Chipotle worth hikes drive revenue development – and the chain says extra will increase are coming

Chipotle Mexican Grill on Tuesday reported disappointing gross sales as worth hikes helped increase earnings however might have scared away inflation-weary clients.

The corporate additionally mentioned it will elevate costs once more in August, indicating that prices preserve rising for its eating places.

Shares of Chipotle rose greater than 6% in prolonged buying and selling.

Here is what the corporate reported:

• Earnings per share: $9.30 adjusted
• Income: $2.21 billion vs. $2.24 billion anticipated, in accordance with analysts surveyed by Refinitiv

The burrito chain reported second-quarter internet earnings of $259.9 million, or $9.25 per share, up from $188 million, or $6.60 per share, a yr earlier. The corporate mentioned it confronted increased prices for key components like avocados, beef and dairy, which offset the profit from worth will increase.

Excluding authorized prices, restaurant closure bills and different objects, Chipotle earned $9.30 per share.

Web gross sales climbed 17% to $2.21 billion. Identical-store gross sales rose 10.1% within the quarter as customers resumed ordering their burritos and tacos at Chipotle eating places. Wall Avenue was anticipating same-store gross sales development of 10.9%, in accordance with StreetAccount estimates.

Solely 39% of transactions through the quarter got here from digital orders. Supply orders fell barely, which helped Chipotle’s margins. Whereas many purchasers love the comfort of supply, third-party firms like Doordash cost Chipotle fee charges on each order, weighing on its earnings.

Seeking to the third quarter, Chipotle is projecting same-store gross sales development within the mid- to high-single digits. The forecast contains subsequent month’s deliberate worth will increase.

In the course of the second quarter, Chipotle’s board permitted a further $300 million to repurchase shares of the corporate.

Learn the complete earnings report right here.