture in such a short amount of time.
An email Deloitte sent me last week said that they fielded the survey in late February. In just two months, 'we believe the results may no longer accurately reflect the current sentiment of CFOs.'
Today is President Donald Trump's 100th day in office, and the administration's new policies have forced business leaders to reassess their long and short-term plans, supply chains, budgets, customer base, and go-to-market strategies. And then, sometimes just days later, changes or reversals come from the executive branch, forcing businesses to start from zero and start figuring out their plans again. The outlook and ideas from late February can seem like they're from a past year, not just a past month.
It's not known if and when the frenetic pace of change will slow down, and what it will mean for business. Trump received some support as he campaigned on tax cuts and fewer regulations. The tax cuts he instituted in his first term are on their way to an extension, and regulatory changes have been relatively slow to come. But without some clarity and stability on the economy and global trade, it may be hard for any business to plan much further than the immediate future, which could make for a very long 1,361 days left in Trump's presidency.
One company that is optimistic about its future is fast-casual restaurant chain Cava. The Mediterranean food eatery has been on a growth path not only through its food choices, but by making customers and employees feel welcomed. I talked to CFO Tricia Tolivar about Cava's view of the future. An excerpt from our conversation is later in this newsletter.
Brand new Subaru cars sit in a storage lot at Auto Warehouse Co. in Richmond, California last month.
Last week was very good on Wall Street, especially compared to earlier this month. The Nasdaq rose 8.29%, while the S&P 500 saw gains of 5.59% and the Dow Jones Industrial Average was up 3.1%. Markets mostly held steady on Monday. What caused the markets to rise last week seemed to be the absence of chaos and optimism that new tariff deals would be announced soon. Last Tuesday, Trump said that he had 'no intention of firing' Federal Reserve Chairman Jerome Powell, following several days of insulting and threatening him with termination on social media. On Wednesday, he said the current 145% tariffs on Chinese goods would 'come down substantially.'
Even though Trump sounded like he was softening his tariff stance, there wasn't much progress in the last week. On Thursday, Chinese officials said there had been no motion in trade negotiations with the U.S., and reiterated that they want Trump to drop all unilateral tariffs. Chinese Ministry of Commerce spokesperson He Yadong said China is open to talks, but any such dialogue must be 'conducted on an equal footing and based on mutual respect,' and the U.S. must correct its 'wrong practices' before engaging with Beijing.
Tuesday morning, the Trump Administration confirmed a Wall Street Journal report that the 25% tariffs on foreign-made auto parts will be indirectly lowered gave automobile stocks a brief bump trading on Tuesday. Prices fell again as General Motors reported earnings and pulled its full-year guidance on tariff uncertainty.
More economic indicators may be on their way down. Wednesday morning, the Bureau of Economic Analysis will issue its estimate of GDP in Q1, and forecasts from economists are expecting quarter-over-quarter growth of 0.4%—a huge decrease from last quarter's 2.4% growth rate. The U.S. hasn't had negative quarterly GDP growth since Q1 2022, as post-pandemic inflation and supply chain woes battered the economy. If GDP growth is slow enough, it may signify that the U.S. is on the road to an economic recession.
ANDREW THOMAS/Middle East Images/AFP via Getty Images
Over the weekend, Trump posted on Truth Social that his new tariffs could end income taxes for 'many people.' Economists are skeptical of the claim, to say the least. Trump said that the increase in revenue collected from tariffs, coupled with the 'massive number of jobs' that will be created will make tariffs 'a BONANZA FOR AMERICA!!!' Studies on the probable impact of tariffs say it is not possible to generate enough money through tariffs to offset income taxes—especially because the goal is to reduce imports into the U.S., which would mean less money paid into the U.S. Treasury.
Many economists say that the cost of tariffs is ultimately borne by the consumer, meaning that any savings that may come to income taxes would be paid back to the federal government in another way. Tariffs are already impacting container shipping from China, which currently has a 145% tariff rate, writes Forbes senior contributor Pamela Danziger. U.S.-bound containers are down 40%, and given the long shipping route to the U.S. and the goods that usually come this time of year, analysts are expecting emptier shelves to greet consumers in the second half of 2025, just in time for back-to-school shopping.
