Chipotle Mexican Grill (CMG) Q4 earnings 2022

A Chipotle restaurant and sign are seen on February 9, 2022 in Miami, Florida.

Joe Radle | Getty Images

Chipotle Mexican Grill on Tuesday reported weaker-than-expected quarterly earnings and earnings, suggesting price hikes may finally turn customers away.

In October, CEO Brian Niccol said the company faced “minimal resistance” to higher prices for its burrito and taco bowls, although third-quarter deal volume was down 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 poll of analysts:

  • Earnings per share: $8.29 adjusted against expected $8.90.
  • Income: $2.18 billion vs. expected $2.23 billion

For the first time since Chipotle’s Q3 2017 report, the company fell short of Wall Street’s estimates for both quarterly earnings and revenue, according to data from Refinitiv.

Burrito Chain reported fourth-quarter net income of $223.7 million, or $8.02 per share, up from $133.5 million, or $4.69 per share, a year earlier. Higher menu prices helped offset rising food prices as the company paid more for dairy and flatbread during the period ending December 31st.

Excluding certain legal expenses, 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 below Chipotle’s own late-October forecast.

The company said it forecast same-store sales growth in high single digits in the first quarter of 2023, based on January same-store sales growth in low double digits. StreetAccount estimated that Wall Street expected first-quarter same-store sales to be 6.7%.

A year ago, the company was experiencing a wave of Covid infections that caused some offices to reduce opening hours or temporarily close due to sick employees.

Last month, Chipotle said it was looking to hire 15,000 employees by spring, ahead of the busiest time of the year.

The company plans to open 255 to 285 new locations this year, including relocating 10 to 15 restaurants to add a driveway.

Read completely Chipotle earnings report Here.

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