Chipotle Mexican Grill misses expectations for earnings, income and same-store gross sales

Chipotle Mexican Grill on Tuesday reported weaker-than-expected quarterly earnings and income, signaling that its value hikes could lastly be alienating clients.

In October, CEO Brian Niccol stated the corporate noticed “minimal resistance” to greater costs for its burrito bowls and tacos, though transactions in the course of the third-quarter declined 1%. 

This is what the corporate reported for the fourth quarter, in contrast with what Wall Avenue was anticipating, primarily based on a survey of analysts by Refinitiv:

• Earnings per share: $8.29 adjusted vs. $8.90 anticipated
• Income: $2.18 billion vs. $2.23 billion anticipated

It is the primary time since Chipotle’s third-quarter report in 2017 that the corporate has fallen wanting Wall Avenue’s estimates for each its quarterly earnings and income, in response to Refinitiv knowledge.

The burrito chain reported fourth-quarter internet earnings of $223.7 million, or $8.02 per share, up from $133.5 million, or $4.69 per share, a yr earlier. Larger menu costs helped offset rising meals prices as the corporate paid extra for dairy and tortillas in the course of the interval, ended Dec. 31.

Excluding sure authorized bills, company restructuring prices and different objects, Chipotle earned $8.29 per share.

Web gross sales climbed 11.2% to $2.18 billion for the fourth quarter. The corporate’s same-store gross sales rose simply 5.6%, falling wanting StreetAccount estimates of 6.9% and coming in weaker than Chipotle’s personal forecast from late October.

The corporate stated it is projecting same-store gross sales development within the high-single digits for the primary quarter of 2023, primarily based on January same-store gross sales development within the low double-digits. Wall Avenue was anticipating first-quarter same-store gross sales of 6.7%, in response to StreetAccount estimates.

A yr in the past, the corporate was reeling from a wave of Covid infections that triggered some places to shorten hours or quickly shut attributable to sick staff.

Final month, Chipotle stated it’s seeking to rent 15,000 workers by this spring, forward of its busiest time of the yr.

The corporate plans to open between 255 and 285 new places this yr, together with relocating 10 to fifteen eating places so as to add a drive-thru lane.

Learn the complete Chipotle earnings report right here.