Chipotle Mexican Grill Inc. CMG 0.51% mentioned it elevated menu costs once more and is prone to elevate them additional this 12 months, as its chief govt officer mentioned larger prices are unlikely to abate.
Greater menu costs helped the burrito chain increase gross sales in current months because it pursues a plan to construct tons of extra shops within the coming 12 months, the corporate mentioned.
For Chipotle’s fourth-quarter ended Dec. 31, it reported per-share earnings of $5.58, after adjusting for one-time objects, exceeding analysts’ expectations of $5.25 a share, in accordance with FactSet. The chain reported internet earnings of $133.5 million, down from $191 million a 12 months earlier.
The chain’s complete gross sales have been $2 billion, above expectations.
The corporate’s shares rose 7% in aftermarket buying and selling Tuesday to $1,556. Chipotle’s shares had been down greater than 16% this 12 months as buyers grew involved about how rising prices have been affecting eating places.
The Newport Seaside, Calif., firm mentioned that worth will increase helped increase its gross sales in the course of the interval. It raised costs by 4% in December, with menu costs now up round 10% total in contrast with final 12 months, the corporate mentioned. Chipotle’s same-stores gross sales have been up 15.2% for the interval in contrast with final 12 months.
Chipotle CEO Brian Niccol mentioned in an interview that the chain will seemingly enhance costs once more this 12 months to offset rising wage and meals prices.
“I simply don’t see the inflation, sadly, going away anytime quickly,” mentioned Mr. Niccol. He mentioned he’s “chuckled” about feedback made earlier within the pandemic about value will increase being short-term: “It certain doesn’t look transitory to me.”
Starbucks Corp. , McDonald’s Corp. and lots of different chains mentioned they’ve elevated costs as prices have grown and count on inflation to proceed to be a priority this 12 months.
Chipotle raised costs on its meals final 12 months, saying it was significantly to assist cowl the price of wage will increase for hourly staff. The chain has additionally elevated costs on meals ordered by means of food-delivery apps in contrast with in-store prices.
Chipotle mentioned that prices grew in the course of the quarter, significantly for beef, freight and avocados. Wages have been additionally up in the course of the interval in contrast with final 12 months.
The corporate mentioned Tuesday that the Omicron variant of Covid-19 started to weigh on its gross sales progress in December and final month. Restaurant chains, together with Chipotle, have restricted hours and seating in the course of the newest coronavirus surge as they’ve struggled to keep up adequate staffing.
Mr. Niccol mentioned that staffing is enhancing and the chain is studying higher handle when staff name in sick. The corporate’s increase to pay helps it recruit new staff, he mentioned.
Chipotle mentioned its newer places exterior metropolis facilities have been delivering sturdy gross sales, main the chain to spice up its steering for total restaurant-location progress. The chain mentioned Tuesday that it anticipated to have no less than 7,000 Chipotle eating places in North America over time, up from a earlier objective of 6,000 places.
Most new eating places will embody drive-throughs devoted to on-line orders, the corporate mentioned. Chipotle goals to open 235 to 250 new eating places this 12 months, it mentioned.
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