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Chipotle Mexican Grill is hopeful a recovery in customer transactions early this year will continue to build in coming months, following a soft end to 2022.
Revenue in the fourth quarter, of $2.2bn, was up 11.2 per cent from a year ago and in line with analysts’ forecasts, but marked the third quarter in a row at that level.
Comparable restaurant sales, an important industry metric, rose 5.6 per cent in Chipotle’s fourth quarter. That was below Wall Street forecasts for about 7 per cent, and down from 15.2 per cent a year earlier.
“I think in December, people did pull back on going out,” chief financial officer Jack Hartung told the Financial Times, noting that US retail sales data for the period had also been weak. Chipotle’s sales transactions were down in the range of 3-4 per cent during the fourth quarter, he said.
However, comparable restaurant sales growth in January recovered to “the low-double digits”, prompting Chipotle to forecast growth in the current quarter in the “high-single digits”. That suggests a better outcome than the 5.5 per cent growth analysts have forecast.
“Our hope is that this is the new trend and we’re hoping any economic slowdown that comes either doesn’t come at all, or is shortlived,” Hartung said.
Chief executive Brian Niccol said staffing was “the best it has been”, with 90 per cent of Chipotle’s restaurants fully staffed. The company last month announced plans to hire 15,000 employees to help it cope with “burrito season” — a busy period running from March to May.
Despite wider debate about a possible recession in the US this year, Hartung said the company was still seeing few signs of its customers “trading down” to cheaper or smaller meals. He said there was a slight decrease in visits from customers whose household income is below $75,000, but that within this group, “almost 40 per cent” were coming to Chipotle more often, about 10 per cent were coming less often, and about 50 per cent were eating at home.
Chipotle’s earnings rose to $8.02 a share in the fourth quarter from $4.69 a year earlier, but missed Wall Street forecasts for $8.94.
Shares were down 4.7 per cent in after-hours trading on Tuesday.
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