Chipotle Jumps After Raising Outlook on Brisk Diner Traffic

(Bloomberg) -- Chipotle Mexican Grill Inc. lifted its full-year outlook as limited-time offers such as chicken al pastor helped boost demand, continuing a streak of positive results as other chains struggle to boost diner traffic.

Most Read from Bloomberg

• US Economy Slows and Inflation Jumps, Damping Soft-Landing Hopes

• Malaysia in Talks With Tycoons on Casino to Revive $100 Billion Forest City

• Biden’s Gains Against Trump Vanish on Deep Economic Pessimism, Poll Shows

• How to Get a Meeting With the UAE’s $1.5 Trillion Man

• Zuckerberg Asks for Patience as Meta’s AI Push Spooks Market

The shares rose as much as 5% on Thursday in New York trading, extending a nearly six-month rally that’s seen the stock surge about 66%.

The burrito chain now expects same-store sales — a metric tracking restaurants open for more than a year — to rise by as much as a high-single-digit percentage. That’s up from the prior expectation of a mid-single-digit increase.

Diner traffic at Chipotle has increased in recent quarters, and its customer growth outpaced that of fast-casual rivals in the first three months of the year, according to research firm Placer.ai. That, along with the company’s financial results, are setting a high bar for the industry. Some limited-service chains such as McDonald’s Corp. have struggled to keep guest counts high amid rising prices and boycotts in the Middle East. McDonald’s will be the next major restaurant company to report results on April 30.

Chipotle’s same-store sales rose 7% in the first quarter, exceeding the average analyst estimate. Revenue of $2.7 billion was slightly higher than expectations, with sales buoyed by growth in transactions and bigger check sizes, as well as speedy preparation times for customer orders.

The company brought back its popular chicken al pastor limited-time offer last quarter, which some analysts had pegged as a sales driver. Its braised beef barbacoa also helped, the company said Wednesday.

“Chipotle is one of the few restaurants driving consistently strong traffic,” according to Jake Bartlett, an analyst with Truist Securities. He attributed the performance to a “strong value proposition” as well as effective marketing and speedy service.

--With assistance from Joel Leon.

(Updates share trading and adds analyst comment)

Most Read from Bloomberg Businessweek

• US White-Collar Job Growth Stalls, Even in Pandemic Boomtowns

• Caught Between the US and China, a Powerful AI Upstart Chooses Sides

• A Hedge Fund Billionaire’s Cash Helped Fund a ‘Predatory’ Lender

• Studio Behind Dune Eyes Growth, Even Without a Paramount Merger

• Big Junk Food’s Campaign to Get You Eating Doritos and Oreos for Dinner

©2024 Bloomberg L.P.