Chipotle sales jump 14% on the back of price hikes - as customers bought $2.7 billion of burritos, tacos and drinks in just three months

• The company reported total revenue of $2.7 billion for the first quarter of 2024
• More customers are visiting restaurants despite price increases, Chipotle said
• Shares in the burrito chain rose in extended trading following the results 

Chipotle’s sales have again beaten Wall Street expectations – boosted by price hikes and a jump in loyal customers.

Despite menu items getting more expensive, more Americans visited the Mexican chain restaurant in the first three months of this year.

That created a double whammy – more burritos sold, each at a higher price. In some cases they are a dollar more than they were a year ago at around $12.

While most US restaurant and fast food chains have seen customer numbers – and what they spend – weaken in the past few months, Chipotle has been bucking the trend.

Announcing its results for the first quarter of 2024, the company reported total sales of $2.7 billion – up 14.1 percent from a year earlier.

Chipotle has once again beaten market estimates in its quarterly earnings, boosted by higher traffic to its restaurants

This was driven by new restaurant openings, it said, and a 5.4 percent increase in restaurant traffic from the year prior.

In the first three months of this year, the burrito chain opened 47 new locations in the US, it said.

For the rest of 2024, the company restated its aim to open between 285 and 315 locations.

In February, chief financial officer Jack Hartung told analysts that ‘unusually cold weather’ had deterred visitors and hurt January sales, CNBC reported.

Demand likely rebounded again in the rest of the quarter to offset a slower first month.

Unlike other food chains, Chipotle is seeing an increase in visitors despite hiking its prices.

The California-based company increased the price of its burritos and rice bowls by 3 percent in October last year.

It was the fourth time the chain raised prices in the last two years – and it blamed stubborn inflation for the hike to costs.

According to Business Insider, before the October price hike, a chicken burrito bowl was priced at $10.95 at a location in Brooklyn, New York City.

After the increase, the same bowl was $11.35 without any extra guacamole or queso, according to Chipotle’s website. These can add $2.95 and $1.80, respectively.

In the first three months of this year, the burrito chain opened 47 new locations in the US

Despite menu items getting more expensive, more Americans visited the Mexican chain restaurant in the first three months of this year

Earlier this month, Chipotle increased prices in California to offset the higher minimum wage for fast food workers in the state.

Prices rose 7.5 percent, according to a report from Kalinowski Equity Research, meaning an $11 burrito bowl, for example, would end up costing closer to $12.

CEO Brian Niccol told CNBC Wednesday that the company does not have plans for any further price hikes.

Following the earnings results, shares in the company rose in extended trading.

At its last results in January, Chipotle admitted charging more for burritos helped boost profits 37% to $1.2 billion last year – with chain also helped by lower costs for avocados.

It said improvements to store efficiency also further helped attract more customers.

Following the earnings results, shares in the company rose in extended trading

Chipotle noted customer transactions in the quarter were 7.4 percent higher from a year earlier, while average amount spent per order rose 1 percent.

While Chipotle saw higher costs for some ingredients like beef and queso, costs of other commodities like paper and some vegetables have moderated in recent months, helping prop up margins at the company.

While Chipotle has seen an increase in visitors, fellow food companies McDonald’s and Starbucks both reported traffic declines for the last three months of last year.

Traffic at McDonald’s US stores slumped 13 percent in October last year, according to Placer.ai data cited by Wells Fargo.

It declined 4.4 percent and 4.9 percent in November and December, respectively.

Despite this, the fast food giant still managed to boost profits by 7 percent as a result of charging customers more for McMuffins, Big Macs, McNuggets and fries.

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