Mediterranean hotels outlet named Cava shared its earnings upgrade

May 23, 2023: On Friday, a Mediterranean hotels outlet named Cava experienced its earnings rise 12.8% in 2022, according to regulatory filings released as it filed it go public as an initial public outlet.

It is well decided to trade on the New York Stock Exchange using the “CAVA.”

Cava Group was founded and opened its initial fast-casual location in 2011, modelling its build-your-own Mediterranean meals after the formula was made famous by Chipotle Mexican Grill. It acquired Zoes Kitchen in 2018, taking the competition Mediterranean chain private for $300 million.

Over the last five years, it’s changed Zoes’ footprint into new Cava locations. The previous eight Zoes restaurants closed as of March and will open by this fall as Cava units.

The salad chain went public in 2021 and has a market value of $1.06 billion. Last year, the company’s net sales climbed to $564.1 million, 12.8% higher than earlier. For comparison, rival fast-casual chain Sweetgreen reported 2022 revenue of $470.1 million.

But Cava’s regulatory filings showed it still needs to be more profitable. Its losses widened from $37.4 million to $59 million in 2022.

Still, the company has shown signs of getting closer to profitability. Its net loss during the 16 weeks which ended April 16 was just $2.1 million, narrower than its net loss of $20 million in the year-ago period. Its sales have also risen 27.4% to $196.8 million simultaneously.

Cava’s same-store sales soared 28.4% in the first quarter. According to the filing, its 3.7 million loyalty members for a quarter of those sales.

The firm has 263 locations open as of April 16 and ideas to open 34 to 44 new units, which ends the year. More than 80% of Cava’s locations are in suburban areas. It anticipates having as many as 1,000 U.S. locations by 2032 as it branches out into recent regions, 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 long drought of restaurant IPOs, which began the previous year as the war in Ukraine, inflation, and rising interest rates led to rocky market conditions. Even outside the restaurant industry, companies once eager to go public, like Reddit and Impossible Foods, have held back, although J&J’s Kenvue spinoff surged.

But investors might have a desire for Cava stock, despite states about a potential slump this year hitting restaurant demand. Sweetgreen’s shares have increased 10% this year, while Chipotle’s have climbed a bigger 51% in the same time.