A person walks past a Cava restaurant location in Pasadena, California, Feb. 6, 2023.
Mario Tama | Getty Images
Mediterranean restaurant chain Cava saw its sales rise 12.8% in 2022, report says regulatory filings released Friday when it filed to go public through an IPO.
It plans to trade on the New York Stock Exchange using the ticker CAVA.
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Founded in 2006, Cava Group opened its first fast-casual location in 2011, modeling its homemade Mediterranean meals on the formula popularized by Chipotle Mexican Grill. It acquired Zoes Kitchen in 2018, taking the rival Mediterranean chain private for $300 million.
Over the past five years it has converted Zoes’ footprint into new Cava locations. The last eight Zoes restaurants, which closed in March, will open as Cava units this fall.
Last year, the company’s net sales rose to $564.1 million, 12.8% higher than the year before. By comparison, rival fast-casual chain Sweet green reported revenue of $470.1 million in 2022. The salad chain went public in November 2021 and has a market capitalization of $1.06 billion.
But Cava’s legal registrations showed that it is still not profitable. Losses increased from $37.4 million in 2021 to $59 million in 2022.
Still, the company is showing signs of moving closer to profitability. Net loss for the 16 weeks ended April 16 was just $2.1 million, less than the net loss of $20 million for the same period last year. Sales have also picked up, rising 27.4% to $196.8 million over the same time.
Same-store sales of Cava rose 28.4% in the first quarter. According to the filing, the 3.7 million loyalty members accounted for a quarter of those sales.
The company opened 263 locations as of April 16 and plans to open 34 to 44 new locations by the end of the year. More than 80% of Cava’s locations are in suburban areas. It expects it could have as many as 1,000 locations in the US by 2032 as it branches out into new regions like the Midwest.
Like other fast-casual chains Chipotle and Sweetgreen, Cava is leaning toward drive-thru pickup lanes for digital orders.
Cava’s market debut would end the long restaurant IPO drought that began last year when the war in Ukraine, inflation and rising interest rates led to rocky market conditions. Even outside of the restaurant industry, companies that were once eager to go public, such as Reddit and Impossible Foods, have held back, though J&J’s Kenvue spinoff was successful.
But investors could be hungry for Cava shares despite concerns about a potential recession this year that will hit demand for restaurants. Shares of Sweetgreen are up 10% this year, while Chipotle’s is up a whopping 51% in the same time.