Chipotle Reports Record Third Quarter Sales
It was a record third quarter for Chipotle Mexican Grill.
Testing of new menu items, including a very popular smoked brisket LTO, coupled with strong digital sales and a resumption of restaurant meals led to a strong quarter for fast casual, with total sales of $ 2 billion. This figure is up 21.9% from the previous year, the channel reported Thursday for the three months ended September 30.
The Newport Beach, Calif., Operator reported a 15.1% same-store sales increase in the third quarter and said it expects similar results with same-store sales in the ” two-digit range “for the fourth quarter. .
Digital sales accounted for 42.8% of all transactions. In the last quarter, they accounted for 48.5% of all restaurant transactions, a number that has continued to decline as consumers increasingly return to restaurants. Digital sales, however, rose 8.6% year-over-year in the third quarter to $ 840.4 million.
Chipotle opened 41 new restaurants during the period, 88% of which included a Chipotlane with early order taking, a channel that has proven to be very profitable for the chain. It ended the quarter with 2,892 locations.
Chipotle is currently testing smaller footprint restaurants that include a Chipotlane, CEO Brian Niccol said when calling the results. These types of locations would potentially be located between two high volume units to provide customers with another access point.
For the quarter, Chipotle reported operating margins at the restaurant level of 23.5%, an increase from 19.5% in the same period last year. The burrito chain attributed the boost to leverage from increases in same-store sales, as well as increased menu prices. Higher wages and soaring beef and freight costs offset those gains.
In July, Chipotle reported its highest profit margins since its food security crisis in 2015. Those restaurant-level operating margins were 24.5% for the second quarter.
Niccol told analysts on Thursday that he expects the operating margins of those restaurants to increase by several more percentage points – he just doesn’t know when that might happen.
âWe still think that kind of margin is always at stake,â Niccol said. âIt’s really a workforce challenge. There is food inflation. We don’t know to what extent this is temporary or transient compared to permanentâ¦ We will be very patient.
Chipotle launched a smoked breast LTO a month ago. The new protein “resulted in incremental transactions” as well as higher control means, Niccol said. The success of the smoked brisket prompts the channel to end LTO later next month, a little earlier than expected.
âI guess we’re probably going to do some breast enhancement in the future,â Niccol said.