Dive Brief:

• Cava has confidentially filed a draft registration statement on Form S-1 with the U.S. Securities and Exchange Commission for a proposed initial public offering of its common stock, the company announced Monday.
• The total number of shares and price range have yet to be determined, the company said.
• Cava appears to be the first major restaurant company to file an IPO in 2023. IPO activity has slowed in the segment since 2021, a year that marked five high-profile restaurant IPOs. 

Dive Insight:

The fast casual company was worth about $1.3 billion as of April 2021 after it secured $190 million in funding. The company has been focusing on suburban growth over the last few years as it works to convert Zoë’s Kitchen units, which are typically located outside of metros, into Cava restaurants. Cava bought Zoë’s Kitchen in 2018 for $300 million. 

Cava has been innovating its model, as well. The chain launched its first mobile order pickup windows a few years ago. It also plans to put its April 2021 funding toward technology like one-touch, near-field communication to allow customers to pay and apply loyalty more easily. Cava, which has a CPG line, also invested $30 million in 2021 to open a 57,000-square-foot processing facility in Virginia to expand its products nationally. 

Cava, which has over 300 units, boasted 37% in same-stores sales growth in 2021 and $168 million in same-store sales, according to Nation’s Restaurant News. The chain managed to avoid significant sales declines during the early COVID-19 pandemic because a bulk of its stores are located in the suburbs, allowing it to capture consumers working from home.

Rising inflation hampered restaurant IPO and M&A activity last year, as the cost of capital rose significantly. A nine-unit Japanese restaurant, Yoshiharu Global, filed for an IPO in September at $4 per share. Cava’s filing could indicate that 2023 will be more active than last year. Mod Pizza, Torchy’s Tacos and Fogo de Chao previously expressed interest in going public in 2021. Fogo and Panera Brands, which had originally intended to go public with the help of Danny Meyer’s SPAC, could go public later this year, according to The Wall Street Journal. 

Cava declined to comment on its proposed IPO beyond its press release issued Monday.