A Chipotle restaurant and signage is seen on February 09, 2022 in Miami, Florida.
Joe Rydle | Getty Images
Chipotle Mexican Grill reported weaker-than-expected quarterly earnings and revenue on Tuesday, signaling that its price hikes may finally alienate customers.
In October, CEO Brian Niccol said the company saw “minimal resistance” to higher prices for its burrito bowls and tacos, although transactions declined 1% during the third quarter.
Shares of Chipotle fell more than 5% in extended trading.
Here’s what the company reported for the fourth quarter that beat Wall Street’s expectation, based on a survey of analysts by Refinitiv:
- earnings per share: $8.29 adjusted vs $8.90 expected
- Income: $2.18 billion vs. $2.23 billion expected
It’s the first time since Chipotle’s third-quarter report in 2017 that the company fell short of Wall Street’s estimates for both its quarterly earnings and revenue, according to data from Refinitiv.
The burrito chain reported fourth-quarter net income of $223.7 million, or $8.02 per share, up from $133.5 million, or $4.69 per share, a year earlier. Higher menu prices helped offset rising food costs as the company paid more for dairy and tortillas during the period ended Dec. 31.
Excluding certain legal expenses, corporate restructuring costs and other items, Chipotle earned $8.29 per share.
gross sales For the fourth quarter climbed 11.2% to $2.18 billion. The company’s same-store sales grew just 5.6%, below StreetAccount’s estimate of 6.9% and underperforming Chipotle’s own forecast. from the end of october,
The company said it is forecasting same-store sales growth in the high single digits for the first quarter of 2023, based on low double-digit same-store sales growth in January. Wall Street was projecting same-store sales growth of 6.7% in the first quarter, according to StreetAccount estimates.
A year ago, the company was battling a wave of Covid infections that led to reduced hours or temporary closures at some locations due to sick employees.
Last month, Chipotle said it was looking to hire 15,000 employees Until this spring, well past its busiest time of year.
The company plans to open between 255 and 285 new locations this year, including relocating 10 to 15 restaurants to add drive-thru lanes.
read full Chipotle Earnings Report Here.