The logo of Chipotle Mexican Grill is seen in Manhattan, New York.
Shannon Stapleton | reuters
Chipotle Mexican Grill Quarterly earnings and revenue on Wednesday beat analysts’ expectations, driven by higher traffic at its restaurants.
The stock rose 4% in extended trading.
Here’s how the company reported compared to Wall Street’s expectations, based on a survey of LSEG analysts:
- earnings per share: $13.37 adjusted vs. $11.68 expected
- Income: $2.7 billion vs. $2.68 billion expected
Chipotle reported first-quarter net income of $359.3 million, or $13.01 per share, up from $291.6 million, or $10.50 per share, a year earlier.
Excluding a 36 percent loss from a surge in its legal reserves, the burrito chain earned $13.37 per share.
gross sales Soared 14.1% to $2.7 billion.
The company’s same-store sales rose 7%, beating StreetAccount’s estimate of 5.2%. Chipotle said traffic has increased 5.4% compared to last year, while the average check is up only 1.6%.
In february, Chief Financial Officer Jack Hartung told analysts that “unusual cold weather” impacted January sales. But demand picked up again in the rest of the quarter to compensate for the sluggishness of the first month.
Chipotle has become the rare restaurant chain to report increasing transactions despite higher menu prices. Citing inflation, the company once again increased its prices in October. Others in the restaurant industry have turned to limited-time offers and deals to attract customers, especially those with lower incomes.
CEO Brian Niccol said the company saw an increase in traffic across various income groups during the quarter. He credited the chain’s value perception among diners. Earlier, officials had also emphasized that most of its customers come from the high income group.
Earlier this month, Chipotle raised prices in California by nearly 7% to compensate for the state’s higher prices minimum wage for fast-food workers, but the company doesn’t plan any more raises, Niccol said on CNBC “closing bell” on Wednesday.
Chipotle is also focusing on making its burritos and bowls more quickly, improving an industry metric called throughput. Nicol said throughput reached its highest level in four years during the first quarter.
The chain added 47 new locations to its footprint during the first quarter, moving closer to its long-term goal of doubling its total restaurant count to reach 7,000 stores.
For the full year, Chipotle now estimates same-store sales will grow by a mid-to-high single-digit percentage, up from the previous range of mid-single-digit growth. The company reiterated its forecast of 285 to 315 new locations in 2024.
In March, Chipotle’s board approved a 50-for-1 stock split, one of the largest in New York Stock Exchange history. The company is seeking shareholder approval at its annual meeting on June 6. If investors vote “yes”, the stock will begin trading on a post-split basis on June 26.