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Chipotle Beats Earnings Estimates With Resilient Foot Traffic, Margin Expansion

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Construction for a new Chipotle Mexican Grill restaurant has commenced in Barrington.AP

(CTN News) – A positive earnings report was posted by Chipotle on Wednesday afternoon.

A 14.1% increase in revenue was reported for the first quarter, while same-store sales increased by 7%, exceeding expectations of 5.13%. Furthermore, the company’s adjusted earnings per share exceeded expectations, coming in at $13.37 versus $11.66 expected. After-market trading on the shares rose by 3%.

Due to limited-time offers such as Chipotle Chicken al Pastor, which is priced at a premium, results were boosted against a challenging macro consumer backdrop. As a result of the increase in foot traffic, the average check increased by only 1.6%, which was lower than the expected increase of 2.0%.

Brian Niccol, CEO of Target, described the quarter as “outstanding,” with improvements in store service speed, which encourages customers to visit. Sales were also boosted by marketing initiatives such as renaming barbacoa to braised beef barbacoa, which showcased its cooking method and meat.

In the earnings call, Niccol stated that the chain is experiencing gains across all income cohorts. Every group reports that this is a great value proposition.

A total of 47 new Chipotle restaurants were opened in Q1 of this year, including 43 drive-through locations. During this year, it expects to open 285 to 315 new locations, with more than 80% having a drive-through concept. As of now, there are 3,500 restaurants in North America. It is expected to operate 7,000 restaurants by the end of the decade.

Sales growth for 2024 is expected to be in the mid- to high-single digits, up from the previous guidance of mid-single digits. “We are confident that we will be able to achieve our long-term target of expanding internationally and more than doubling our business in North America,” Niccol stated.

As Lauren Silberman of Deutsche Bank noted in a client note prior to the results, “Chipotle has been among the best-performing restaurant stocks in recent months.” Comparatively to a year ago, the company’s operating margin increased to 16.3% from 15.5%, while restaurant-level margins increased slightly from 25.6% to 27.5%.

Efforts are also being made to automate. The company’s Chipotle CEO Brian Niccol stated that the guacamole prep robot, Autocado, as well as the automated salad and bowl preparation machines would be in restaurants “later in the year as part of the staged rollout.”

California was discussed in the earnings call by CFO Jack Hartung. From April 1, fast food wages in the state increased to $20 under the FAST Act.

It is estimated that Chipotle’s wages in the Golden State have increased by nearly 20%, and menu prices have been raised by 6% to 7% to help offset the increased costs. The chain, however, still offers a high level of value with its chicken burritos having a price tag of around $10, according to Hartung.


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Salman Ahmad is a seasoned writer for CTN News, bringing a wealth of experience and expertise to the platform. With a knack for concise yet impactful storytelling, he crafts articles that captivate readers and provide valuable insights. Ahmad's writing style strikes a balance between casual and professional, making complex topics accessible without compromising depth.

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