A buyer carries a Chipotle Mexican Grill Inc. bag outdoors a restaurant in San Francisco, California, U.S., on Monday, July 20, 2020.
David Paul Morris | Bloomberg | Getty Images
Chipotle Mexican Grill on Wednesday reported quarterly same-store gross sales growth of greater than 8%, however a shift to delivery is boosting prices and leading to fewer drink purchases, which dragged down its internet revenue.
Shares of the corporate fell 4% in after-hours buying and selling.
Here’s what the corporate reported for the quarter ended Sept. 30 in contrast with what Wall Street was anticipating, based mostly on a survey of analysts by Refinitiv:
- Earnings per share: $3.76, adjusted, vs. $3.47 anticipated
- Revenue: $1.6 billion vs. $1.59 billion anticipated
Chipotle reported third-quarter internet revenue of $80.2 million, or $2.82 per share, down from $98.6 million, or $3.47 per share, a yr earlier. A better quantity of delivery and steak orders and costlier beef elevated prices, which had been partially offset by menu value will increase, much less salsa utilization and decrease avocado costs.
Excluding $28.7 million in authorized bills and different objects, the burrito chain earned $3.76 per share, topping the $3.47 per share anticipated by analysts surveyed by Refinitiv.
Net gross sales rose 14.1% to $1.6 billion, narrowly beating expectations of $1.59 billion. Same-store gross sales climbed 8.3% within the quarter, hitting a peak in August. Strong demand continued into September, however the firm was lapping increased same-store gross sales growth because of the launch of its carne asada choice final yr in that month.
For the second consecutive quarter, digital gross sales greater than tripled. CEO Brian Niccol mentioned that digital gross sales may exceed $2.5 billion this yr, greater than double final yr’s whole. Online orders accounted for almost half of all gross sales, and about half of Chipotle’s digital clients selected to have their orders delivered.
Delivery service income, which incorporates delivery and repair charges paid by clients to Chipotle by way of its app and web site, made up 1.3% of its internet gross sales. The firm mentioned that income charged to clients does not absolutely cowl the fee charges it pays to third-party delivery suppliers, such as DoorDash and Grubhub.
CFO Jack Hartung mentioned that the corporate is testing menu value will increase on delivery orders however hasn’t seen any noticeable modifications to demand but. The assessments elevate costs from 7% to 17%, in accordance with Niccol.
The firm opened 44 eating places and completely closed Three through the quarter. Twenty-six of the brand new places had Chipotle’s drive-thru lanes, that are just for choosing up digital orders.
Chipotle as soon as once more declined to supply an outlook for 2020, citing the uncertainty of the pandemic.
Watch CNBC’s unique interview with Chipotle CEO Brian Niccol tomorrow on “Halftime Report” at 12:30 p.m. ET.