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Anybody following Cava Group?
Posted on 7/12/23 at 11:11 am
Posted on 7/12/23 at 11:11 am
I’m in the DC market where they originally started and they have some huge backers up here, but they did their IPO last week and the stock is on fire right now.
They bought Zoe’s to expand their footprint (Zoe’s went to shite IMO) and I can see them being the next Chipotle for sure. Same type concept and the foods actually really good. Can they scale it and make it profitable long term though?
Has anybody been following them?
They bought Zoe’s to expand their footprint (Zoe’s went to shite IMO) and I can see them being the next Chipotle for sure. Same type concept and the foods actually really good. Can they scale it and make it profitable long term though?
Has anybody been following them?
4
Posted on 7/12/23 at 11:14 am to Im4datigers
I can vouch for their food. Extremely good for on-the-go greek food. 
Posted on 7/12/23 at 11:16 am to Im4datigers
They don’t make any money. Entire model has profitability issues. It’s insanely over valued. Greek chipotle on paper but not in execution.
Will absolutely tank after their first few earning report is my guess.
I’d sell calls on this if I had the time.
I work for a 2,000 unit restaurant chain for what’s it’s worth. As a fry cook but feel like I know a thing or two.
It’s a ways away but Salad and Go is an IPO to watch in the QSR space.
Will absolutely tank after their first few earning report is my guess.
I’d sell calls on this if I had the time.
I work for a 2,000 unit restaurant chain for what’s it’s worth. As a fry cook but feel like I know a thing or two.
It’s a ways away but Salad and Go is an IPO to watch in the QSR space.
This post was edited on 7/12/23 at 11:24 am
Posted on 7/12/23 at 11:34 am to STLhog
quote:
Entire model has profitability issues.
How so?
Posted on 7/12/23 at 11:45 am to LSUcam7
IDK, steve case is a pretty smart guy and he invested over $60mm with them as they started here in DC. They no doubt have some headwinds in scaling, but I'll ride it for a little while as I wish I would have ridden Chipotle but didn't. I think they can ride their coat tails as it's a very similar concept
Posted on 7/12/23 at 11:58 am to LSUcam7
Mass acquisition and conversion of Zoe’s.
Have you seen food costs lately?
Chipotle grew and expanded in an incredible food cost/labor environment and was able to sell at absurdly high profit margins at a “high value” customer proposition selling point. They’ve had to continuously raise prices to maintain SSSs and it’s crushed their traffic numbers.
Cava is entering a very challenging food cost environment. Poultry and beef are both about to cycle up, labor is also still a massive challenge etc. And not saying they can’t do it but a 6 billion dollar market cap for a 100 unit concept is ridiculous. If you can’t see the gap on getting there with a company that lost 20 million in Q1, not sure what to tell you.
Have you seen food costs lately?
Chipotle grew and expanded in an incredible food cost/labor environment and was able to sell at absurdly high profit margins at a “high value” customer proposition selling point. They’ve had to continuously raise prices to maintain SSSs and it’s crushed their traffic numbers.
Cava is entering a very challenging food cost environment. Poultry and beef are both about to cycle up, labor is also still a massive challenge etc. And not saying they can’t do it but a 6 billion dollar market cap for a 100 unit concept is ridiculous. If you can’t see the gap on getting there with a company that lost 20 million in Q1, not sure what to tell you.
This post was edited on 7/12/23 at 12:01 pm
Posted on 7/12/23 at 12:08 pm to STLhog
Yeah the valuation based on the operating assets today is a bit wild.
Great product doesn’t necessarily mean great business, but companies with great products have an easier time solving problems.
All I know is how top notch the product is. IMO the best fast-casual food out there.
Great product doesn’t necessarily mean great business, but companies with great products have an easier time solving problems.
All I know is how top notch the product is. IMO the best fast-casual food out there.
Posted on 7/12/23 at 12:09 pm to STLhog
So a novice investor like me that got in at the high 30’s, would you just set up a stop loss at…..???
Posted on 7/12/23 at 12:16 pm to LSUcam7
Agree its a good product. Just very tough sailing for them going forward.
I know first hand this was a rushed IPO to get some folks paid vs taking on another round of funding and losing a large portion of ownership.
