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Beset by worries Major U.S. indexes tumbled, weighed down by losses in financial stocks and worries over China’s faltering economy. Asia-Pacific markets followed Wall Street and fell Wednesday. Most regional indexes lost at least 1%. A silver lining: Japanese business’ sentiment climbed in July, alongside the country’s stronger-than-expected economic growth.
Potential banking downgrade Fitch Ratings warned it may downgrade the U.S. banking industry’s credit rating from AA- to A+. Since individual banks cannot be rated higher than the industry, major banks like JPMorgan Chase and Bank of America would be cut to an A+ rating — with a trickle-down effect for smaller banks — if the downgrades happens. Fitch’s warning comes as Moody’s downgraded 10 banks last week.
Higher risk of corporate defaults There’s a higher chance corporate debt in emerging markets might default, according to JPMorgan. The bank raised its forecast for high-yield defaults in Asia from 4.1% to 10% — but that figure drops to just 1% if China property is excluded. That’s a sign of how severe the contagion risk is if Country Garden, the beleaguered Chinese property developer, defaults.
U.S. consumer strong as ever U.S. consumer spending in July remained healthy, according to data from the Commerce Department. Seasonally adjusted retail sales rose 0.7% for the month; economists were expecting 0.4%. Excluding autos, sales rose 1% against a 0.4% forecast. Both figures were the best monthly gains since January, reinforcing sentiment that the consumer can continue supporting economic growth.
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After Fitch warned that it might downgrade the banking industry’s credit rating, shares of big U.S. banks fell. Bank of America lost 3.2%, JPMorgan declined 2.55% and Wells Fargo slid 2.31%.
Regional banks weren’t spared the slaughter, either. The SPDR S&P Regional Banking ETF fell 3.33% after Minneapolis Federal Reserve President Neel Kashkari spoke in favor of “significantly further” capital requirements for banks with more than $100 billion in assets. Kashkari also emphasized that if inflation rebounds, rates might have to go higher and “pressures [in regional banks] could flare up again.”
But not everyone’s worried about Fitch’s warning. “The U.S. bank system is overall sound,” said Eric Diton, president and managing director at The Wealth Alliance.
“All Fitch was saying was: ‘If we did downgrade the sector again, that would lead us to have to downgrade a lot of the individual banks,’” Diton said. “Maybe they will, maybe they won’t.”
Banking doldrums aside, there were two bright spots in the initial public offering arena. Shares of VinFast, a Vietnamese electric vehicle company, surged from $10 per share to $22 in its debut on the Nasdaq; prices continued rising throughout the day to close at $37.
Meanwhile, Cava shares jumped 9.44% in extended trading after its first earnings report since its IPO in June. Taken together, they suggest that the IPO market is returning to health.
Still, major indexes couldn’t shrug off worries over banks and China. The S&P 500 slipped 1.16%, ending the day below its 50-day moving average for the first time since March — possibly heralding the start of a continued slide. The Dow Jones Industrial Average lost 1.02%, breaking its three-day winning streak. The Nasdaq Composite fell 1.14%.
If indexes continue sliding, that’d be their third consecutive losing week. Investors are hoping it’s a brief summer spell, a moment of correction that will end as the weather turns.
The stock of Mediterranean-style fast-casual restaurant chain Cava Group Inc. soared 11% Monday, after analysts initiated coverage on the stock which made its debut on public markets in mid-June with a flurry of buy ratings.
At least four of the banks that were underwriters on the initial public offering — JP Morgan, Stifel, William Blair and Jefferies — assigned the stock a buy rating or the equivalent.
FactSet shows one bank has a hold rating but it’s a restricted listing so it’s not clear who it’s from.
The company CAVA, +8.04%
raised $317 million in its initial public offering, which priced above its proposed range at $22 a share and immediately rallied on opening. The company issued 14.4 million shares at a valuation of $2.45 billion. The stock was last trading at $43.83.
The company is not profitable and has high cash burn and just $23 million in cash and cash equivalents on its balance sheet, according to its IPO filing documents.
But analysts were unfazed, with William Blair analysts calling it a clear leader in a fast-growing category with proven geographic appeal.
“CAVA has hit upon a winning formula with its customizable menu of bowls and pitas featuring bold Mediterranean flavors that can fit in any dietary preference,” wrote analysts led by Sharon Zackfia.
