By Granth Vanaik
(Reuters) -Chipotle Mexican Grill raised its full-year sales forecast on Wednesday, betting on resilient demand for its burritos and rice bowls despite higher menu prices.
Shares of the California-based company were up 3% in extended trading. Its shares breached the $3,000 mark for the first time after the company approved a 50-for-1 stock split last month.
Chipotle has seen an increase in foot traffic at its stores even in the face of sticky inflation.
Data from Placer.ai showed that monthly visits to Chipotle during the months of January, February and March had outpaced the wider fast-casual segment. In the first quarter, Chipotle saw visits increase by 10% year-over-year, ahead of the 4.1% growth seen by the fast-casual segment.
The company expects comparable restaurant sales growth of mid-to-high-single digit percentage for 2024, compared with its previous projection of mid-single digit growth.
“Chipotle is well positioned for this economic environment,” said Emarketer analyst Blake Droesch. “Its success is a bellwether for the fast-casual space.”
In order to drive more customer orders, the restaurant chain also brought back its popular chicken al pastor dish to its menus across North America and Europe during the quarter for a limited time period.
The restaurant chain’s comparable sales rose 7% in the first quarter, compared with LSEG estimates of a 4.97% increase.
It has also undertaken price hikes to shield its profit margin against higher costs of labor and raw materials such as beef, tortillas, queso and avocados.
Chipotle’s restaurant level operating margin rose to 27.5% in the reported quarter from 25.6% a year ago.
Excluding one-time items, Chipotle earned $13.37 per share in the first quarter, topping analysts’ expectation of $11.68.
(Reporting by Granth Vanaik in Bengaluru; Editing by Shilpi Majumdar)
