Yahoo Finance Cava plans for an IPO as customer numbers spike
Cava is out with its IPO plans.
The Mediterranean fast-casual restaurant chain plans to offer over 14 million shares for between $17 and $19 per share, which could raise between $245.6 million to $274.4 million dollars. Cava also expects to grant underwriters a 30-day option to purchase some 2.2 million additional shares.
Following the offering, there will be an additional 111.4 million outstanding shares, bringing the high-end valuation to what Cava believes is a roughly $2.1 billion business. Per the filing, the IPO will happen "as soon as practicable after this Registration Statement is declared effective."
The chain plans to list on the New York Stock Exchange under the ticker CAVA.
Cava said it expects to use the proceeds to open new restaurants. Any funds left will be used for general corporate purposes such as the payback of a loan used to finance its second production facility in Verona, Virginia, which broke ground in 2022. In 2016, Cava opened its first production facility in Maryland.
As of April 16, there are 263 Cava restaurants, and since it acquired fellow Mediterranean fast-casual chain Zoes Kitchen for $300 million back in August 2018, it has successfully converted 145 Zoes Kitchen locations into Cava restaurants. Throughout the rest of 2023, it plans to open 34 to 44 new Cava locations and open another eight converted Zoes (the rest of the locations left). By 2032, the company plans to have 1,000 locations in the US.
The company initially filed with the Securities and Exchange Commission on May 19, 2023, to go public.
The IPO comes on the heels of data showing major growth in foot traffic.
Per Placer.ai, in January 2023, visits to Cava locations skyrocketed 28.6% compared to the previous year, while the overall fast-casual chain space only saw a 4.9% increase. As of March 2023, visits to Cava are up more than 350% since January 2019.
More recently in April, visits to Cava locations increased by 1.4% from a year ago, whereas visits to overall fast-casual chains decreased by 4.9%.
Revenue is also up for Cava. In fiscal year-end 2022, which ended, December 25, 2022, Cava brought in sales of $564.1 million, a 12.8% increase from $500.1 million of total revenue in fiscal 2021.
The also company delivered a net loss of $59 million in fiscal year 2022, more than the previous year's loss of $37.4 million. Meanwhile, the chain said it has major plans to grow its physical and digital presence.
In the filing, Cava highlighted its omnichannel approach of digital, hybrid kitchens and drive-thru lanes — plus drive-thru pickup, which it launched prior to the pandemic in 2019. This fiscal year, the company says "a significant portion of our new restaurants opening...will have drive-thru pick-up capabilities."
Cava is not alone in the bid to go public this year. Other chains that have filed to go public include the Brazilian steakhouse chain Fogo de Chao and Panera Bread, which recently named a new CEO, effective July 1, 2023.
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Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
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