“CAVA’s customer appeal is evident in average unit volumes (AUVs) of roughly $2.5 million and a 44% five-year revenue CAGR through 2022.”
The company accelerated its growth with the 2018 acquisition of Zoës Kitchen, “which provided immediate access to attractive real estate in new markets while enabling capital-efficient densification in top-tier trade areas (Zoës conversions roughly half the cost of a typical greenfield CAVA),” they wrote.
That has set the company up to end 2023 with roughly triple the number of locations as it had in 2020.
William Blair estimates that there’s room for at least 1,200 domestic Cava restaurants based on the population per restaurant already achieved in Virginia, where it’s still adding locations.
That supports management’s target of 1,000-plus locations by 2032.
“We also see the potential for digital drive-thrus to further lengthen CAVA’s growth runway while lifting AUVs (and potentially returns), with about one-third of this year’s new units having drive-thrus, ramping up to about half in 2024 (versus roughly 20 drive-thrus today),” they wrote. William Blair initiated coverage with an outperform rating.
JP Morgan launched coverage with an overweight rating and a December 2024 $45 stock price target. Analysts cheered the entrepreneurial sprit of Founder and CEO Brett Schulman with help from Chairman Ron Shaich, the founder of Panera Bread.
“In-store design/operational procedures and back-end support for the network allows CAVA to be efficient, safe and consistent as the brand leverages these systems for its goal national brand penetration,” they wrote in a note to clients.
Mediterranean cuisine covers many types of food and occasions, so the end-market is large, topping out at more than $1 trillion in U.S. sales.
While bowl builds priced at $10.95 to $16.95 will likely limit a high frequency of lower-income consumers, “we believe the brand has an enduring appeal to a very broad customer base for at least occasional usage.”
And suburbs are 82% of the site mix and are expected to remain a key location base, they added.
Stifel and Jefferies analysts initiated coverage with a buy rating and $48 price target. Stifel analysts led by Chris O’Cull also cheered the wide appeal of the food and compelling unit-level returns and highlighted the company’s healthy balance sheet.
“The company is in strong financial condition with no funded debt and roughly $340M in cash on hand following the company’s IPO,” they wrote in a note to clients. “We project the company’s average quarterly cash balance will remain above $200M with no funded debt for the foreseeable future. We project positive annual free cash flow starting in 2026.”
Still, not everyone is convinced the company is a buy. David Trainer, chief executive of New Constructs, an independent equity research firm that uses machine learning and natural-language processing to parse corporate filings and model economic earnings, published a series of critical reports before the IPO.
Trainer questioned Cava’s ability to reach profitability and its high valuation. He even compared it to WeWork WE, +5.80%,
the infamous startup created by Israeli entrepreneur Adam Neumann, that at its peak was valued at $47 billion, but is now trading at just 26 cents a share, or a market cap of $521 million.
The Renaissance IPO ETF IPO, +0.52%
has gained 32% in the year to date, while the S&P 500 SPX, -0.07%
has gained 15%.
IPO investors, much like retail shoppers in recent years’ inflationary environment, are demanding clear discounts and demonstrating sensitivity to price and valuations, according to Renaissance Capital.
The provider of IPO exchange-traded funds and institutional research said that’s a positive — even if tech unicorns in the pipeline would prefer it were not the case.
“Quality consumer names are working,” said Matthew Kennedy, senior strategist at Renaissance, listing Kenvue, Cava Group Inc., Gen Restaurant Group Inc. and Savers Value Village Inc. as examples of recent new issues that enjoyed strong debuts.
Kenvue KVUE, +1.65%,
the former consumer arm of Johnson & Johnson JNJ, +0.87%
and parent of household-name products such as Tylenol and Band-Aid, raised $3.8 billion in its May IPO at a valuation of $41.08 billion, making it the biggest deal of the year to date.
Cava Group CAVA, -5.93%,
the loss-making Mediterranean-style fast-casual restaurant group, raised $317 million in its mid-June deal at a valuation of $2.5 billion. The stock popped more than 99% on its first day of trade.
“But broadly investors are still demanding clear discounts to public peers, especially if they take issue with certain aspects of a deal. So it’s good to see that valuation sensitivity,” said Kennedy.
Savers Value Village SVV, +3.45%
went public Thursday with some fanfare, closing 27% above its $18 issue price. The company is the biggest for-profit thrift-store chain in North America, with 317 stores that operate under multiple names.
