Three Restaurant Groups Consider IPOs in First Half of 2023

Three restaurant groups are reportedly considering initial public offerings (IPOs).

Cava Group said in a Monday (Feb. 6) press release that it has confidentially submitted a draft registration statement relating to a proposed IPO to the Securities and Exchange Commission (SEC).

Two other restaurant groups — Fogo Hospitality and Panera Brands — are aiming to offer IPOs of their own within the next few months, the Wall Street Journal (WSJ) reported Monday, citing unnamed sources.

Fogo Hospitality and Panera Brands did not immediately reply to PYMNTS’ request for comment.

Cava Group said in its press release: “The total number of shares to be offered and the price range for the proposed offering have not yet been determined. The offering is subject to market and other conditions and the completion of the SEC’s review process.”

All three companies are watching to see if the markets improve and, like all restaurants, have gained stature in the eyes of investors as the sector has recorded moderate growth and profitability — and that’s something investors are looking for after having seen unprofitable companies lose value over the last year, according to the WSJ report.

In addition, after having been tested by the pandemic, restaurants have lowered their costs and raised their margins—something else that’s appealing to investors—and chains have benefited from the closure of many independent competitors, the report said.

Sales data from the U.S. Census Bureau showed that while restaurant and bar sales were down 0.9% month over month in December — possibly as a result of holiday season at-home gatherings — they were up 16.7% year over year.

That figure was well above the 8.3% year-over-year inflation rate for the category, according to the Census Bureau report.

Panera Brands considered but passed on an IPO last year. The fast-casual group had planned a partnership with a special purpose acquisition company (SPAC) to go public via IPO after 2021 saw restaurants and other food and beverage (F&B) businesses go public.

However, in July 2022, the firm ended those plans, citing a deterioration in the market for IPOs.

“Unfortunately, the deterioration of capital market conditions over the last several months has led to the realization that an IPO may not be imminent, and as a result we felt it was appropriate not to extend our planned partnership,” Panera Brands said at the time.