A Chipotle restaurant and signage is seen on February 09, 2022 in Miami, Florida.
Joe Riddle | Getty Images
Chipotle Mexican Grill On Tuesday, it reported lower-than-expected quarterly revenue and earnings, signaling that its price hikes are finally alienating consumers.
In October, CEO Brian Nicol said the company saw “minimal resistance” to higher prices for its burrito bowls and tacos, even though transactions fell 1 percent during the third quarter.
Shares of Chipotle fell more than 5 percent in extended trading.
Here’s what the company reported in the fourth quarter compared to Wall Street’s expectations, based on a survey of analysts by Refinitiv:
- Earnings per share: $8.29 adjusted vs. $8.90 expected
- Income: $2.18 billion vs. $2.23 billion expected
It’s the first time since Chipotle’s third-quarter report in 2017 that the company has missed Wall Street’s estimates for both its quarterly revenue and earnings, according to Refinative data.
The burrito chain reported net income of $223.7 million, or $8.02 per share, in the fourth quarter, compared with $133.5 million, or $4.69 per share, a year earlier. Higher menu prices helped offset higher food costs as the company paid more for dairy and tortillas during the period ended Dec. 31.
Excluding certain legal expenses, corporate restructuring costs and other items, Chipotle earned $8.29 per share.
Net sales Revenue rose 11.2 percent to $2.18 billion for the fourth quarter. The company’s same-store sales rose just 5.6 percent, below StreetAccount’s estimate of 6.9 percent and weaker than Chipotle’s own forecast from late October.
The company said it is forecasting same-store sales growth for the first quarter of 2023, based on low double-digit same-store sales growth in January. Wall Street was expecting same-store sales to decline 6.7 percent in the first quarter, according to StreetAccount estimates.
A year ago, the company was hit by a wave of Covid infections that caused some locations to reduce hours or temporarily close due to sick employees.
Last month, Chipotle said it was looking to hire 15,000 workers by this spring, ahead of its busiest time of year.
The company plans to open between 255 and 285 new locations this year, including relocating 10 to 15 restaurants to include a drive-thru lane.
Read Chipotle’s full earnings report here.
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