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The company reported adjusted earnings for its fiscal fourth quarter of $7.02 a share, beating the FactSet consensus estimate of $6.32, and reported revenue of $1.95 billion, above the consensus estimate of $1.94 billion.

Chipotle’s third-quarter net income was $204.4 million, or $7.18 per share, up from $80.2 million, or $2.82 per share a year earlier.

The chain announced in June that menu prices would rise by roughly 4% to cover the cost of hiking restaurant workers’ wages to an average of $15 an hour.

The company said beef and freight costs were higher, but menu price hikes offset the impact of those increased expenses.

In a call with investors Thursday evening, company executives said they aren’t sure whether the cost increases are temporary. They added that they believe Chipotle has pricing power over its competitors.

“When you look at our pricing versus other restaurant companies for the quality of the food, the quantity the food and the quality and convenience of the experience, we offer great value,” said Chief Financial Officer Jack Hartung in the call.

Chipotle hasn’t been shy about raising prices in the past, and said it expects labor and price cost increases to continue.

Digital sales increased by 8.6% after more than tripling a year ago. The company opened 41 new restaurants during the quarter. Five of those locations did not include a “Chipotlane,” a drive-thru lane designated for picking up digital orders.

Write to Logan Moore at [email protected]’s.com

Source : https://www.barrons.com/articles/chipotle-beat-earnings-estimates-as-menu-price-hikes-offset-rising-costs-51634851135

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