Chipotle Mexican Grill (CMG) Q4 2022 Results
A Chipotle restaurant and signage are seen on February 09, 2022 in Miami, Florida.
Joe Raedle | Getty Images
Chipotle Mexican Grill Tuesday reported weaker-than-expected quarterly earnings and revenue, signaling that its price hikes could finally alienate customers.
In October, CEO Brian Niccol said the company saw “minimal resistance” to higher prices for its burrito bowls and tacos, although transactions during the third quarter fell 1%.
Chipotle shares fell more than 5% in extended trading.
Here’s what the company reported for the fourth quarter, compared to what Wall Street expected, based on a Refinitiv analyst survey:
- Earnings per share: $8.29 adjusted vs $8.90 expected
- Income: $2.18 billion vs $2.23 billion expected
It’s the first time since Chipotle’s third-quarter report in 2017 that the company has fallen short of Wall Street estimates for quarterly earnings and revenue, according to Refinitiv data.
The burrito chain reported fourth-quarter net income of $223.7 million, or $8.02 per share, from $133.5 million, or $4.69 per share, a year earlier. Higher menu prices helped offset higher food prices as the company paid more for dairy and tortillas in the period ended Dec. 31.
Excluding certain legal fees, corporate restructuring costs and other items, Chipotle earned $8.29 per share.
Net sales climbed 11.2% to $2.18 billion in the fourth quarter. The company’s same-store sales rose just 5.6%, below StreetAccount’s estimate of 6.9% and weaker than Chipotle’s own late-October forecast.
The company said it expects high-single-digit same-store sales growth for the first quarter of 2023, based on double-digit January same-store sales growth. Wall Street was forecasting same-store sales of 6.7% in the first quarter, according to StreetAccount estimates.
A year ago, the company was reeling from a wave of Covid infections that led to reduced opening hours or the temporary closure of some sites due to sick employees.
Last month, Chipotle said it plans to hire 15,000 workers by this spring, ahead of its busiest time of the year.
The company plans to open between 255 and 285 new locations this year, including moving 10 to 15 restaurants to add a drive-thru lane.
Read Chipotle’s full earnings report here.
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