Dive Brief:

• Cava’s initial public offering raised close to $318 million, with shares beginning to trade at an initial value of $22 on Thursday, the company said in a press release.
• This IPO brings the company’s market capitalization to over $2.4 billion, according to Stock Analysis. 
• The company could raise an additional $47.7 million through its 30-day offering to underwriters, who can purchase another 2.2 million shares.

Dive Insight:

Cava’s IPO price was well above its initial estimated range of $17 to $19 per share, which could bolster confidence for other restaurant companies, like Fogo de Chao, Fat Brands’ Twin Peaks and Panera Brands, that have shared intentions to go public in the past. The funding will help Cava open new restaurants, with additional proceeds to be used for general corporate purposes, such as paying down delayed draw term loans used to finance construction and capital expenses at a production facility in Verona, Virginia, according to the press release.

Cava’s same-store sales were up over 28% last quarter and the chain has 263 restaurants. Revenue has been increasing at a compound annual growth rate of 52.2%, but losses have remained. During the first quarter, Cava reported a net loss of $2.1 million. 

Even though the company has been operating at a loss, Cava’s traffic is up and its customer satisfaction is higher than the rest of the fast casual segment, according to Merchant Centric data emailed to Restaurant Dive. Cava has a 4.01 star customer satisfaction rating compared to a 3.55 star rating from Panera. The overall satisfaction rating of the fast casual segment was 3.7 stars out of five. Customers highly rated Cava’s selection/availability and its food.