Chipotle Rebounds on Promise of In-Car Pickup, High-Tech Future
(Bloomberg) -- Chipotle Mexican Grill Inc. investors shrugged off slowing customer traffic in the third quarter as Chief Executive Officer Brian Niccol said more drive-thru windows for picking up digital orders are in store for the burrito chain.
- CEO Brian Niccol, still in his first year on the job, took a page from fast-food rivals by announcing drive-up test restaurants are coming to “several” more markets next year. “It’s clear that customers appreciate the added convenience, because these stores generate digital sales far above the national average,” he said on a conference call.
- The company has been pushing technology, including delivery and digitized kitchens. Digital sales grew 48 percent in the quarter, but it so far hasn’t been enough to move the needle, especially as delivery competition is coming on fast.
- Same-store sales rose 4.4 percent, compared with projections for 5 percent growth, while the chain saw 1.1 percent fewer restaurant transactions in the quarter. It may have faced some negative consumer sentiment after another illness outbreak in Ohio this summer. Customer traffic has stabilized so far this month, Niccol said.
- The shares rebounded in late trading, climbing as much as 8.6 percent to $460.25, after initially dropping 2.8 percent. Chipotle had risen 47 percent this year through Thursday’s close.
- For more details on the earnings, click here.
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