The company is profitable, with net income of $11.9 million in the quarter through April 2, after a loss of $10.2 million in the same period a year earlier. For all of 2022, it had net income of $84.7 million, up from $83.4 million in 2021.
Revenue for the quarter came to $327.5 million, down from $345.7 million in the year-ago period. Revenue totaled $1.4 billion for 2022, up from $1.2 billion in 2021.
Two other deals that made their debut on Thursday fared less well, however.
Texas-based Kodiak Gas Services Inc. KGS, +3.44%
and Fidelis Insurance Holdings Ltd. closed lower after pricing below their estimated ranges and making other accommodations to get their deals through.
Bermuda-based Fidelis, a reinsurer, downsized its deal to 15 million shares from a previous expectation that it would offer 17 million. The initial public offering was priced at $14 a share, below the proposed $16-to-$19 range.
Maker of oil- and gas-production equipment Kodiak opened almost 3% below its issue price of $16, which was well below its proposed price range of $19 to $22.
Fidelis has an unusual structure, in that it uses a third party for origination, underwriting and claims management, said Kennedy.
“We think insurance investors wanted a discount for a company that didn’t own the underwriting group,” he said. “It has an experienced management team, though, so now they’ll just need to execute.”
Kodiak, meanwhile, carries substantial debt and will need to undertake significant capital spendig in the coming years, just as gas prices have fallen back.
It’s also worth noting that the last big oil and gas IPO, Atlas, “is slightly below its offer price,” Kennedy said.
Still, Renaissance is expecting a gradual reopening of the IPO market in the second half, said Kennedy, who noted that the IPO ETF IPO, +1.38%
has gained about 30% in to date in 2023, outperforming the S&P 500’s SPX, +1.23%
14% gain.
To date, there have been 52 IPOs this year, up 33% from the same time last year, when the market was effectively frozen. Almost $9 billion in proceeds have been raised, up 115% from last year but well below levels seen in frothier times.
Car-sharing service Turo filed its IPO prospectus in January 2022. A month earlier, Reddit said it submitted a draft registration for a public offering. Instacart’s confidential paperwork was filed in May of last year.
None of them have hit the market yet.
Despite a bloated pipeline of companies waiting to go public and a rebound in tech stocks that pushed the Nasdaq up 30% in the first half of 2023, the IPO drought continues. There hasn’t been a notable venture-backed tech initial public offering in the U.S. since December 2021, when software vendor HashiCorp debuted on the Nasdaq.
Across all industries, only 10 companies raised $100 million or more in U.S. initial share sales in the first six months of the year, according to FactSet. During the same stretch in 2021, there were 517 such transactions, highlighted by billion-dollar-plus IPOs from companies including dating site Bumble, online lender Affirm, and software developers UiPath and SentinelOne.
As the second half of 2023 gets underway, investors and bankers aren’t expecting much champagne popping for the rest of the year.
Many once high-flying companies are still hanging onto their old valuations, failing to reconcile with a new reality after a brutal 2022. Additionally, muted economic growth has led businesses and consumers to cut costs and delay software purchases, which is making it particularly difficult for companies to comfortably forecast the next couple of quarters. Wall Street likes predictability.
So if you’re waiting on a splashy debut from design software maker Canva, ticket site StubHub or data management company Databricks, be patient.
“There’s a disconnect between valuations in 2021 and valuations today, and that’s a hard pill to swallow,” said Lise Buyer, founder of IPO consultancy Class V Group in Portola Valley, California. “There will be incremental activity after a period of absolute radio silence but it isn’t like companies are racing to get out the door.”
The public markets tell an uneven story. This year’s rally has brought the Nasdaq to within 15% of its record from late 2021, while an index of cloud stocks is still off by roughly 50%.
Some signs of optimism popped up this month as Mediterranean restaurant chain Cava went public on the New York Stock Exchange. The stock more than doubled on its first day of trading, indicating high demand from retail investors. Buyer noted that institutions were also enthused about the deal.
Last Friday, Israeli beauty and tech company Oddity, which runs the Il Makiage and Spoiled Child brands, filed to go public on the Nasdaq.
That all comes after a big month for secondary offerings. According to data from Goldman Sachs, May was the busiest month for public stock sales since November 2021, driven by a jump in follow-on deals.
While investors are craving new names, they’re much more discerning when it comes to technology than they were at the tail end of the decade-long bull market.
