Chipotle Mexican Grill’s (CMG) third-quarter financial results have topped Wall Street expectations due largely to higher prices charged for its burritos and other food items.
Earnings per share (EPS) came in at $11.36 U.S. compared to $10.55 U.S. that was the consensus expectation of analysts.
Revenue in Q3 totaled $2.47 billion U.S., which was in line with analyst forecasts.
Chipotle’s prices were up 2.8% in Q3 compared with the year-ago period, due to price hikes implemented last year.
The company said that its input costs rose in Q3, with higher prices for beef and queso largely offsetting last year’s menu price increases.
Earlier in October, Chipotle raised its menu prices for the first time in more than a year, citing rising food inflation as the reason.
The company had paused its price hikes earlier this year as consumers pulled back their spending on discretionary food items.
However, company executives say that Chipotle has pricing power, or the ability to raise prices without alienating customers.
Chipotle’s Q3 same-store sales rose 5%, beating estimates of 4.6%. The company credited higher transactions and menu prices for the quarter’s same-store sales growth.
The company opened 62 new restaurant locations during Q3, all but eight of which feature a drive-thru lane reserved for picking up digital orders.
Looking ahead to 2024, Chipotle said it expects to open 285 to 315 new restaurants. The company reiterated its forecast for 2023 same-store sales growth in the mid-to-high single digits.
The stock of Chipotle has increased 23% over the last 12 months and currently trades at $1,806.47 U.S. per share.
