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Chipotle Mexican Grill on Tuesday reported Quarterly profits and revenue exceeded analyst expectations, driven by better-than-expected same-store sales growth.
As McDonald’sChipotle said traffic to its restaurants increased in the primary quarter despite higher menu items. Chipotle menu prices have increased by roughly 10% over the previous yr. CEO Brian Niccol said the chain had proven to have price-setting power.
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“We don’t desire to be facing an inflationary environment, but we don’t desire to be left behind either,” he said in the course of the company’s conference call.
Pedestrians wearing protective masks walk in front of a Chipotle restaurant in San Francisco, California, April 19, 2021.
David Paul Morris | Bloomberg | Getty Images
For now, Chipotle is holding off on price increases, Niccol told CNBC’s “Closing Bell.”
The corporate’s shares rose greater than 7% in prolonged trading.
Here’s what the corporate reported in comparison with Wall Street expectations, based on a survey of analysts by Refinitiv:
- Earnings per share: $10.50 vs. $8.92 expected
- Revenue: $2.37 billion vs. $2.34 billion expected
Chipotle reported first-quarter net income of $291.6 million, or $10.50 per share, in comparison with $158.3 million, or $5.59 per share, a yr earlier. The corporate’s menu price hikes and lower avocado prices helped improve profit margins in comparison with a yr ago.
Income increased by 17.2% to USD 2.37 billion, from USD 2 billion in the period a yr earlier. Same-store sales rose 10.9%, beating StreetAccount’s estimate of 8.6%.
Niccol said consumers with higher incomes usually tend to return to restaurants. Even people on lower incomes visit greater than in the previous six months, although their traffic stays lower than a yr ago. Overall, traffic grew around 4% this quarter, reversing the previous quarter’s decline.
In February, management said January sales at the identical stores had double-digit growth. A yr earlier, the corporate had seen sluggish sales because the Covid-19 outbreak put pressure on staff and caused stores to temporarily close.
Chipotle Chicken Pastor is on the right track to develop into the chain’s hottest protein option for a limited time, Niccol said in the course of the company’s conference call. The corporate launched it in mid-March.
Digital orders accounted for nearly 40% of sales in the quarter. Chipotle customers were more more likely to personally order burritos and tacos in comparison with a yr ago.
Management also outlined changes to the restaurants to enhance the speed and accuracy of service. The chain is testing latest grills that cook faster and more consistently. It is usually experimenting with staffing its two production lines to maintain up with demand from each individual customers and digital orders.
In the course of the quarter, the corporate opened 41 latest locations, 34 of which included drive-in lanes reserved for digital order pick-up.
the remainder of the yr, Chipotle predicts same-store sales growth in mid-to-high single digits. It expects the identical range of same-store sales growth in the second quarter, roughly in line with StreetAccount’s estimate of 5.8%.
The corporate reiterated its plans to open between 255 and 285 latest restaurants in 2023.