Holy guacamole! Chipotle at all-time high
The fast casual Mexican food restaurant chain's stock soared after reporting strong earnings
It was a happy taco Tuesday (on a Wednesday) for Chipotle investors. One might even call it a burrito bonanza. Or fajita frenzy. (Yes. I’m a sucker for alliteration.)
Shares of Chipotle surged 14% to a new record high of above $2,000 after the company reported earnings that topped forecasts following the closing bell Tuesday. Total revenue surged 17% from a year ago while same-store sales, which measure how well locations open at least a year are doing, were up nearly 11%. What’s more, digital sales now account for almost 40% of total food and beverage revenue. That’s a lot of people placing mobile orders for chips and guac!
Chipotle is clearly benefiting from the fact that many busy consumers love to place orders on the Chipotle app and pick them up on the go for a convenient family dinner. (My wife, kids and I typically get Chipotle once a week. I’m a big fan of the quesadillas.)
Interestingly, Chipotle chief financial officer Jack Hartung said on an earnings call with analysts that while more middle class and affluent consumers were continuing to spend heavily at Chipotle, lower income customers were also flocking back to Chipotle.
This could be a sign that the company’s food, despite price increases last year and continued worries about inflation, is still viewed by many diners as a good value. (Chipotle did say that lower avocado prices helped but that it still faced higher costs for dairy, tortillas, salsa, beans and rice.)
Still, Chipotle’s not the only food and beverage company thriving even as many Americans are grappling with sticker shock for just about everything. Shares of another fast food chain, Wingstop, also hit a record high Wednesday. So did energy drink maker Monster Beverage. And both Coca-Cola and Pepsi are each trading near 52-week highs following their recent solid earnings.
Eat, drink and be merry indeed.