Chipotle Beats Sales Expectations and Pledges More Change Ahead

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Chipotle Mexican Grill

CMG 1.93%

is lastly giving buyers one thing to really feel happy about.

The burrito maker’s shares rallied late Wednesday after the corporate posted better-than-expected revenue and gross sales for its first quarter.

Chipotle has struggled for greater than two years to win again clients after a sequence of meals security scares. In February, the chain named

Brian Niccol,

previously chief government of Taco Bell, its new CEO, instead of founder Steve Ells.

Presiding over his first earnings name as Chipotle’s CEO, Mr. Niccol on Wednesday thanked Mr. Ells—who stays chairman of the board—for giving him the autonomy to call his personal crew and make adjustments to the chain’s technique. Mr. Niccol already has employed a brand new advertising chief and human assets head.

“The chance is clearly a restoration story within the U.S.,” Mr. Niccol mentioned. He wouldn’t elaborate on his plans. He mentioned he would maintain a name to debate his restoration plans with buyers in additional element earlier than Chipotle’s subsequent quarterly earnings report. Shares, down 28% over the previous 12 months, rose greater than 10% to $374.99 in after-hours buying and selling Wednesday.

Chipotle not too long ago launched ads showcasing the standard of its elements. Analysts had criticized a earlier marketing campaign that didn’t give attention to the chain’s meals, and Mr. Niccol mentioned the corporate will do extra testing of advertisements to grasp what resonates.

“Since Brian’s arrival we’ve taken a recent take a look at each a part of our enterprise,” Chief Monetary Officer

Jack Hartung

mentioned on the decision.

Chipotle’s income rose 7.four% within the newest quarter after the quick-service restaurant chain raised menu costs. The corporate additionally opened 35 new eating places and noticed a 2.2% improve in comparable restaurant gross sales.

Analysts polled by FactSet had estimated a 1.three% improve in same-store gross sales. First-quarter income rose to $1.15 billion from $1.07 billion a 12 months earlier.

The Denver-based firm reported a revenue of $59.four million, or $2.13 a share, up from $46.1 million, or $1.60 a share, a 12 months earlier. Analysts polled by Thomson Reuters had forecast earnings of $1.57 a share on $1.15 billion in income.

For 2018, the corporate mentioned it expects comparable restaurant gross sales to extend within the low-single digits. It additionally expects to open between 130 and 150 new eating places.

Write to Julie Jargon at and Aisha Al-Muslim at

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