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Chipotle's price hikes, queso cheese boost sales past estimates

Published 07/26/2018, 04:30 PM
© Reuters. The logo of Chipotle Mexican Grill is seen at the Chipotle Next Kitchen in Manhattan
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(Reuters) - Chipotle Mexican Grill Inc (N:CMG) topped analysts' estimates for comparable-restaurant sales on Thursday, boosted by higher menu prices and demand for its queso cheese dip in its first full quarter under Chief Executive Officer Brian Niccol.

Chipotle shares, which have soared over 56 percent this year, mainly buoyed by optimism around its new CEO, rose 5.2 percent in extended trading.

The company has benefited from an increase in menu prices, a move that is seen as out of sync as most big restaurant chains, especially fast-food joints, rely on low-price value menus to boost sales and market share.

However, the burrito chain, considered more premium than other fast food rivals, has largely escaped the intense competition in the value space that took a toll on McDonald's Corp's (N:MCD) quarterly U.S. same-store sales earlier on Thursday.

Sales at Chipotle restaurants open at least 13 months rose 3.3 percent in the second quarter. Analysts, on average, had expected a rise of 2.7 percent, according to Thomson Reuters I/B/E/S.

Net income fell to $46.9 million, or $1.68 per share, in the quarter ended June 30, from $66.73 million, or $2.32 per share, a year earlier.

Revenue rose 8.3 percent to $1.27 billion, hurt by a charge related to the closure of some underperforming restaurants.

Excluding items, the company earned $2.87 cents per share.

© Reuters. The logo of Chipotle Mexican Grill is seen at the Chipotle Next Kitchen in Manhattan

Analysts on average had expected the company to earn $2.80 per share on revenue of $1.26 billion.

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