Mediterranean fast-casual restaurant chain Cava Group confidentially filed to go public with the U.S. Securities and Exchange Commission (SEC) this week, signaling the resiliency of the restaurant industry despite inflationary pressures on consumers.
It's parent company Cava Group launched its first full-service Cava Mezze restaurant in the greater Washington D.C. area in 2006, and later opened its first fast-casual location--originally called Cava Mezze Grill, then rebranded as Cava Grill and then again as just Cava--in 2011.
Cava restaurants operate as build-your-own Mediterranean meals, offering sandwiches, pitas, salads and other menu options under the business model made successful by similar chains like Chipotle Mexican Grill
In 2011, Cava Group acquired Zoe's Kitchen for about $300 million in a deal that expanded its footprint from 66 locations to 327 across 24 states in the United States. The company also sells branded dips and spreads, like tzatziki dressing and spicy hummus, at Whole Foods
Cava Group said in its filing that the total number of shares to be offered in its initial public offering and the price range for that offering have yet to be determined.
The company also said its offering is subject to market conditions and other factors, signalling that there is a chance its IPO will be delayed or even dropped depended on how Wall Street responds to a forecasted recession this year.
Cava is the first restaurant company so far this year to test a potential market debut, following a near halt of the IPO market in late-2022 as companies were concerned about how their offerings would perform amid decades-high inflationary pressures and the macroeconomic effects of Russia's war with Ukraine.
So far this year, investors have remained positive towards public companies operating in the fast-casual space. Industry-leader Chipotle is currently up about 20% year-to-date as the chain's price increases have led to sales growth. However, the company misses expectations for earnings, revenue and same-store sales in the fourth-quarter as consumer pulled back on spending late last year.