(Reuters) -Chipotle Mexican Grill topped market estimates for quarterly sales on Tuesday, as Americans ordered more of its burritos and rice bowls despite menu items getting pricier, underscoring its resilience in a choppy macro environment.
Shares of the California-based company were up about 3% in extended trading.
While the U.S. restaurant industry has seen customer traffic weaken in the past few months, Chipotle has bucked the trend thanks in part to its higher-income customer base that was relatively less impacted by persistent inflation.
Data from Placer.ai showed traffic at Chipotle’s U.S. locations climbed 2.6% in October and strengthened further to end the quarter with a 5.5% jump in December alone, while the overall fast-food industry saw visits drop 1.6% on average.
That, even as Chipotle raised menu prices by 3% in October after a long pause. While price hikes helped boost sales by increasing average order values, improvements to store efficiency further helped attract more customers.
Chipotle noted customer transactions in the quarter ended Dec. 31 were 7.4% higher from a year earlier, while average amount spent per order rose 1%.
While Chipotle saw higher costs for some ingredients like beef and queso, costs of other commodities like paper and some vegetables have moderated in recent months, helping prop up margins at the company.
It reported restaurant level operating margin of 25.4% in the fourth quarter, up from 24% a year earlier.
Comparable sales at the restaurant chain rose 8.4% in the quarter, beating analysts’ average estimate of a 6.96% increase, according to LSEG data.
The company said it expects comparable restaurant sales growth in the mid-single digit range for 2024, compared with analysts’ average estimate for a 5.34% increase.
It also plans to open 285 to 315 new restaurants this year.
(Reporting by Deborah Sophia in Bengaluru; Editing by Shilpi Majumdar)
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