By Noah Rothstein
Chipotle Mexican Grill reported that its quarterly revenue surpassed pre-pandemic levels thanks to the return of dine-in customers.
Chipotle reported a fiscal second-quarter net income of $188 million, or $6.60 per share, up from $8.2 million, or 29 cents per share, the year previous. Due to menu price hikes and lower beef costs, food and beverage prices fell nearly 3% from a year ago.
In June, Chipotle raised menu prices by roughly 4% to cover the cost of increasing its workers’ wages.
According to CNBC, the chain earned $7.46 per share, exceeding the $6.52 per share expected by analysts surveyed by Refinitiv.
Net sales rose 38.7% percent to $1.89 billion, beating expectations of $1.88 billion. Same-store earnings grew 31.2%. In 2020, the company’s same-store sales fell more than 9% after lockdowns, and COVID-19 restrictions hit demand.
Online sales jumped 10.5%, making up 48.5% of the company’s quarterly sales. In the first quarter of this year, Chipotle’s online orders overtook its in-person sales for the first time.
“I fully expect the percentage to probably go down a little bit as the dining rooms come back,” CEO Brian Niccol explained on CNBC’s “Closing Bell” on Tuesday. “The thing that I keep an eye on are the absolute dollars that we’re doing in our digital business.”
The launch of the quesadilla in March, exclusively through online orders, helped boost online sales. Niccol said that one in ten orders included a quesadilla.
During the quarter, Chipotle opened 56 new locations and closed five restaurants. Forty-five of the new restaurants have “Chipotlanes,” their drive-thru lanes that are only for digital order pickup. Executives said that restaurants with Chipotlanes usually have 20% higher sales than locations without a drive-thru lane.
Assuming that current trends continue, the company expects same-store sales growth in the low-to-mid double digits.
CFO Jack Hartung expressed to analysts that the company predicts higher food prices next quarter due to increased beef and freight prices and staffing shortages at its suppliers.
“Over the next few quarters, we’ll have greater visibility on how much of this inflation is permanent versus transitory, and we can take the appropriate actions as needed to help offset any lasting impacts,” Hartung said.