Mega-cap stocks Apple and Nvidia have seen outsized gains this year and are back to trading near all-time highs, boosting the Nasdaq because of their hefty weightings in the index. But the advances are not evenly spread across the industry.
In particular, investors who bet on less mature businesses are still hurting. The companies that held the seven-biggest tech IPOs in the U.S. in 2021 have lost at least 40% of their value since their debut. Coinbase, which went public through a direct listing, is down more than 80%.
That year’s IPO class featured high-growth businesses with even higher cash burn, an equation that worked fine until recession concerns and rising interest rates pushed investors into assets better positioned to withstand an economic slowdown and increased capital costs.
Employees of Coinbase Global Inc, the biggest U.S. cryptocurrency exchange, watch as their listing is displayed on the Nasdaq MarketSite jumbotron at Times Square in New York, April 14, 2021.
Shannon Stapleton | Reuters
Bankers and investors tell CNBC that optimism is picking up, but ongoing economic concerns and the valuation overhang from the pre-2022 era set the stage for a quiet second half for tech IPOs.
One added challenge is that fixed income alternatives are back. Following a lengthy stretch of near-zero interest rates, the Federal Reserve this year lifted its target rate to between 5% and 5.25%. Parking money in short-term Treasurys, certificates of deposit and high-yield savings offerings can now generate annual returns of 5% or more.
“Interest rates are not only about the cost of financing, but also getting investors to trade out of 5% risk-free returns,” said Jake Dollarhide, CEO of Longbow Asset Management. “You can make 15%-20% in the stock market but lose 15%-20%.”
Dollarhide, whose firm has invested in milestone tech offerings like Google and Facebook, says IPOs are important. They offer more opportunities for money managers, and they generate profits for the tech ecosystem that help fund the next generation of innovative companies.
But he understands why there’s skepticism about the window reopening. Perhaps the biggest recent bust in tech investing followed the boom in special purpose acquisition companies (SPACs), which brought scores of less mature companies to the public market through reverse mergers.
“It seems the foul odor of failure from the 2021 SPAC craze has spoiled the appetite from investors seeking IPOs,” Dollarhide said. “I think that’s done some harm to the traditional IPO market.”
Private markets have felt the impact. Venture funding slowed dramatically last year from record levels and has stayed relatively suppressed, outside of the red-hot area of artificial intelligence. Companies have been forced to cut staff and close offices in order to preserve cash and right-size their business
Pre-IPO companies like Stripe, Canva and Klarna have taken huge hits to their valuations, either through internal measures or markdowns from outside investors.
Few have been hit as hard as Instacart, which has repeatedly slashed its valuation, from a peak of $39 billion to as low as $10 billion in late 2022. Last year, the company confidentially registered for an IPO, but still hasn’t filed publicly and doesn’t have immediate plans to do so.
Similarly, Reddit said in December 2021 that it had confidentially submitted a draft registration statement to go public. That was before the online ad market took a dive, with Facebook suffering through three straight quarters of declining revenue and Google’s ad sales also slipping.
Now Reddit is in the midst of a business model shift, moving its focus beyond ads and toward generating revenue from third-party developers for the use of its data. But that change sparked a protest this month across a wide swath of Reddit’s most popular communities, leaving the company with plenty to sort through before it can sell itself to the public.
A Reddit spokesperson declined to comment.
Turo was so close to an IPO that it went beyond a confidential filing and published its full S-1 registration statement in January 2022. When stocks sold off, the offering was indefinitely delayed. To avoid withdrawing its filing, the company has to continue updating its quarterly results.
Like Instacart, Turo operates in the sharing economy, a dark spot for investors last year. Airbnb, Uber and DoorDash have all bounced back in 2023, but they’ve also instituted significant job cuts. Turo has gone in the opposite direction, more than doubling its full-time head count to 868 at the end of March from 429 at the time of its original IPO filing in 2021, according to its latest filing. The company reportedly laid off about 30% of its staff in 2020, during the Covid pandemic.
Turo and Instacart could still go public by year-end if market conditions continue to improve, according to sources familiar with the companies who asked not to be named because they weren’t authorized to speak publicly on the matter.
Byron Deeter, a cloud software investor at Bessemer Venture Partners, doesn’t expect any notable activity this year, and says the next crop of companies to debut will most likely wait until after showing their first-quarter results in 2024.
