Chipotle Mexican Grill said Tuesday that its profit and sales rose in the first quarter as it posted higher sales and dealt with inflation by raising menu prices.
The fast-food restaurant chain announced that comparable restaurant sales increased 9% year over year; Restaurant sales increased 33%; and that it opened 51 new restaurants in the neighborhood. Digital sales accounted for 41.9% of total food and beverage sales.
Chief Executive Brian Niccol said in a statement that the company’s “first-quarter performance was strong, despite challenges from the Omicron variant and ongoing inflation,” which the company said weighed on its costs.
The company increased menu prices, and chief financial officer Jack Hartung said in a conference call that he’s seen “very little resistance to pricing so far.”
Shares fluctuated after the close of business but remained in positive territory following the conclusion of the company’s conference call. They were up more than 5% by 6:30 p.m. ET after falling more than 5% in the regular session to close at $1,438.21.
The company reported net income of $158.3 million, or $5.59 per share, for the first quarter, up from $127.1 million, or $4.45 per share, in the first quarter of 2021. The adjusted Earnings were $161.4 million, or $5.70 per share, excluding stock-based compensation, restructuring charges and more. Revenue rose 16% to $2 billion from $1.74 billion in the year-ago quarter.
Analysts polled by FactSet had forecast adjusted earnings per share of $5.64 on sales of $2 billion.
Hartung said on the conference call that the COVID-19 pandemic continues to make it difficult to provide concrete financial guidance. For the second quarter, the company expects comparable restaurant revenue to grow by 10% to 12% if current trends continue. Hartung also said the company expects to open 235 to 250 new restaurants this year.
Analysts on the call also asked company executives about headcount, labor costs and a growing drive to unionize across industries. The company cited higher hourly wages along with inflation as factors behind the decline in operating margins in the first quarter.
Hartung said: “Last year at this time we lost more people,” adding that it “put a lot of strain on the system.” Now he said, “We’re back to business as usual.”
See: ‘It’s like being ripped in two’: Chipotle workers overwhelmed by online orders and angry customers
Niccol said the company’s restaurants are 85% to 90% occupied, which is better than pre-pandemic levels of about 80%. He also said employees are “excited” about the growth and that they have opportunities to advance within the company.
“It’s a reality because we build 200 to 300 restaurants a year,” he said.
Shares of the Newport Beach, Calif.-based company are down nearly 18% so far this year, while the S&P 500 Index SPX,
is down about 12% year-to-date.