A customer holds a bag of groceries outside a Chipotle restaurant in New York on January 12, 2024.
Angus Mordant | Bloomberg | Getty Images
Chipotle Mexican Grill reported mixed quarterly results on Tuesday despite another quarter of higher traffic at its restaurants.
The company's shares fell 3% in extended trading.
Here's what the company reported compared to Wall Street's expectations, based on an LSEG analyst survey:
- Earnings per share: 27 cents adjusted versus 25 cents expected
- Revenue: $2.79 billion vs. expected $2.82 billion
Chipotle reported third-quarter net income of $387.4 million, or 28 cents per share, up from $313.2 million, or 23 cents per share, a year earlier.
The company's food and beverage costs increased during the quarter, driven in part by Chipotle's decision to return to generous portion sizes after backlash on social media over the size of its burrito bowls this summer.
Excluding items, the company earned 27 cents per share.
Net sales rose 13% to $2.79 billion.
Same-store sales rose 6%, falling just short of StreetAccount estimates of 6.3%. Restaurant traffic rose 3.3% in the quarter, continuing the chain's streak of bucking an overall decline in foot traffic across the industry. While many consumers have chosen to eat out less, Chipotle has benefited from having a wealthier customer base willing to pay more for its burritos and bowls.
“We're seeing growth across all income cohorts right now,” interim CEO Scott Boatwright said Tuesday on CNBC's “Closing Bell: Overtime.”
While demand was weaker at the start of the third quarter, Boatwright said sales accelerated over the period, particularly as Chipotle reintroduced its smoked brisket. The limited-time menu item is currently the most expensive protein, surpassing even the chain's steak and beef barbacoa options.
Boatwright, formerly Chipotle's chief operating officer, took the helm of the company after former CEO Brian Niccol left the company as a pilot in late August Starbucks' turn around. On the company's earnings call Tuesday, Boatwright assured investors that the chain's strategy is not changing despite the leadership change.
“I have worked with our talented leadership team to develop and advance our successful strategy, and we will continue to execute on it,” he said.
Digital sales accounted for 34% of the chain's quarterly food and beverage sales.
The company opened 86 new locations during the quarter, including 73 a “Chipotlane” dedicated to online order pickup.
Chipotle is also investing in new equipment to improve preparation and cooking. The company plans to introduce new vegetable cutters to all restaurants by next summer. Chipotle has also equipped 74 restaurants with double-sided grills and will announce its strategy to add the equipment to new and existing restaurants early next year.
For the full year, Chipotle reiterated its forecast that same-store sales will grow by a mid- to high-single-digit percentage. The company also expects to open between 285 and 315 new restaurants this year.
Looking ahead to 2025, Chipotle plans to open 315 to 345 new locations. More than 80% of these restaurants have a Chipotlane.
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Correction: Chipotle reported third-quarter net income of $387.4 million. An earlier version of this article misstated the number.
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