Chipotle earnings crush estimates as restaurant traffic grows 7.4%

People visit a Chipotle restaurant in Miami on Feb. 9, 2022.Joe Raedle | Getty Images

Chipotle Mexican Grill on Tuesday posted quarterly earnings and revenue that beat analysts' expectations as more customers visited its restaurants.

Shares of the company rose more than 2% in extended trading.

Here's what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

• Earnings per share: $10.36 adjusted vs. $9.75 expected
• Revenue: $2.52 billion vs. $2.49 billion expected

Chipotle reported fourth-quarter net income of $282.1 million, or $10.21 per share, up from $223.7 million, or $8.02 per share, a year earlier. The company said higher beef, produce and queso costs weighed on margins.

Excluding certain items, the burrito chain earned $10.36 per share.

Net sales rose 15.4% to $2.52 billion.

The company's same-store sales rose 8.4%, beating StreetAccount estimates of 7.1%. Executives said sales grew across every consumer income level.

Chipotle said foot traffic rose 7.4% in the quarter, bucking an industry-wide trend of declining visits. Restaurant giants McDonald's and Starbucks both reported traffic declines for the last three months of the year.

Chief Financial Officer Jack Hartung said the return of carne asada contributed to the quarter's strong same-store sales growth. The chain has also been making strides to improve productivity inside its restaurants by increasing training and adding more employees to its make lines.

“Throughput is one of those activities in an organization our size, it's like taking a boulder and starting to push it downhill. It starts really, really slow, but once it starts to pick up speed, it just continues to build momentum,” Chipotle Chief Operating Officer Scott Boatwright told CNBC.

Additionally, Chipotle's sales received a boost from a 3% menu price increase it implemented in October.

The company opened 121 new locations during the quarter.

Looking to 2024, Chipotle is forecasting full-year same-store sales growth in the mid-single-digit range and plans to open between 285 and 315 new locations. Hartung noted “unusually cold weather” hurt sales in January, but said the underlying demand for the company's burritos and bowls remains strong.

The chain is planning to release one to two limited-time menu items this year. Additionally, its marketing will highlight its core menu.

Also in 2024, Chipotle is planning an in-restaurant test of a robot that scoops avocados, called the Autocado, and an automated make line for its burrito bowls and salads. Both robots have already been tested in the company's innovation center.