Chipotle Mexican Grill (CMG) 2022 Q1 earnings beat forecast

Chipotle Mexican Grill’s quarterly earnings and revenue topped Wall Street estimates, helped by consumers’ willingness to pay more for their burritos and plates.

The company’s shares rose about 3% in extended trading.

Here’s what the company said compared to what Wall Street expected, based on a survey of analysts at Refinitiv:

  • Earnings per share: $5.70 adjusted vs. $5.64 expected.
  • Revenue: $2.02 billion vs. $2.01 billion expected

The restaurant chain reported first-quarter net income of $158.3 million, or $5.59 per share, compared to $127.1 million, or $4.45 per share, a year earlier.

Chipotle’s operating margin has shrunk as it has been paid more for beef, avocados, paper and labor. However, rising menu prices and lower shipping costs helped offset these higher costs.

“While our restaurant margins remain volatile due to inflation, we have the ability to be patient while costs are volatile and pricing increases will restore our margins over time,” CEO Brian Niccol said on the company’s analyst conference call.

Prices were up about 10% year-over-year, including a 4% increase at the end of the first quarter, but executives said they still haven’t seen “very little resistance” from consumers.

Excluding corporate restructuring costs, some legal fees and other items, Chipotle earned $5.70 per share, beating the $5.64 per share expected by analysts polled by Refinitiv.

Net sales rose 16% to $2.02 billion, beating expectations of $2.01 billion.

Sales at the same stores that track sales at locations that have been open for at least 13 months rose 9% in the quarter. Chipotle had previously warned that the omicron option and winter storms would hurt January storms, but the chain beat StreetAccount estimates of 7.9% in same-store sales growth.

Face-to-face sales jumped by a third compared to last year, but digital transactions still account for 41% of total orders.

Chipotle opened 51 new locations during the quarter, most of which had digital-only driveways, or Chipotlanes.

The company did not provide a forecast for the full year, but said it expects same-store sales to grow between 10% and 12% in the second quarter, assuming current trends continue. Wall Street expected same-store sales to increase 9.3% in the next quarter, according to StreetAccount.

Read the full earnings report here.

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