Chipotle Mexican Grill (CMG) Q2 2022 earnings

Chipotle Mexican Grill on Tuesday reported disappointing gross sales as value hikes helped increase earnings however could have scared away some inflation-weary prospects.

“The low-income client positively has pulled again their buy frequency,” CEO Brian Niccol mentioned on the corporate’s convention name. “Happily for Chipotle, you understand, the vast majority of our prospects are the next family earnings client.”

The corporate additionally mentioned it might elevate costs once more in August, indicating that prices maintain rising for its eating places.

Shares of Chipotle rose greater than 8% in prolonged buying and selling.

This is what the corporate reported in contrast with what Wall Avenue was anticipating, based mostly on a survey of analysts by Refinitiv:

• Earnings per share: $9.30 adjusted vs. $9.04 anticipated
• Income: $2.21 billion vs. $2.24 billion anticipated

The burrito chain reported second-quarter web earnings of $259.9 million, or $9.25 per share, up from $188 million, or $6.60 per share, a yr earlier. The corporate mentioned it confronted greater prices for key components like avocados, beef and dairy, which offset the profit from value will increase.

Excluding authorized prices, restaurant closure bills and different objects, Chipotle earned $9.30 per share within the quarter that ended June 30.

Internet gross sales climbed 17% to $2.21 billion. Identical-store gross sales rose 10.1% within the quarter as customers resumed ordering their burritos and tacos at Chipotle eating places. Wall Avenue was anticipating same-store gross sales development of 10.9%, in response to StreetAccount estimates.

Executives instructed analysts on the quarterly convention name that gross sales have slowed since Could. Nevertheless, one vibrant spot was that eating places in faculty cities have seen their seasonal site visitors return to pre-pandemic ranges. About 15% of Chipotle areas are close to faculties, executives mentioned.

Solely 39% of transactions through the quarter got here from digital orders. The corporate mentioned its loyalty program has greater than 29 million members.

Supply orders fell barely, which helped Chipotle’s margins. Whereas many purchasers love the comfort of supply, third-party corporations like Doordash cost Chipotle fee charges on each order, weighing on its earnings.

Trying to the third quarter, Chipotle is projecting same-store gross sales development within the mid- to high-single digits. The forecast consists of subsequent month’s deliberate value will increase.

In the course of the second quarter, Chipotle’s board accepted a further $300 million to repurchase shares of the corporate.

Learn the total earnings report right here.