(Reuters) -Chipotle Mexican Grill surpassed market estimates for quarterly sales on Wednesday as demand for its rice bowls and burritos held up even as prices increased, lifting its shares about 15% in extended trading.
The California-based chain has been able to buck a larger slowdown in customer traffic within the U.S. restaurant industry, partly because Chipotle’s loyal customers kept returning to its outlets despite inflation straining household budgets.
The company recorded foot traffic growth of about 17% during the quarter, outperforming the wider fast-food and quick service restaurant category’s traffic increase of only 0.63%, according to data analytics firm Placer.ai.
Chipotle’s comparable sales rose 11.1% in the second quarter, compared with analysts’ average estimate for a 9.09% increase, according to LSEG data.
Its adjusted profit of 34 cents per share beat expectations of 32 cents.
The company has benefited from incremental menu price hikes intended to offset the high costs associated with raw materials and labor. In April, it undertook a 6% to 7% menu price increase in California after a law boosted the minimum wage for fast-food workers to $20 an hour.
The company’s restaurant-level operating margin rose to 28.9% from 27.5% a year ago.
The upbeat results come just weeks after Chipotle’s shares began trading on the New York Stock Exchange following a 50-for-1 split of its common stock that the restaurant chain’s shareholders approved on June 6.
The company said on Wednesday it had authorized repurchases of common stock with a total aggregate purchase price of $400 million, exclusive of commissions.
It continues to expect comparable restaurant sales growth in the mid-to-high single-digit percentage for 2024.
(Reporting by Granth Vanaik in Bengaluru; Editing by Devika Syamnath)
