The Habit aims to beef up sales with IPO filing
Goleta-grown fast-casual burger chain The Habit readies to go public. The company, now based in Irvine, has seen 34 percent revenue growth over the past three years. (Courtesy photo)
The Habit Restaurant, parent company of The Habit Burger Grill, filed yesterday to take the company public with an earnings goal of just over $86 million.
The move comes just a few short months after rumors started swirling in August that the fast-casual burger chain was considering an IPO. Founded in Goleta in 1969, the concept’s focus on quality food attracted national attention — earlier this summer, Consumer Reports snubbed brands such as In-N-Out Burger and Shake Shack when it named The Habit’s burger the best in America.
It isn’t known how many shares the company plans to sell, or on which exchange its stock will be listed, though it intends to use the ticker symbol HABT.
In 2007, founding brothers Brent and Bruce Reichard sold a majority stake in the company to KarpReilly, a private-equity firm based in Connecticut that brought in industry veteran Russ Bendel as chief executive and moved the headquarters to Irvine.
The Habit has since grown to 98 locations in 10 markets and four states, up from 26 locations location in just three California markets in 2009, according to its filing with the U.S. Securities and Exchange Commission.
The company expects to open 23 to 25 restaurants before the end of fiscal 2014, and another 26 to 28 units next year. Habit landed on the East Coast in New Jersey in August and company officials project that domestically the chain could reach 2,000 locations. While growth is primarily expected to come from company-owned locations, Habit started a franchise program last year and expects the first franchised location to open in 2015, the company said.
Habit has had 42 consecutive quarters of positive same-store sales growth, primarily due to increases in traffic and second quarter same-store sales rose 6.1 percent year to date, following a 3.6-percent increase in same-store sales for fiscal year 2013, according to the company. Additionally, company-owned restaurant average unit volumes increased from about $1.2 million in 2009 to about $1.7 million as of July, according to SEC documents, a nearly 34 percent increase.
The filing also shows that net income increased from $0.1 million to $5.7 million, and revenue rose from $28.1 million to $120.4 million between 2009 and 2013. With prices relatively cheaper than similar burger slingers, Habit holds it’s average bill at $7.44, putting it under the industry average of $8 to $12.
