(Reuters) – Chipotle Mexican Grill beat market estimates for quarterly sales on Wednesday as demand for its rice bowls and burritos held up despite higher prices, sending its shares up about 15 percent in extended trading.
The California-based chain has been able to weather a broader slowdown in customer traffic across the U.S. restaurant industry, in part because Chipotle’s loyal customers have continued to return to its outlets despite inflation straining household budgets.
The company saw foot traffic growth of about 17% during the quarter, outpacing traffic growth in the broader fast food and quick-service restaurant category of just 0.63%, according to data analytics firm Placer.ai.
Chipotle’s comparable sales rose 11.1% in the second quarter, compared with analysts’ average estimate of a 9.09% increase, according to LSEG data.
Its adjusted profit of 34 cents per share beat expectations of 32 cents.
The company has benefited from gradual price increases on its menus, designed to offset high costs associated with raw materials and labor. In April, it began raising its menu prices by 6 to 7 percent in California after a law raised the minimum wage for fast-food workers to $20 an hour.
The company’s restaurant operating margin increased to 28.9% from 27.5% a year ago.
The upbeat results come just weeks after Chipotle shares began trading on the New York Stock Exchange following a 50-for-1 stock split of its common stock that the restaurant chain’s shareholders approved on June 6.
The company announced Wednesday that it has authorized repurchases of common stock for a total purchase price of $400 million, excluding commissions.
The Company continues to expect comparable restaurant sales growth in the mid- to high-single-digit percentage range for 2024.
(Reporting by Granth Vanaik in Bangalore; Editing by Devika Syamnath)
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