Chipotle Reports Higher Profitability on Price Increases

(Bloomberg) -- Chipotle Mexican Grill Inc.’s profitability jumped in the first quarter as the burrito chain benefited from a rebound in sales and higher menu prices.

• The key measure of same-store sales rose 17.2% in the quarter ended March 31, Chipotle said in a statement Wednesday. That matches the estimate compiled by Bloomberg. The company reported revenue of $1.7 billion, nearly matching analysts’ expectations.

Key Insights

• The higher sales drove restaurant margin of 22.3% -- an increase of 470 basis points from a year earlier and outpacing estimates. Chipotle said menu price increases also contributed to the improved gauge of profitability.
• Chipotle’s digital sales continued to soar during the pandemic, rising 134% in the quarter. The company is testing other ways to appeal to diners’ appetites including carside pickup and a digital-only store in Highland Falls, New York.
• The flip side to the higher online sales are higher costs of getting the orders to customers. On a call with investors, Chief Financial Officer Jack Hartung said that delivery costs remain elevated versus a year earlier. The company also reported higher costs related to its new cauliflower rice. Avocado prices are “seasonally higher” in the current quarter.
• The company is targeting a total of 6,000 total locations -- more than double the current tally of about 2,800. This will include a few hundred in Canada, according to executives on the call.

Market Reaction

• The shares were little changed after regular trading in New York. The stock has risen 8.7% this year through today’s close.

©2021 Bloomberg L.P.