Mediterranean restaurant chain Cava files for IPO as revenue climbs
An individual walks previous a Cava restaurant chain location on February 6, 2023 in Pasadena, California.
Mario Tama | Getty Images
Mediterranean restaurant chain Cava noticed its revenue rise 12.8% in 2022, in accordance with regulatory filings launched Friday as it filed it go public by way of an preliminary public providing.
It plans to commerce on the New York Stock Exchange utilizing the ticker “CAVA.”
Cava Group was based in 2006 and opened its first fast-casual location in 2011, modeling its build-your-own Mediterranean meals after the formulation made standard by Chipotle Mexican Grill. It acquired Zoes Kitchen in 2018, taking the rival Mediterranean chain personal for $300 million.
Over the final 5 years, it is converted Zoes’ footprint into new Cava places. The final eight Zoes eating places, which closed as of March, will open by this fall as Cava items.
Last yr, the corporate’s web gross sales climbed to $564.1 million, 12.8% larger than the yr earlier. For comparability, rival fast-casual chain Sweetgreen reported 2022 revenue of $470.1 million. The salad chain went public in November 2021 and has a market worth of $1.06 billion.
But Cava’s regulatory filings confirmed it nonetheless shouldn’t be worthwhile. Its losses widened from $37.4 million in 2021 to $59 million in 2022.
Still, the corporate has confirmed indicators of getting nearer to profitability. Its web loss throughout the 16 weeks ended April 16 was simply $2.1 million, narrower than its web lack of $20 million throughout the year-ago interval. Its gross sales have additionally picked up, rising 27.4% to $196.8 million in the identical time.
Cava’s same-store gross sales soared 28.4% within the first quarter. Its 3.7 million loyalty members accounted for 1 / 4 of these gross sales, in accordance with the submitting.
The firm has 263 places open as of April 16 and plans to open 34 to 44 new items by the top of the yr. More than 80% of Cava’s places are in suburban areas. It anticipates it may have as many as 1,000 U.S. places by 2032 as it branches out into new areas, just like the Midwest.
Like fellow fast-casual chains Chipotle and Sweetgreen, Cava has been leaning into drive-thru pickup lanes for digital orders.
Cava’s market debut would break the lengthy drought of restaurant IPOs, which started final yr as the struggle in Ukraine, inflation and rising rates of interest led to rocky market situations. Even outdoors the restaurant business, firms once-eager to go public, like Reddit and Impossible Foods, have held again, though J&J’s Kenvue spinoff was profitable.
But buyers might need an urge for food for Cava inventory, regardless of considerations a couple of potential recession this yr hitting restaurant demand. Sweetgreen’s shares have risen 10% this yr, whereas Chipotle’s have climbed a whopping 51% in the identical time.