Chipotle Mexican Grill said Tuesday that its first-quarter profit and revenue rose as it saw more sales and dealt with inflation by raising menu prices.
The fast-food restaurant chain said its comparable-restaurant sales were up 9% year over year; in-restaurant sales rose 33%; and that it opened 51 new restaurants in the quarter. Digital sales made up 41.9% of total food and beverage revenue.
Chief Executive Brian Niccol said in a statement that the company’s “performance in the first quarter was strong, despite challenges from the omicron variant and ongoing inflation,” which the company said ate into its costs.
The company raised menu prices, and Chief Financial Officer Jack Hartung said on a conference call that he has seen “very little resistance to pricing so far.”
Chipotle CMG, -5.13% shares see-sawed after hours but stayed in positive territory after the company’s earnings call concluded, ending the extended session up nearly 4% after falling more than 5% in the regular session to close at $1,438.21.
The company reported first-quarter net income of $158.3 million, or $5.59 a share, up from $127.1 million, or $4.45 a share, in the first quarter of 2021. Adjusted earnings were $161.4 million, or $5.70 a share, adjusted for stock-based compensation, restructuring costs and more. Revenue increased 16% to $2 billion from $1.74 billion in the year-ago quarter.
Analysts surveyed by FactSet had forecast adjusted earnings of $5.64 a share on revenue of $2 billion.
Hartung said on the call that the COVID-19 pandemic continues to make it hard to issue specific financial forecasts. For the second quarter, the company said it expects comparable-restaurant sales growth in the 10% to 12% range if current trends continue. Hartung also said the company expects to open 235 to 250 new restaurants this year.
Analysts on the call also asked the company’s executives about staffing levels, labor costs and a growing push to unionize in different industries. The company cited higher hourly wages along with inflation as factors for the drop in operating margins in the first quarter.
Hartung said “last year at this time, we were losing more people,” and added that that “put a lot of stress on the system.” Now, he said “we’re back to business as usual.”
Niccol said the company’s restaurants are 85% to 90% staffed, which is better than the pre-pandemic levels of about 80%. He also said employees are “excited” about growth and that they have opportunities to advance in the company.
“It’s a reality because we’re building 200 to 300 restaurants a year,” he said. The company now has 3,000 restaurants, and Niccol said the goal is 7,000 restaurants in North America.
Shares of the Newport Beach, Calif.-based company have fallen nearly 18% so far this year, while the S&P 500 Index SPX, -2.81% has fallen about 12% year to date.
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