Oct 28 (Reuters) – Chipotle Mexican Grill reported better-than-expected comparable sales on Wednesday, as value deals, marketing efforts, and limited-time offerings helped drive more customers to the burrito chain.
Shares of the company were up about 4% in extended trading.
The company has also benefited from demand among health-conscious and younger customers drawn to protein-rich, less-processed meals such as its burrito bowls and salads, as well as new offerings including its limited-time Chipotle Honey Chicken.
This has helped the restaurant chain to remain resilient even as consumers reined in spending amid geopolitical and macroeconomic uncertainty and grew wary of eating out after a multistate cyclosporiasis outbreak dented confidence.
“Broader consumer and industry headwinds may continue, but initiatives across our recipe for growth strategy are building and giving us more tools to win in any environment,” CEO Scott Boatwright said in a post-earnings call.
Chipotle’s third-quarter comparable restaurant sales were up 2.1%, compared with analysts’ average estimate of a 1.4% rise, according to data compiled by LSEG.
“Chipotle’s renewed momentum in the third quarter reflects the company’s success in winning over younger customers with promotions and loyalty rewards,” EMarketer analyst Rachel Wolff said.
Quarterly revenue rose 9.6% to $3.29 billion, in line with expectations.
However, higher input costs, such as labor, transport and ingredients such as beef, pressured its quarterly earnings.
The company posted an adjusted profit of 27 cents per share, compared with analysts’ average estimate of 29 cents.
Chipotle also reaffirmed its annual forecast for comparable restaurant sales to rise in the low single-digit range.
The results follow Starbucks’ announcement earlier this month that it was not buying Chipotle following reports of a potential deal that could have reunited the coffee chain’s CEO Brian Niccol with the burrito chain he led for six years.
(Reporting by Neil J Kanatt in Bengaluru and Waylon Cunningham in New York; Editing by Diti Pujara)
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