Chipotle's Third Quarter: More Traffic, Higher Costs

Chipotle Mexican Grill recently shared their third-quarter results, and while more people visited their restaurants, the company's earnings didn't quite hit the mark. Their stock took a dip, falling by 3% after hours. Let's break down the numbers. The company's adjusted earnings per share were 27 cents, just a little higher than the expected 25 cents. But their revenue wasn't as impressive, coming in at $2. 79 billion instead of the forecasted $2. 82 billion. Net income increased to $378. 4 million, or 28 cents per share, compared to the previous year's $313. 2 million, or 23 cents per share. One reason for the higher costs is Chipotle's decision to give customers more generous portions. This came after some social media drama about the size of their burrito bowls. Same-store sales rose by 6%, just shy of the expected 6. 3%. More people walked into their restaurants, with traffic increasing by 3. 3%.Interim CEO Scott Boatwright explained that sales picked up during the quarter, especially with the reintroduction of their pricey smoked brisket. He assured investors that the company's strategy won't change despite the leadership shift. Digital sales accounted for 34% of their food and beverage revenue. Chipotle also opened 86 new locations, with 73 of them featuring a "Chipotlane" for online order pickup. They're planning to upgrade their kitchen equipment too, like adding new produce slicers and dual-sided grills. For the rest of the year, Chipotle expects same-store sales to grow by a mid- to high-single-digit percentage. They plan to open between 285 and 315 new restaurants. Looking ahead to 2025, they aim to open between 315 and 345 new locations, with most including a Chipotlane.