Chipotle Mexican Grill beats expectations, sees high traffic at chains
Category: #headlines |   By Shreya Bhute  |   Date: 2023-04-26

Chipotle Mexican Grill beats expectations, sees high traffic at chains

American fast casual restaurant chain, Chipotle Mexican Grill, has reportedly released its revenue and quarterly earnings report, beating analysts’ expectations, driven by better than anticipated growth in same-store sales.

Similar to McDonald’s, Chipotle stated that traffic to its chain restaurants went up during Q1 of the fiscal year despite a higher number of menu items. The chain’s menu prices have also gone up roughly 10% compared to a year earlier.

Chipotle CEO Brian Niccol stated that the chain has showcased its pricing power by beating analysts’ expectations and recording high restaurant traffic. Chipotle shares jumped more than 7% during extended trading.

The restaurant chain reported Q1 net income of approximately $291.6 million, which translates to $10.50 per share. The income went up from over $158.3 million, which was reported a year earlier, where the shares were trading at $5.59. Dropping avocado prices, in conjunction with the firm’s menu price hikes have helped boost profit margins compared to a year prior.

Revenues climbed over 17.2%, to hit $2.37 billion, up from $2 billion a year ago. Meanwhile, same-store sales increased 10.9%, beating the estimates of 8.6% set by StreetAccount.

As per Niccol, higher-income consumers are making more frequent returns to restaurants lately. Additionally, diners in the lower-income bracket are also coming in more often than six months ago, but their overall traffic is still down when compared to a year ago.

All in all, diner traffic has increased roughly 4% during the quarter, effectively reversing the decline witnessed during the last quarter. Digital orders, on the other hand, accounted for approximately 40% of the total sales. Helped by food delivery apps, Chipotle customers are increasingly ordering their tacos and burritos in person than a year ago.

The firm inaugurated 41 new locations in the quarter, with 34 coming with drive-thru lanes specifically reserved for online order pickup.

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Shreya Bhute    


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