(Reuters) -Chipotle Mexican Grill Inc on Tuesday reported quarterly higher sales that topped Wall Street expectations, as higher menu prices did not dissuade the restaurant’s affluent customers from digging into its burritos and rice bowls.
While concerns around demand at U.S. restaurants have been mounting due to decades-high inflation, analysts have noted that sales bounced back in the third quarter after a slowdown in June, as gas prices eased from peaks and grocery costs climbed at a faster pace.
Chipotle also introduced garlic guajillo steak in a limited time offer in the quarter, in a bid to retain its customers amid a choppy consumer spending environment.
Comparable sales at the California-based chain jumped 7.6% in the third quarter ended Sept. 30, while analysts on average had expected a 7.3% rise, according to Refinitiv IBES.
Shares of the company rose 1% in extended trading.
Menu prices were expected to be as much as 13% higher in the third quarter over last year, according to Gordon Haskett Research Advisors analysts. Menu prices for third-party delivery are 30% higher than for carry-out or dine-in items, they said.
Given that higher pricing, the rise in comparable sales “implies that traffic is about flat in the quarter, which I think is a good sign,” said BTIG analyst Peter Saleh.
The chain also drove growth by opening 43 new restaurants during the quarter, including 38 with a so-called “Chipotlane” drive-through option – a format the company said was performing well.
Shares of the company rose about 4% in extended trading, as its restaurant level margin also rose to 25.3% from 23.5% a year earlier.
(Reporting by Deborah Sophia in Bengaluru and Hilary Russ in New York; Editing by Shinjini Ganguli and Deepa Babington)
