Chipotle's profit tops expectations as sales surge
DENVER (AP) — Chipotle reported a profit Monday that topped Wall Street expectations as sales continued to surge.
The Mexican food chain said sales rose 19.8 percent at restaurants open at least a year for its third quarter.
The better-than-expected performance comes as traditional fast-food chains such as McDonald's and Burger King have struggled to boost sales in the U.S. Chipotle has sought to set itself apart by marketing its ingredients as being superior, including with its "Food with Integrity" slogan. People also like that they can walk down a line and dictate the toppings that go on their dishes.
In a statement, co-CEO Steve Ells said people are "realizing there are better alternatives to traditional fast food," a trend he said he expects to continue.
But the company doesn't expect to maintain the same level of momentum. Looking ahead to 2015, Chipotle Mexican Grill Inc. said it expects sales at established locations to rise in the low- to mid-single digits.
Its shares fell 2.8 percent to $634.50 in after-hours trading. Shares of the Denver-based company have increased 22 percent since the beginning of the year, while the Standard & Poor's 500 index has risen 3 percent.
Chipotle, which has more than 1,700 locations, said its price increases helped offset its rising costs for ingredients including beef, avocados and dairy during the quarter.
For the three months ended Sept. 30, Chipotle said it earned $130.8 million, or $4.15 per share. Analysts expected $3.86 per share, according to Zacks Investment Research.
A year ago, the company earned $83.4 million, or $2.66 per share.
Revenue rose to $1.08 billion, also topping the $1.05 billion Wall Street expected.