Business

Chipotle shares set a record when customers return to their meals

Chipotle Mexican Grill Of a corporation

CMG 11.54%

Shares hit a record high on Wednesday as the burrito chain expressed confidence in growth and said customers were returning to the dining room to eat out despite rising menu prices.

The company said its quarterly sales, which ended in June, exceeded the same period before the pandemic, with more people eating out again, especially at lunch.

“I was very surprised to see how quickly consumers appeared,” Chipotle CEO Brian Niccol said on Tuesday.

Chipotle’s share price rose nearly 12% to $ 1,755.99 on Wednesday. Earlier in the session, stocks hit a record high of $ 1,778.29. Chipotle shares, which have been trading for over 15 years, have risen by more than 50% over the past year.

Investors are watching carefully Consumers are returning to restaurants Inflationary pressures causing more expensive and potentially hesitant eating out associated with the highly contagious delta mutant of Covid-19.

Chipotle raised the price of the menu by about 4% earlier this year, but the chain said there was no customer backlash from the price hike. The price increase helped cover the higher wages of workers, the company said.

Some analysts thought of the burrito chain as follows: Pandemic winner Given the delivery and investment in online orders before the virus surged. Online orders now account for almost half of the company’s sales, but the chain has also reopened all dining rooms.

Chipotle said it plans to build at least 200 new restaurants this year, repeating its long-term goal of 6,000 locations across North America.

Studies show that many consumers are ready to eat out again. According to a survey by industry research firm Revenue Management Solutions, the number of customers who reported eating out at restaurants in May at least once a week increased by 20% compared to February. Studies show that older consumers, who were more hesitant to go out early in the pandemic, contributed to the largest increase in the number of people eating out again.

Olive Garden-Owner

Darden Restaurant Co., Ltd.

Last month, it said May same-store sales were above 2019 levels for the brand as a whole. The company has benefited from strong demand, with fewer competitors after other restaurants closed last year, executives said.

Chipotle sales fell early in the pandemic, but the ability to keep selling takeaway food helped buffer the sudden losses experienced by the seating chain.

Higher menu prices helped pay the wages raised by Chipotle Average $ 15 per hour Last month, he fought to hire a rare worker. The company didn’t rule out further price increases, but management wants to see how inflation in the broader US economy will unfold in the coming months.

Write to Heather Haddon heather.haddon@wsj.com

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On July 22, 2021, it appeared in the print version as “Chipotle says Diner is eating out again.”

Chipotle shares set a record when customers return to their meals

Source link Chipotle shares set a record when customers return to their meals

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