“The companies that were on file or were considering going out a little over a year ago, they’ve pulled, stopped updating, and overwhelmingly have no plans to refile this calendar year,” said Deeter, whose investments include Twilio and HashiCorp. “We’re 10 months from the real activity picking up,” Deeter said, adding that uncertainty around next year’s presidential election could lead to further delays.
In the absence of IPOs, startups have to consider the fate of their employees, many of whom have a large amount of their net worth tied up in their company’s equity, and have been waiting years for a chance to sell some of it.
Stripe addressed the issue in March, announcing that investors would buy $6.5 billion worth of employee shares. The move lowered the payment company’s valuation to about $50 billion from a high of $95 billion. Deeter said many late-stage companies are looking at similar transactions, which typically involve allowing employees to sell around 20% of their vested stock.
He said his inbox fills up daily with brokers trying to “schlep little blocks of shares” from employees at late-stage startups.
“The Stripe problem is real and the general liquidity problem is real,” Deeter said. “Employees are agitating for some path to liquidity. With the public market still pretty closed, they’re asking for alternatives.”
G Squared is one of the venture firms active in buying up employee equity. Larry Aschebrook, the firm’s founder, said about 60% of G Squared’s capital goes to secondary purchases, helping companies provide some level of liquidity to staffers.
Aschebrook said in an interview that transactions started to pick up in the second quarter of last year and continued to increase to the point where “now it’s overwhelming.” Companies and their employees have gotten more realistic about the market reset, so significant chunks of equity can now be purchased for 50% to 70% below valuations from 2021 financing rounds, he said.
Because of nondisclosure agreements, Aschebrook said he couldn’t name any private company shares he’s purchased of late, but he said his firm previously bought pre-IPO secondary stock in Pinterest, Coursera, Spotify and Airbnb.
“Right now there’s a significant need for that release of pressure,” Aschebrook said. “We’re assisting companies with elongating their private lifecycle and solving problems presented by staying private longer.”
The two main issues for a revival in initial public offerings are 1) a strong market, and 2) stable interest rates. With the S & P 500 set to trade down for a fourth straight day on Thursday, investors are watching to see if the recent rally in the S & P 500 is sustainable. Meanwhile, short-term Treasury yields have been trading at the high end of their recent range and are being careful watched. Three companies announced they would go public at the NYSE next week, all in the significant $300 million range: Fidelis Insurance , a global provider of specialty insurance and property reinsurance, plans to offer 17 million shares at $16 to $19. At the midpoint this would raise $298 million, with a fully diluted market value of $2.1 billion, according to Renaissance Capital. Kodiak Gas Services , which provides natural gas compression services in the U.S., plans to offer 16 million shares at a price range of $19 to $22. At the midpoint of the proposed range, that would raise $328 million with a market value of $1.5 billion. Savers Value Village , the largest for-profit thrift store operator in the U.S. and Canada, plans to offer 18.8 million shares at $15-$17. At the midpoint this would raise $301 million, with a fully diluted market value of $2.8 billion. While all three are in niche spaces (reinsurance, natural gas, and retail), the fact that all are in the $300 million range, and all are coming in the same week, is significant. It means nearly $1 billion will be raised by IPOs next week. That has not happened in a long time, Matt Kennedy from Renaissance Capital told me. “In the last year and a half, there’s only one other week where more than $100 million was raised by three companies,” he told me. “The IPO market is definitely opening up,” he said. Goldman Sachs’ David Kostin has also noted an improved IPO market. In a note to clients on June 13, just before the Cava IPO , Kostin noted that an IPO Barometer Goldman uses to gauge IPO sentiment had been improving dramatically, spurred on by stabilization in equity prices, an improvement in CEO confidence, a peak in front-end rates and the expected end of the Fed rate hiking cycle. Where are the unicorns? The big issue now is, what about the larger players that have been potential IPO candidates for a long time, such as Fogo de Chao, Panera Bread, Reddit, Instacart, Stripe, Impossible Foods, Fanatics, StubHub and Klarna? Chip designer ARM is already in talks with clients about being early-stage investors in its IPO, but investors say many so-called unicorns are still unsure whether now is the right time to jump in. “The volatility has come out of the market, so those companies who have been in our pipeline, some of which have been in our pipeline for more than 18 months, if not longer, are starting to have conversations with us,” NYSE President Lynn Martin said in an interview on CNBC last week. That’s a hopeful sign, as