Chipotle posts highest profit margins since 2015
Chipotle Mexican Grill on Tuesday announced its highest profit margins since 2015.
Restaurant-level operating margins were 24.5% for the second quarter ended June 30 – the highest for Chipotle since it was hit by a food security crisis six years ago – and a increase from 12.2% for the same period a year ago, the company said.
“The improvement is mainly due to the leverage effect of comparable restaurant sales, including increases in menu prices, lower promotional activity as well as lower beef prices, partially offset by higher costs associated with new menu items, second quarter month wage inflation and lawyers, “Chipotle said in a statement.
Chipotle recently increased its menu prices by around 4%, after increasing delivery order prices by an average of 13%.
Chipotle’s margins had suffered in recent quarters due to the high cost of delivery transactions.
Second-quarter fast casual revenue climbed 38.7% to $ 1.9 billion. Same-store sales were up 31.2% from the same period last year, a period in which the country was still in the midst of the pandemic.
The Newport Beach, Calif., Chain, said in a statement that it expects its same-store sales for the third quarter to be in the “low to mid-double-digit range.”
Chipotle, which has already announced plans to open at least 200 units this year, opened 51 net new restaurants (including five closures) during the quarter for a total number of stores of 2,853. 56 new restaurants in total included a Chipotlane. Over 70% of Chipotle’s new restaurants this year will have the early order pickup route.
In the last quarter, Chipotle opened 40 new restaurants, 26 of which included a Chipotlane.
Digital sales edged down as a percentage of all transactions from the previous quarter, to 48.5% of sales, as more customers return to restaurant transactions. Just over half of those digital sales came from higher margin order transactions. The chain has around 23 million members in its loyalty program.
On-site restaurant business has rebounded by around 70% as the pandemic abates and the chain latched onto around 80% of its digital sales gains from 2020, CEO Brian said on Tuesday. Niccol to analysts.
“We’re seeing more business at lunch,” Niccol said. “We are starting to clearly see people returning to work or resuming normal behaviors throughout the day. The lunchtime opportunity is definitely coming back as we grab onto all of these new opportunities around dinner.