By Roshan Fernandez

Move over french fries and guacamole. Cava has a side that's part of its secret to success: pita chips.

Business is booming at the Mediterranean fast-casual chain, which is bucking broader sluggishness felt by much of the restaurant industry in recent years. Cava has consistently reported increases in its revenue in recent quarters, and last week notched its fourth-straight quarter of double-digit growth in same-restaurant sales.

Sharon Zackfia, an analyst at William Blair, says one menu staple providing a key assist is pita chips. The add-on, which costs around $3, helps strengthen the chain's margins and increase the average customer's check, which is around $14.50, Cava's chief executive said recently.

Zackfia said it's similar to what Chipotle Mexican Grill has accomplished with guacamole, where roughly half of customers' orders include the add-on, The Wall Street Journal has reported.

"I'm not sure pita chips are at guacamole attachment rates yet, but it is something that I think other fast casual concepts haven't really hit on," Zackfia said, citing other chains' struggles with beverage add-ons. "I think Cava's hit it."

Pita chips have been increasing in popularity, Cava's chief financial officer said in their latest earnings call.

Another benefit: Cava has used pita chips to drive customers to its loyalty program, which can help drive repeat visits.

Garlic ranch pita chips, launched in October, were its highest redeemed loyalty item ever - a promotional deal allowed customers to get them for 200 points instead of the usual 400. Chief Executive Brett Schulman called it an opportunity to influence behavior, create excitement and drive further engagement.

There's room to continue expanding with different flavors, the chain has said, while keeping operations simple. (Schulman said last May that the company automates the cutting of its pita crisps).

In April, the company announced its hot harissa pita chips as a limited-time offering.

"The fun thing about pita chips is you can do them in different flavors for LTOs, and it doesn't add a lot of complexity at all," said Zackfia. "It just adds a little bit more excitement, very low operational stress, and helps them get a higher average ticket."

Cava has run promotions around the pita chip as well. In March, it offered free pita chips to its rewards members on National Pita Day. Schulman said the move helped drive 3.4% growth in sales through the loyalty program during the quarter.

Analysts at Bank of America said in a recent note that Cava's full-year guidance - between 6% and 8% same-store sales growth - is conservative given the success of its hot harissa pita chips and its advertising for National Pita Day, among other factors.

Cava's other premium offerings, such as steak-based items, are holding up very well in the current macroeconomic environment, analysts said. Steak, like pita chips, continues to have high attachment rates, the company's CFO said in their latest earnings call.

Analysts say Cava's success can also be attributed to growth in the suburbs, their position as a category-leader for Mediterranean food and their increased brand awareness in new markets.

Schulman said in 2024 that over 85% of Cava's restaurants were in the suburbs. A recent Placer.ai report showed that Cava has successfully catered to blue collar suburbs and suburban boomers while maintaining its core affluent audience.

The chain still has plenty of space to grow, and is both under-penetrated and faces less competition in the suburbs, TD Cowen analyst Andrew Charles said.

"Cava being more suburban as a brand is definitely an asset," Charles said, pointing to recent struggles of more urban-centric fast-casual chains.

He projects Cava will reach its goal of 1,000 restaurants before its target of 2032, in part because the popularity of the Mediterranean diet adds a "halo effect" around the brand. Cava said it had 382 restaurants at the end of the first quarter.

Write to Roshan Fernandez at roshan.fernandez@wsj.com

(END) Dow Jones Newswires

May 21, 2025 14:48 ET (18:48 GMT)

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