Chipotle posted another round of positive earnings Wednesday afternoon.
For the first quarter, revenue rose 14.1% to $2.7 billion, with same-store sales up 7%, beating estimates of 5.13%. The company also beat expectations on the bottom line, with adjusted earnings per share of $13.37, compared to an estimate of $11.66.
Shares rose 3% in aftermarket trading.
Limited time offers like Barbacoa Braised Beef and Chicken with Pasteur, whose price is higher, boosted results in a difficult macro-consumption context. The chain saw a 5.4% increase in foot traffic, but the average check only increased 1.6%, lower than the expected 2.0%.
CEO Brian Niccol called the quarter “exceptional,” with improved store throughput and successful marketing initiatives. The results provide “confidence that we can achieve our long-term goal of more than doubling our business in North America and expanding internationally,” he said.
In the first quarter, Chipotle opened 47 new restaurants, including 43 locations with its Chipotlane drive-thru feature. This year, it plans to open 285 to 315 new locations, more than 80% of which will have the drive-thru concept. Ultimately, it plans to operate 7,000 restaurants in North America (there are currently 3,500).
For 2024, the company expects sales growth of between 5% and 5%, up from previous forecasts of growth at 5%.
Before the results, Deutsche Bank’s Lauren Silberman wrote in a client note that “Chipotle was among the best-performing restaurant stocks.”
Chipotle’s operating margin increased to 16.3%, up from 15.5% a year ago, while restaurant margins also jumped slightly, from 25.6% to 27.5%.
During its earnings call, Wall Street will be listening for updates on its automation efforts, such as its guacamole-making robot, Autocado. CEO Brian Niccol told Yahoo Finance that the machine is close to deployment.
“We’re already on our third or fourth prototype (of Autocado), and now we’re like, OK, this is ready to go in a restaurant. I’m sure when we put it in the restaurant, we will .” learn something that might lead us to repeat it all over again.
Investors will also be waiting to see how California’s FAST Act, which raised fast-food wages to $20 an hour, has impacted its operations in the state. Analysts agreed that Chipotle is among the companies that have the brand power and fan base to adapt to change.
“I think brands that offer a lot of value and have good traffic are best positioned,” said BTIG’s Peter Saleh, who pointed out that the average Chipotle chicken bowl costs $9 nationwide, compared with $12 at $13 for many burger options.
“They’ve created some momentum in their business as far as traffic goes,” Citi analyst Jon Tower told Yahoo Finance.
In a customer note written before…
