The parent of the Cava chain went public on Friday with plans for an initial public offering.
Washington, D.C.-based Cava Group Inc. had previously confidentially filed for an IPO, but the move on Friday brings more disclosure to the plans for the Mediterranean fast-casual concept, which was founded 12 years ago and ended the first quarter with 263 restaurants across 22 states. Another 34 to 44 net new Cava locations are projected to open this year.
In its preliminary prospectus filed with the U.S. Securities and Exchange Commission, Cava said it grew revenues to $564 million in fiscal 2022, compared with $500 million the prior year.
The company reported a net loss of $59 million last year, but is moving toward profitability. For the April 16-ended first quarter of 2023, the net loss had shrunk to $2 million, compared with a loss of $20 million in the first quarter of 2022.
Same-store sales for the chain were up 14.2% in fiscal 2022 year-over-year, and up more than 28% in the first quarter.
Cava was born as the fast-casual spinoff of a full-service restaurant called Cava Mezze developed by three friends who were the children of immigrants from Greece: Ted Xenohristos, Ike Grigoropoulos and Dimitri Moshovitis. They opened Cava Mezze in Rockville, Md., in 2006 and the concept was a hit. The three partners later began selling some of their signature dips and spreads in local grocery stores, bringing now CEO Brett Schulman in to grow that business.
The packaged-goods business did grow—Cava products are now available in more than 650 retail outlets nationally, including Whole Foods. But in 2011, Schulman also helped launch the limited-service “chef casual” concept now known as Cava, with guests walking a makeline to build their bowls, salads or meals.
The concept took a big step forward in 2018, when Cava acquired the then-publicly traded Zoe’s Kitchen chain in a $300 million deal that was funded largely by former Panera Bread CEO Ron Shaich’s Act III Holdings. Since then, Cava has converted 145 Zoe’s locations, which has helped the brand move across the country quickly.
Along the way, Cava has evolved into a multi-channel brand, including delivery, catering and the CPG revenue streams. Dominating the Mediterranean category, Cava’s health-focused menu has had broad appeal, in particular drawing in Gen Z and Millennial diners.
Unlike a lot of fast-casual chains, Cava has a fairly even split between lunch (55%) and dinner (45%). Last year about 65% of sales came from in-restaurant orders, and 35% were digital—though digital sales are growing. Cava said sales through digital channels increased 51% last year, and digital orders tend to have a 27% higher average check.
Average unit volume in 2022 was $2.4 million. Despite the inflationary climate last year, Cava grew its restaurant-level margins to 20.3%, though menu price increases were kept to less than 5%.
The prospectus did not indicate how much money the chain hopes to raise with the IPO or how many shares it intends to sell. Shares will be listed on the New York Stock Exchange under the symbol CAVA.
UPDATE: This story was updated to correct the average unit volume for 2022.
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