Burrito chains are addressing rising labor and commodity costs, so rising menu prices helped boost profits, he said.
The company, based in Newport Beach, California, said Thursday that quarterly net income more than doubled year-over-year to reach $ 204.4 million. Total sales of $ 1.95 billion increased 22% year-on-year to set a quarterly record. Chipotle reported revenue adjusted to a one-time item of $ 7.02 per share, with revenue and earnings higher than analysts expected.
Chipotle shares fell 1% to $ 1,830 in aftermarket trading after rising earlier.
US restaurant sales began to recover about a year ago from the first closure caused by the Covid-19 pandemic. The chain is trying to sustain its growth this year as materials, employee wages and transportation costs have increased. According to Labor Ministry data, some restaurants have raised menu prices to accommodate this, with fast food prices rising 6.7% year-on-year for the 12 months ending in September.
In July, Chipotle recorded second-quarter sales above the same period before the pandemic. The company said the price increase did not discourage customers from buying burritos and was optimistic about growth.
In recent months, restaurants have been faced with the effects of an increase in coronavirus cases, while paying more for supplies and raising wages to recruit workers. The restaurant says it is losing sales due to lack of staff.
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Last week the restaurant Due to lack of staff, we needed to save time and servicesEspecially among drivers.Casual dining chain
Earlier this week, first-quarter earnings were lower than expected, and executives pointed to labor issues as a stumbling block to profits. The company said it is raising the price of the menu to make up for it.
“It’s a market for employees like never before,” said Jack Hartung, chief financial officer of Chipotle, in an interview.
Chipotle pepper Raised average employee wages to $ 15 per hour Earlier this year, we raised the price of the menu to cover the cost. The company said Thursday that it would continue to assess the cost of burritos, bowls and other products and believe it has the ability to raise prices further if necessary. Beef and shipping costs are rising, Chipotle said.
“Cargo is astronomically expensive and the ability to get the supply it needs is very difficult,” Hartung told investors.
On Thursday, Chipotle reported that same-store sales in the most recent quarter increased 15.1% compared to last year’s period. According to the chain, same-store sales are expected to increase by more than 10% in the fourth quarter compared to last year.
Chipotle aims to open at least 200 new restaurants this year, with executives still trying to reach that goal despite challenges in securing construction workforce, permits and materials. Said. According to the company, it opened 41 new restaurants during the quarter, most of which include drive-through lanes for receiving online orders.
Correction and amplification
Chipotle’s net income more than doubled year-over-year to $ 204.4 million. Earlier versions of this article mistakenly stated that it was up 11%. (Corrected on October 21)
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On October 22, 2021, the printed version appeared as “more than double the Chipotle profit when the price rises”.
If the chain burrito raises prices, Chipotle’s profits will more than double
Source link If the chain burrito raises prices, Chipotle’s profits will more than double