Chipotle Mexican Grill (CMG) reported better-than-expected earnings fueled by strong same-store sales growth.
The quick service restaurant chain said traffic at its restaurants grew during this year’s first quarter despite menu prices rising about 10% from a year earlier.
Chipotle reported Q1 net income of $291.6 million U.S., or $10.50 U.S. per share, up from $158.3 million U.S., or $5.59 U.S. a share, a year earlier.
The company’s revenue during the quarter rose 17.2% to $2.37 billion U.S. from $2 billion U.S. a year earlier. Same-store sales rose 10.9% in Q1, beating analyst forecasts for 8.6% growth.
In releasing the Q1 numbers, Chipotle said it is now pausing price increases at its restaurants.
Overall traffic at Chipotle outlets rose 4% in this year’s Q1, reversing a decline seen during the previous quarter.
Digital orders accounted for nearly 40% of sales at Chipotle during Q1. The company outlined changes coming to its restaurants to improve speed of service.
Chipotle has been testing new grills that cook faster and more consistently. It has also been experimenting with how to staff restaurants to keep up with both in-person and online orders.
The company opened 41 new locations during the quarter, 34 of which include drive-thru lanes reserved for digital order pick-ups.
Looking forward, Chipotle said it expects same-store sales growth in the mid-to-high single digits for all of 2023. The company also reiterated plans to open between 255 to 285 new restaurants this year.
Chipotle’s stock is up 7% on news of its Q1 earnings. The company’s share price has gained 24% in the last 12 months to reach $1,780.00 U.S. per share.
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