Chipotle Mexican Grill (CMG) Q2 2022 Earnings

People visit a Chipotle restaurant on February 9, 2022 in Miami, Florida.

Joe Raedle | Getty Images

Chipotle Mexican Grill reported disappointing sales on Tuesday as price hikes helped boost profits, but may have scared away some inflation-weary customers.

“The lower-income consumer has definitely pulled back in shopping frequency,” CEO Brian Niccol said on the company’s conference call. “Fortunately for Chipotle, you know, the majority of our customers are higher-income household consumers.”

The company also said it would raise prices again in August, noting that costs at its restaurants continue to rise.

Shares of Chipotle rose more than 8% in extended trading.

Here’s how the company compares to what Wall Street expected, based on a survey of analysts by Refinitiv:

  • Earnings per share: Adjusted $9.30 vs $9.04 expected
  • Revenue: $2.21 billion vs. $2.24 billion was expected

The burrito chain earned $259.9 million, or $9.25 per share, in the second quarter, compared with $188 million, or $6.60 per share, a year earlier. The company said it had higher costs for key ingredients such as avocados, beef and dairy, offsetting the benefit of higher prices.

Excluding legal costs, restaurant closing expenses and other items, Chipotle earned $9.30 per share in the quarter ended June 30.

Net sales It rose 17% to $2.21 billion. Same-store sales rose 10.1% in the quarter as consumers began ordering burritos and tacos at Chipotle restaurants. Wall Street had expected same-store sales growth of 10.9%, according to StreetAccount estimates.

Executives told analysts on a quarterly conference call that sales have slowed since May. However, one bright spot has been that restaurants in college towns have seen seasonal traffic return to pre-pandemic levels. About 15 percent of Chipotle locations are near colleges, executives said.

Only 39% of transactions in the quarter came from digital orders. The company said its loyalty program has more than 29 million members.

Delivery orders were down slightly, which helped Chipotle’s margins. While many customers love the convenience of delivery, third-party companies like Doordash charge Chipotle commissions on each order based on its profits.

Looking ahead to the third quarter, Chipotle is forecasting same-store sales growth in the mid- to high-single digits. The forecast includes price increases expected for next month.

In the second quarter, Chipotle’s board approved an additional $300 million to repurchase the company’s stock.

Read the full earnings report here.

Chipotle Mexican Grill (CMG) Q2 2022 Earnings

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