Chipotle reported fourth-quarter earnings and revenue on Wednesday that exceeded analysts’ expectations, owing to rising foot traffic and increases in menu price, according to CNBC news.
The company’s shares climbed 10 percent in after-hours trading on Wednesday.
In a statement, CEO Brian Niccol said that he is very pleased to report strong quarterly results with 6.1 percent comparable sales growth of restaurants including 2 percent transaction growth.
As reported in CNBC, Chipotle’s stock had its best year since 2013 with shares jumping up to 50 percent, thanks to the CEO’s popularity with investors.
Niccol, who earlier led Yum Brands’ Taco bell, took the reins a year ago and has been focused on pushing digital and marketing investments and improving Chipotle’s food delivery through promotions to bring it back to stable growth. In addition, the company has been transforming the restaurant experience with new technology.
On Wednesday, Chipotle reported earnings of $1.72 per share, crushing Wall Street estimates of $1.37 per share. According to Refinitiv data, the company revenue recorded $1.23 billion, much better than the analysts forecast of $1.194 billion.
In the fourth quarter, the digital orders jumped 65.9 percent, representing 12.9 percent of sales or $158.6 million in revenue. To meet the growing digital orders, the company is updating its kitchens with a second assembly line, only for those orders. It has more upgrades including pickup shelves for displaying online orders which are already installed in 1000 of its restaurants.
Chipotle is also testing ‘Chipotlanes’, drive-through windows which enable customers to pick up their online orders. So far, 10 locations have Chipotlanes which are helping both digital and overall sales, according to Niccol, but it is still in the testing phase.
In December, the company offered free delivery during the College Bowl season and even gave away ‘guacamole’ for free to those who ordered through Chipotle’s app on ‘National Avocado Day’. These promotions and partnership with food-delivery services such as Postmates and Doordash helped digital share climb around 66 percent in the fourth quarter, while the previous quarter recorded an increase of 48 percent.
The burrito chain reported fiscal fourth-quarter net income of $32 million or $1.15 per share, slightly declining from a year earlier which reported $43.8 million, or $1.55 per share.
This year, Chipotle is planning for modest price increases, which will be lower than the previous increases. Further, it announced to spend to spend nearly $100 million to buy back its shares.