Chipotle’s second quarter sales smashed expectations, and the stock soared greater than 3% in after-hours trade and hit all-time highs.
The corporate reported that digital sales grew 99% in the course of the second quarter and accounted for more than 18% of total sales.
“We’re happy with our financial performance, which marks the sixth consecutive quarter of accelerating comps and displays continued progress on our key strategic initiatives,” CEO Brian Niccol said in a statement. “These strong outcomes have been delivered despite a harder year over year comparison and benefited from better restaurant operations, more effective advertising, and leveraging our digital make the line to grow sales and expand access.”
Because of the increase in avocado costs, Chipotle reported that food, beverage, and packaging prices have been 33.7% of total income, which was a 110 basis point increase from the identical period last year. The menu price partially offset these increases will increase throughout the U.S. at the end of 2018. On the conference call, the administration stated that avocado costs will seemingly keep elevated by July. However, margins will improve as soon as avocado costs stabilize. Additionally, on the conference call, Niccol defined that Chipotle doesn’t need to be overly aggressive with price increases, and due to this fact will keep menu price increases at 2%.
For the complete year, Chipotle boosted its same-store sales development outlook and now expects excessive single-digit same-store sales development, up from the previously anticipated mid-to single-digit range. Chipotle anticipates 140 to 155 new store openings in 2019.