CEO Brian Nichols calls out where the company’s future growth will come from, In the earnings call. “Fortunately for Chipotle, you know, most of our customers are a higher household income consumer,” he said on the company’s earnings call. Niccol said that they focus the company on expanding Chipotle’s brand to not just a broader demographic but to higher-income consumers.
Chipotle is again raising prices in August, adding “at least 5-10 cents” to the cost of some items on its menu. With rising food, packaging, and labor costs, Chipotle is hiking prices in August. Chipotle has been facing higher food, packaging, and labor costs since the beginning of the year, and the company said it would hike prices again in August to offset the rising costs.
![Chipotle's price hike](https://www.fastmr.com/wp-content/uploads/2022/08/chipotle-price-hike-300x169.jpg)
Amid the weak sales, Chipotle said it would open more than 300 new locations this year, with plans to open more than 600 recent locations by 2022. Chipotle reported a 2% decline in revenue to $1.05 billion. Chipotle lowered its sales estimate by 1.8% and same-store sales by 2.6%. The burrito chain’s sales and profit growth in the second quarter looked modest, as it posted a comparable-store sales growth of 3.2% and a net income growth of 12.6%.
On Tuesday, Chipotle Mexican Grill reported weak sales as price increases boosted earnings but may have scared off some consumers who had grown weary of inflation. But the strong sales, buoyed by a price hike, could be a sign that the company’s customer base is shrinking.
This is a significant decline for a high-income customer base. However, the company has been able to offset this decline in purchases by increasing the number of its high-income customers, which has allowed the company to retain its average sales per customer.
Chipotle is a fast-food chain known for its fresh ingredients and fast service. The company has also said it would raise prices again in August.
Chipotle’s stock increased by more than 8% during extended trading.
According to a Refinitiv survey of analysts, the following discrepancy exists between what the firm reported and what Wall Street was anticipating:
EPS (Earnings per share): $9.30 revised vs. $9.04 expected
Revenue: $2.21 billion vs. $2.24 billion expected
Chipotle reported a second-quarter net income of $259.9 million, or $9.25 per share, up from $188 million, or $6.60 per share, a year earlier.
Excluding legal costs, restaurant closure expenses, and other items, the company earned $9.30 per share in the quarter that ended June 30, a decline from its earnings of $10.43 per share in the same period last year.
According to Street Account estimates, Wall Street was expecting same-store sales growth of 10.9%. According to the company’s earnings release, Chipotle’s net sales climbed 17% to $2.21 billion in the quarter.
Chipotle is one of the most popular fast-food restaurants in America. Chipotle executives said on the quarterly call that sales have slowed since May. About 15% of Chipotle locations are near colleges, and they have seen a return in traffic to pre-pandemic levels.
The company’s most recent quarterly earnings release reported that only 39% of transactions during the quarter came from digital orders. The company said its loyalty program has more than 29 million members.
Delivery orders fell slightly, which helped Chipotle’s margins. Many customers love the convenience of Chipotle’s delivery orders.
Chipotle is projecting that in the third quarter, same-store sales growth will be in the mid-to-high-single digits, including the planned price increases.
Chipotle announced that its board has approved spending an additional $300 million on share repurchases during the second quarter of 2022.