Cava stock jumps in market debut, CEO discusses stock, long term growth, AI, and infrastructure

taking a look at Carver shares nowcurrently trading at about 43 dollars asit started its IPO today open trading at42. that's 91 above its IPO price that'safter making its public debut thismorning after as we mentioned they'reoriginally pricing at 22 a share let'sget to Yahoo finance's Brook De Palma onthe floor of the New York Stock Exchangefor more on this hey Brookegood morning Rochelle I'm here with BradShellman Cava co-founder and CEO I meansuch an exciting day for youcongratulations on the IPO firstbreakdown what this day means for youpersonally and has it surpassed yourexpectations so far yeah thanks Brookethanks for having me it's it's uh it'sbeen an amazing day it's an incrediblevalidation of all the hard work our teamhas put into the business the last 12years to help get us this point and thatthis is the kind of next beginning ofthe next chapter in our journey andright now we're trading at 43 dollars ashare are you concerned that thevaluation here is a bit too high andthat expectations were now way too highfor the company well I told the teamlast night we're not going to focus onthe daily stock price markets go upmarkets go down we're focused on thesame thing we've been since we startedwhich is our long-term vision ofdefining the Mediterranean category andbringing the Mediterranean way tocommunities across the country yeahlet's talk about the way that youstarted back in 2011 you opened up thatfirst fast casual concept I think one ofyour co-founders called it a chef casualconcept word was one of the biggestchallenges that you face to get to thispoint you are right now yeah I like tosay scaling restaurants is hard it's notlike scaling SAS software it takes a lotof great people and great talent and soreally developing our restaurant teamleaders and building our team out toscale this business we focus on ourculture and our mission to bring hearthealth and Humanity to food and when wedo that we get great people on boardthat delivers that great food and greathospitality and help us get to where weare today now Brad I read through yourS1 when do you think that Cabo will turnprofitable so we're focused on ourlong-term growth we've got a tremendousunit economic profit engine we saw in q1alone we we generated 50 million dollarsat the Restaurant level that's comparedto 91 million dollars all of last yearso very healthy margins at theRestaurant level and that's kind of thelifeblood the oxygen of our business andwe've invested in significantinfrastructure over the years whetherthat's our manufacturing infrastructureor digital infrastructure or all the newrestaurantsall the new restaurants we've openedover the last few years and all of thatis now flowing into the business andreally creating great Tailwinds on thatpath yeah let's talk about that growthplan right now you're at 263 plan toopen or have a thousand locations inless than a decade how do you get thereso we get there with the the great teamI talked about the infrastructure Italked about we operate in 22 states inthe District of Columbia today thatmeans there's 26 states in thecontinental U.S we're not operating intoday so there's tremendous growthopportunity within our existingfootprint and all those new markets werenot in like Chicago where we're going toopen next year and start our entry intothe Midwest now speaking of Chicago oneof your competitors speaking is open upan automation inside they're usingrobots we've also heard from Wendy'sfrom McDonald's using voice orderingtechnology can we expect Cava to have aiand automation the future restaurantdesign well we think there's a lot ofopportunity within AI specifically whenyou think about predictive laborscheduling predictive ordering prep thatcan really do the trick of making iteasier for our team members to run agreat Kava and deliver that great foodand that great Hospitality that's whenuh when things are are working well forus and you're investing heavily indigital I believe more than 50 growth indigital sales last yearhow does that customer change in termsof how much they're purchasing and justhow much potential there is in a digitalconsumer yeah we do see a 27 highercheck average in the digital channel butwill you try to do is create basically amulti-channel platform where you canchoose the channel you want to engagewith us on because if it's an urbanconsumer or a Suburban consumer a youngsingle or a family that needs state maybe very different so we want tobasically put the control in your handsto say I want to engage and I want todigital order and pick up off the shelvaCabot where I want to come in with myfamily and sit down the dining room andeat a meal or I want to come in my carand pick up my order out of one of ourdrive-through pickup Lanes which we nowhave 20 of them growing right and inaddition to that right now inflation isthe name of the game especially when itcomes to Not Just A Kava and your foodproducts but also when it comes toAmerican consumers choosing wherethey're going to go what sort ofcustomer do you attract and how do youget maybe that McDonald's customerthat's looking for Value to try out kavawell there's two things uh Brookethere's the fact that our food has anincredibly broad appeal and diverseappeal when you look at our gender mix55 female uh 45 male great generationalmix and great income mix you know we'reable to compete down income bracketsbecause of our value proposition and onething we did to lean into that valueproposition I talked about thatinfrastructure we've invested in overthe years that now allows us to reallyleverage into in the business and nothave to raise price as much as maybesome of our peers have so last year lessthan five percent in Restaurant pricingeven as we expanded restaurant levelmargins so really trying to put our bestfoot forward to our guests and make surewe can invite everyone to our table andcan customers expect another priceincrease to happen later on this year orperhaps next year we have no plannedprice increases for the remainder of theyear and in addition to that I meanwe're also seeing sort of companies goin terms of drive-through Conceptsengage with customers in a different waywhen you think about your future storefootprinting you think about the size ofthat of course that's a bigger footprintdoes it come to higher costs and are youworried about that yeah we have seensome developmental inflationary coststhe last few years but that's embeddedin our model we have a core format thatwe create derivations of again to meetthe needs of the guests in that specifictrade area whether it's one of ourdrive-through Lanes whether it's a unithere in Manhattan that has no seats inthe dining room and multiple digitalorder make lines or a restaurant in thesuburb that has 80 seats in therestaurant right and lastly cpg issomething that you guys started with youhad your dips and your spreads availableat 650 locations including Whole Foodshow big is that business today and doyou plan to scale in after this IPS yeahit's a very small piece of the businesstoday a lot of our manufacturingcapacity goes to support the growth ofour restaurants but there is that optionin the future that if we think thatthere's opportunity there to lean intoit and we have the bandwidth as anorganization we have a lot ofrestaurants open that's that's there forus to go after in the long term andBrett I have to ask is roasted redpepper hummus and crazy fat still yourgo-to sides you got to get a scoop ofcrazy fed up no matter what bowl youorder at Cava oh wonderful wonderfulbecause my favorite tail fried gentlemancalled the co-founder and CEO thank youso much back to you Rochelle thanks broall right a big thank you to our veryown Brook Department there who wasjoined there by Carver CEO Brett Shulmanon the floor of the New York StockExchange thank you to you both