I know first hand this was a rushed IPO to get some folks paid vs taking on another round of funding and losing a large portion of ownership.
Posted on 7/12/23 at 12:20 pm to Im4datigers
quote:
So a novice investor like me that got in at the high 30’s, would you just set up a stop loss at…..???
How long are you willing to hold? I'd take the cash grab right now personally and at least see how their first few earnings calls shake out before getting back in.
Look them up and see how much money they have lost over the last couple of years.
Without franchising and lack of profitability, development is going to get REALLY challenging. They appear to be on a serious cash burn with the IPO being their lost shot at injection.
Lack of all of the above means challenges around marketing, brand awareness, delivery and digital technoloy. None of the aforementioned are cheap and require a ton of resources, both people and software/platform wise.
Again, don't deny its a good product but could see this thing dumping and them getting bought by a large capital rich group like YUM, who has expressed a desire to get into the mediteranean space.
Posted on 7/12/23 at 1:17 pm to STLhog
quote:
How long are you willing to hold? I'd take the cash grab right now personally and at least see how their first few earnings calls shake out before getting back in.
Honestly it’s just a few thousand dollars of play money so there’s more upside than downside for me if that makes any sense at all. I set some stop losses and will just ride it until that triggers and then decide if I want to get back in. If I sold now, I’ve got nothing else I’d get in on at the moment
Posted on 7/13/23 at 8:22 am to Im4datigers
We have a Cava here in kingwood and it’s seldom crowded
Sounds like I need to try it
Zoe’s was trash
Sounds like I need to try it
Zoe’s was trash
Posted on 7/13/23 at 9:55 am to HoustonGumbeauxGuy
quote:
Zoe’s was trash
Zoe’s in Baton Rouge was awesome when they opened. Unfortunately they started messing with the menu too much and all the new stuff they brought on sucked monkey balls.
Posted on 7/13/23 at 1:51 pm to STLhog
quote:
I know first hand this was a rushed IPO to get some folks paid vs taking on another round of funding and losing a large portion of ownership.
This is a well-informed fry cook
Posted on 7/13/23 at 2:55 pm to Lightning
quote:
This is a well-informed fry cook
I mean has Todd Graves entered the money board lol
Posted on 7/13/23 at 8:07 pm to Im4datigers
Don't know about the stock, but the food is pretty weak.
Posted on 7/13/23 at 9:26 pm to Locoguan0
Must have gotten the wrong thing. I love it and haven’t heard too many complain either.
Posted on 7/13/23 at 9:48 pm to Locoguan0
Chipotle is weak as hell too but it’s super compelling due to value, portion, perceived health factor, customizable yet simple.
CAVA will need to reduce some SKUs for sure but it’s a less farty version of chipotle.
Still, the problem is profitability. Big battle to get there and then grow aggressively. 100 units and 1-2M AUVs isn’t shite.
Canes averages like 5M/location. Chick fil a is like 8.
Need a lot of revenue to support those build outs, staffing and store fronts too.
CAVA will need to reduce some SKUs for sure but it’s a less farty version of chipotle.
Still, the problem is profitability. Big battle to get there and then grow aggressively. 100 units and 1-2M AUVs isn’t shite.
Canes averages like 5M/location. Chick fil a is like 8.
Need a lot of revenue to support those build outs, staffing and store fronts too.
Posted on 7/13/23 at 9:50 pm to Im4datigers
That dude is going to be so damn rich when he’s ready.
Already is but at some point, he’s gotta cash out on that generational wealth.
Already is but at some point, he’s gotta cash out on that generational wealth.
Posted on 7/14/23 at 8:11 am to STLhog
quote:
Already is but at some point, he’s gotta cash out on that generational wealth.
He will but unfortunately that’s usually when the brand goes to shite. Everybody like myself, who probably had one of the first 100 boxes on highland road, agrees the quality has slipped since that time, but they have now got the system, culture etc etc down. They just (finally) opened a location here in northern Virginia and it’s crazy that every store is almost identical (all the way around) to each other. No much variation and just a rinse and repeat everywhere.
I’ll say his two key employees over the years is the Director of Marketing/public relations an and the COO.
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