Chipotle Beats Market Expectations With Key Sales Figure
NEW YORK (AP) — Chipotle said Thursday that a key sales figure rose beyond market expectations in the second quarter, helped by higher menu prices that offset a drop in the number of diners visiting.
The burrito chain is still trying to recover from a series of food scares that devastated its sales. Earlier this year, it hired former Taco Bell CEO Brian Niccol as its chief executive, then brought in another former Taco Bell executive, Chris Brandt, as its chief marketing officer.
The new management trying to bring in customers with new menu items, including the type of fast-food limited-time offers that Chipotle had shied away from in the past. The company is also trying to expand digital sales through deliveries and its app for pick-ups.
Chipotle said sales at established restaurants rose 3.3 percent, surpassing the 2.7 percent that analysts expected, according to FactSet. The increase was mostly due to a 4 percent increase in menu prices and customers ordering queso, a Tex Mex cheese dip recently added to the offerings. Customer visits to stores declined 1.8 percent in the quarter.
Overall revenue rose 8.3 percent to $1.3 billion, driven mostly by new restaurant openings.
Shares in Denver-based Chipotle Mexican Grill Inc. jumped 6 percent to $475 in after-hour trading.
Niccol said the company was encouraged by a 33 percent increase in online sales, which now account for 10 percent of sales. The company said delivery sales quadrupled during the quarter. Delivery service is now available at 1,700 of Chipotle's stores, and that will expand to 2,000 by the year's end.
Customers were spending an average of about $16 to $17 per online sale, compared to $12 at restaurants, the company said.
Net income fell 30 percent to $46.9 million due to corporate restructuring other costs.
Earnings per share fell 27 percent to $1.68. Excluding those costs, net income was $2.87 per share. That topped the $2.81 a share expected by analysts, according to FactSet.
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