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Bloomberg
Chipotle Mexican Grill Inc jumped after second-quarter earnings showed the burrito chain’s investment in digital ordering, delivery and advertising is paying off.
Same-store sales, a key gauge of success for restaurants, rose 10 percent, compared with the 8.4 percent projected by analysts surveyed by Consensus Metrix. That’s the 10th straight quarter in positive territory and shows the company is keeping up the momentum. The company also strengthened its outlook again, forecasting comparable restaurant sales growth in the high single digits this year, up from a “mid to high†single-digit range before.
The results underscore how Chief Executive Officer Brian Niccol’s moves, including bigger bets on delivery and mobile ordering, are gaining steam. Both higher foot traffic and increased prices were behind the same-store sales gain, the company said.
The rise in sales in spite of higher costs is a positive sign for investors. Diners, for example, have proven willing to pay more for guacamole as the price of avocados rises. More price pressure could be in store, as the cost of proteins such as chicken is poised to rise this year, and shareholders will be watching for any signs that consumers are tired of paying more.