Earnings Results: Chipotle stock drops nearly 9% after earnings as company says inflation hit popular menu items

by | Jul 26, 2023 | Stock Market

Chipotle Mexican Grill Inc. shares nearly 9% in the after-hours session Wednesday after the fast-casual restaurant chain beat Wall Street expectations for its quarterly profit but called for a slightly weaker current quarter and said that inflation hit some of its most popular menu items. Food, beverage and packaging costs were lower in the second quarter than a year ago, benefiting from price increases the company took last year and from lower avocado prices, Chipotle said.

Those were offset in part by “by inflation across several food costs, primarily beef, tortillas, dairy, salsa, beans and rice,” the company said. In a call with analysts after the results, Chief Executive Brian Niccol said the company plans to focus on growth in the number of transactions. Chipotle executives also teased a new menu item after its chicken al pastor special item ends its run in late August. Chicken al pastor helped Chipotle navigate inflation because it shifted people away from more expensive, higher food-cost steak, so the company experienced a “low-grade inflation,” Niccol said in the call. Asked by an analyst if chicken al pastor could become a “permanent” menu item, Niccol said Ch …

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