Chipotle Mexican Grill reported quarterly earnings and sales on Wednesday that beat analysts’ expectations, driven by higher traffic at its restaurants.
The stock rose 4% in prolonged trading.
Here’s what the corporate reported in comparison with Wall Street’s expectations, based on an analyst survey by LSEG:
- Earnings per share: $13.37 adjusted vs. $11.68 expected
- Revenue: $2.7 billion versus expected $2.68 billion
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 12 months earlier.
Excluding a 36-cent loss from the rise in statutory reserves, the burrito chain earned $13.37 per share.
Net sales rose 14.1% to $2.7 billion.
The company’s same-store sales rose 7%, beating StreetAccount estimates of 5.2%. Chipotle said traffic was up 5.4% in comparison with the identical period last 12 months, while the typical check was up just 1.6%.
In February, Chief Financial Officer Jack Hartung told analysts that “unusually cold weather” hurt January sales. But because the quarter progressed, demand recovered to make up for the sluggish first month.
Chipotle is the rare restaurant chain to report increasing transactions despite higher menu prices. The company raised its prices again in October, citing inflation. Others within the restaurant industry have resorted to limited-time deals and promotions to appeal to customers, particularly those with lower incomes.
CEO Brian Niccol said the corporate saw traffic growth across all income groups through the quarter. He praised the chain’s perception of value amongst guests. Previously, executives had also emphasized that the majority customers come from higher income brackets.
Earlier this month, Chipotle raised prices in California by about 7% to offset the state’s higher minimum wage for fast-food staff, but the corporate has no plans for further increases, Niccol said Wednesday on CNBC’s “Closing Bell.” “.
Chipotle has also focused on making its burritos and bowls faster, improving the industry metric generally known as throughput. Niccol said throughput in the primary quarter reached its highest level in 4 years.
The chain expanded its footprint with 47 recent locations in the primary quarter, one step closer to its long-term goal of doubling its total variety of restaurants to 7,000 stores.
For the complete 12 months, Chipotle now expects same-store sales to extend within the mid- to high-single-digit percentage range, following a previous mid-single-digit increase. The company reiterated its forecast of 285 to 315 recent locations in 2024.
In March, Chipotle’s board approved a 50-for-1 stock split, considered one of the biggest within the history of the New York Stock Exchange. The company is in search of shareholder approval at its annual meeting on June 6. If investors vote yes, the stock will begin trading on June 26 on a post-split basis.