Trump has eliminated some taxes, however. The Treasury Department and IRS announced they were scrapping new rules to audit business partnerships—an area that the Biden-era IRS said was rife with 'sophisticated maneuvers' to rack up undeserved tax benefits, writes Forbes contributor Joshua D. Smeltzer. Trump also quieted talk among Republicans of a potential new tax on millionaires, saying it would 'be very disruptive because the millionaires would leave the country.'
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Potentially good news on the economic front: Small businesses are still borrowing, and doing it responsibly. Live Oak Bancshares, a North Carolina-based bank that had the second most SBA loan originations last year, reported that so far in FY 2025, it originated $1.5 billion in loans, writes Forbes' Brandon Kochkodin. In comparison, FY 2024 saw $2 billion in loan origination all year. 'We have not yet seen a decline in potential borrowers' appetite,' said CFO Walt Phifer during the bank's earnings call last week. So far, delinquencies are low, and credit standards are tightening, the lender said.
Cava CFO Tricia Tolivar.
Mediterranean fast-casual restaurant chain Cava has seen a string of success, growing its profit by more than 35% last year with 388 locations nationwide. Tricia Tolivar has been the chain's CFO since 2020, and talked to me about her employee- and customer-centered approach to the company's finances. This conversation has been edited for length, clarity and continuity. A longer version is available here.
What does the business space look like now for fast-casual restaurants?
Tolivar: At Cava, we've been very fortunate to be able to deliver some of the strongest traffic growth of anyone in the public environment. We believe that's because of our strong value proposition with our guests, where quality, relevance, convenience and experience are incredibly important. The quality of food that we offer, the relevance of the Mediterranean diet, as well as the convenience. [Customers are] able to experience us in our restaurants, as 65% of our guests do, or enjoy our digital platforms where you're able to either have it delivered or pick up.
Last is the experience. We believe that right now, more than ever, it's incredibly important to reinforce the human connection and our Mediterranean hospitality. The experience in our restaurant is that we welcome everyone to our table and want to encourage those who come to share a meal with us and to enjoy this incredible cuisine. In this environment, it's important to leverage those aspects of the business so that we can continue to deliver on those strong traffic results that we've seen.
There is so much uncertainty today about the economy in general, about supply chains and consumer confidence. How are you seeing that at Cava? How does the fast-casual restaurant industry as a whole see it?
One of the other competencies that we admire in our organization is our ability to act with agility. Certainly in this environment, there have been a lot of changes, a lot of things to navigate, but our team is well positioned to adjust and adapt to those changes, while staying focused on our strategic objectives and what we want to deliver for the business overall.
For example, making sure that we're being thoughtful around pricing and the consumer. We believe it's important to make appropriate investments in team members and guests, so over the years we've been more modest in price increases on our menu. This year, we raised prices 1.7%. If you look at pricing from the end of 2019 to the end of '23, our pricing only went up 15%, where CPI went up 23%. That's an eight-point difference, and many in fast food went up over 30%. Making sure that we're not reacting to swings and some fluctuations in the short or medium term, and that we're being thoughtful in those changes.
I heard you had talked to some team members about how they don't like to chop onions and you made changes with your supplier to make sure they came pre-chopped. What kinds of things like that should a CFO be doing to work with employees and customers to create a better fit?
We believe that it's incredibly important to continue to work with our team members and our guests. Every quarter we do what's called a shoulder-to-shoulder in our restaurants so we can learn more about how to be better partners for the business overall. Last month, I worked in one of our restaurants. We are testing an expanded catering program this year, so I was capturing insights from the general manager on how we might be able to make enhancements from a technology perspective to make their jobs easier. The more we can take complexity out of our general managers' and team members' daily lives—like slicing pickled onions—and make it easier, the more they can focus on an even better guest experience.
I think it's critically important to spend time in the environment in which you're working, and bring that back to become a better finance leader and business partner overall.
I think it's critically important to spend time in the environment in which you're working, and bring that back to become a better finance leader and business partner overall.
What is one experience from Cava that is helpful to pass along to other CFOs?
The one experience I've learned is the importance of listening, and how listening thoughtfully to partners in the business, the guests in the organization and team members can drive outsized performance as you go forward.
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Which company's stock has had the best performance during Trump's first 100 days in this term?
A. Netflix
B. Palantir
C. VeriSign
D. Dollar General
See if you got the right answer here.