Chipotle Sees Tired-of-Cooking Americans Returning to Burritos
(Bloomberg) -- Chipotle Mexican Grill Inc.’s chief executive officer says U.S. consumers are all stocked up and sick of cooking. With stimulus cash starting to flow and mobile ordering platforms gaining popularity, the burrito orders may start to flow again soon, he said.
“I think all the pantry loading behavior has slowed down and I think also people have worked through their pantries,” CEO Brian Niccol told investors on a conference call Tuesday. “People realize they bought a lot of things that they end up having to throw away, and I think there’s fatigue with cooking.”
Chipotle shares rose 5.6% to $830.50 in late trading, a sign investors trust in Niccol’s optimism. The company, which has seen its stock fall 6% in 2020, withdrew its financial guidance in its quarterly earnings report due to uncertainty facing the U.S. economy amid the pandemic.
Like most restaurants, Chipotle saw same-store sales fall precipitously to negative 16% in March as the U.S. shut down swaths of the economy. But this followed strong showings in January and February. And there was a silver lining: Digital orders surged and the ranks of its loyalty program swelled. Niccol predicts these gains will stick after the U.S. emerges from the virus.
Chipotle said its financial position is solid enough to sustain operations for “well over a year” and the company won’t need to seek loans under a government aid program for struggling restaurants.
The burrito chain ended last quarter with $909 million in cash, restricted cash and short-term investments, Chipotle said Tuesday in a statement. It also has no debt, giving the company flexibility to weather the coronavirus pandemic that has upended the restaurant industry.
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