was the Cava IPO. “What Cava showed to me is that there is risk capital out there, there are investors out there if the metrics are right,” Santosh Rao, head of research at Manhattan Venture Partners told me. Still, those larger companies need strong signals that the coast is clear. “There are still some dark clouds hovering,” Rao told me. “We don’t know if there is going to be a recession, how many more rate hikes there will be. They need a clearer sign.” “I am expecting IPO activity/filings to pick up in 4Q,” he told me. “Until then I expect to see small, niche, non-tech companies such as these four to float their IPOs, not unlike previous years when conditions were similar.” Next-day IPO curse Fast food restaurant chain Cava went public last week with a bang, pricing at $22, opening at $42, and closing at $43.51 on the first day. The good news: the strong initial pricing was a positive signal to other potential IPO candidates. The bad news: the stock dropped the day after the IPO to roughly $38 and has remained in that range. Call it the “first-day IPO curse,” the tendency of IPOs to trade up on the first day, then lower the following day and often for months after. IPOs: first day curse (Since 2018) Average first day pop: + 25% Post-first day: – 26% Source: Renaissance Capital This happens because initial excitement over the IPO tends to drive prices higher on the first day, in a classic example of herd behavior. It’s a well-studied phenomenon, and the source of great frustration among retail investors, most of whom are buying on that first day. Still, with Cava still trading well above its initial price of $22, those big institutional funds that got initial allocations are sitting on very large profits for their clients.
CNBC’s Jim Cramer on Friday said he feels the Federal Reserve needs to be transparent with its plans, especially in the wake of restaurant chain Cava‘s highly successful IPO, which he believes is a sign the market is heating up.
Cramer thinks a prosperous IPO market could lead to an influx of money on Wall Street and a hiring frenzy, the last thing the Fed wants when it’s trying to cool off the economy.
“The Fed needs to stop being so broad and opaque; what we need from them is narrow transparency,” he said. “Otherwise, the animal spirits will kick in again and companies will start going on a hiring binge, which is the last thing the Fed wants.”
He acknowledges that some may argue the economy is cooling on its own. Grocery giant Kroger just reported food costs coming down across the board, and Cramer said he is seeing figures that suggest used car and clothing costs are also declining.
However, according to Cramer, there is one major issue: housing. Cramer believes the Fed must provide a game plan of how it plans to bring the housing market down. He said he thinks the Fed’s ultimate plan is to increase unemployment so many young people move in with their parents, as is historically the case when unemployment is rampant.
But he called this plan “convoluted and, frankly, heartless,” and even though the central bank does not control long-term interest rates, he thinks there is another way to bring housing prices down.
“To me, the best thing the Fed can do is to figure out, maybe, a strategy where there’s more homebuilding and more apartment building. The only way to do that, though, is to stop scaring people who work, stop scaring the builders,” he said. “We’ve got a massive shortage of homes in this country, but who the heck would ever build more if they think the Fed wants to crush the whole economy once those homes and apartments are up?”
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Cava Group, the Mediterranean-focused fast-casual restaurant chain that’s making its trading debut on Thursday, is confident it has access to enough funding to expand its business and make a profit, according to Chief Financial Officer Tricia Tolivar.
But Tolivar declined to provide a timeline to profitability in an interview with MarketWatch.
The Cava logo is displayed at a Cava location in Pasadena, California, Feb. 6, 2023.
Mario Tama | Getty Images News | Getty Images
Mediterranean fast-casual restaurant chain Cava priced its initial public offering at $22 per share, above a previously stated range, the company said Wednesday.
Cava said it sold 14.4 million shares, which at a price of $22 per share, raises nearly $318 million. The company on Monday raised its pricing expectations to a range of $19 to $20 per share.
At $22 per share, the company is valued at roughly $2.45 billion, based on an outstanding share count of more than 111 million shares.
Shares are expected to debut on the public markets Thursday and trade under the stock symbol CAVA.
Cava, founded in 2006, opened its first location in 2011 and now operates more than 260 restaurants. It has drawn frequent comparison to Chipotle Mexican Grill for its build-your-own-entree style of dining.
Last year, Cava reported net sales of $564.1 million, up 12.8% from the year prior. However, its reported net loss was $59 million, wider than a net loss of $37.1 million in 2021.
— CNBC’s Amelia Lucas contributed to this report.
Correction: Cava raised its pricing expectations for its initial public offering Monday. An earlier version of this story misstated the day.
