July 3, 2023, a Chipotle restaurant in New York.
Gina Moon | Bloomberg | Getty Images
Chipotle Mexican BBQ The company reported quarterly profit and revenue Wednesday that beat analysts’ expectations as traffic increased at its restaurants despite an industry slowdown.
The company’s shares rose about 13% in after-hours trading before giving up most of those gains to end up around 3%. As of Wednesday’s close, Chipotle’s shares have fallen 17% this month as investors worry about the health of the restaurant industry. In late June, the company conducted a 50-for-1 stock split.
Here’s how the company’s quarterly report for the quarter ended June 30 compared with Wall Street expectations, according to an LSEG survey of analysts:
- Earnings per share: 34 cents adjusted, 32 cents expected
- Revenue: $2.97 billion, $2.94 billion expected
The taco chain reported second-quarter net income of $455.7 million, or 33 cents a share, up from $341.8 million, or 25 cents a share, a year earlier. Chipotle’s profit rose from a year earlier as higher prices offset higher avocado prices and greater use of oil in fried nachos this season.
Excluding items, Chipotle earned 34 cents per share.
Net sales grew 18.2% to $2.97 billion.
The company’s same-store sales grew 11.1% in the quarter, exceeding StreetAccount’s forecast of 9.2%.
CEO Brian Niccol told CNBC that food demand peaked in April “Final bell: overtime“Wednesday. Same-store sales rose about 6% in June. Executives said July became more difficult to comprehend given the July 4 holiday, weather disruptions in Texas and recent technology outages.
Traffic at its restaurants increased 8.7% despite backlash on social media from customers who said their burrito bowls were small. The company denies reducing portion sizes, but is currently training employees to ensure customers are satisfied with the size of their burrito bowls, which will put some pressure on profit margins.
“We are focusing on those with outlier scores based on consumer surveys, and we are re-emphasizing training and coaching to ensure we are consistently making bowls correctly and Burritos. “We’re also leaning into all restaurants and re-emphasizing generous portions because that’s a core brand asset for Chipotle. “
The company is also growing market share, with restaurant transactions at all income levels growing, Nicol said. Other consumer companies from Pepsi arrive McDonald’sIn recent months, they have said lower-income customers are buying less, putting pressure on their sales. Like many fast-casual chains, Chipotle benefits from a customer base that tends to generate higher revenue.
The chain reintroduced the chicken al pastor as a limited-time menu item in March. More customers are also ordering Barbacoa, which was rebranded earlier this year to add “braised beef” to increase customer awareness of the option.
During the quarter, Chipotle opened 52 new company-owned stores and one new international licensed restaurant.
The company reiterated its full-year outlook for same-store sales to grow by a mid- to high-single-digit percentage. Chipotle also expects to open 285 to 315 new restaurants this year.
