Chipotle Beats Expectations in Q3, Plans to Raise Prices next Year
Fast-casual restaurant chain Chipotle reported strong third-quarter earnings, surpassing estimates on both earnings and same-store sales. Revenue grew by 11% to $2.47 billion, with same-store sales increasing by 5%. Adjusted earnings per share exceeded expectations, coming in at $11.36 compared to the anticipated $10.51.
Chipotle attributed its success in Q3 to the return of the Carne Asada limited-time offering, which helped boost sales. The company’s operating margin for the quarter also saw a slight increase, reaching 16.0%.
Digital sales, which have been a significant driver of growth for Chipotle in recent years, accounted for 36.6% of total revenue. Although this represents a decrease from the previous quarter, the company’s digital sales still remain strong.
Looking to the future, Chipotle plans to raise menu prices again next year due to increasing food costs and California’s minimum wage increase. Despite this, the company remains confident in its growth prospects and aims to operate 7,000 restaurants in North America in the long-term. In Q3 alone, Chipotle opened 62 new restaurants.
Furthermore, Wall Street analysts have shown a favorable outlook for the stock, with 24 Buy ratings and no Sell ratings. Year to date, Chipotle shares have experienced a significant increase of around 32%, outperforming the S&P 500’s gain of 8%.
Overall, Chipotle’s strong performance in Q3, along with its plans for expansion and price adjustments, signify its ongoing success in the market. With positive ratings from analysts and a consistent rise in share value, Chipotle remains a promising investment option for investors and a popular choice among consumers.
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