Chipotle blows by earnings estimates as resilient foot traffic, margin expansion boost Q1 results

Chipotle rang up another bowl of positive earnings on Wednesday afternoon.

For its first quarter, revenue grew 14.1% to $2.7 billion, with same-store sales jumping by 7%, higher than estimates of 5.13%. The company also beat expectations on the bottom line, with adjusted earnings per share coming in at $13.37, compared to estimates of $11.66.

Shares rose 3% in after market trading.

Limited-time offers like Braised Beef Barbacoa and Chicken al Pastor, which are priced at a premium, boosted results against a difficult macro consumer backdrop. The chain saw a 5.4% increase in foot traffic, but the average check was only up 1.6%, lower than the 2.0% expected.

CEO Brian Niccol called the quarter “outstanding,” with improvement in store throughput and successful marketing initiatives. The results provides “confidence that we can achieve our long-term target of more than doubling our business in North America and expanding internationally,” he said.

In Q1, Chipotle opened 47 new restaurants, with 43 locations having its drive-thru feature Chipotlane. This year, it expects to open 285 to 315 new locations, with more than 80% of them having the drive-thru concept. Long term, it plans to operate 7,000 restaurants in North America (there are currently 3,500).

For 2024, the company expects sales growth of mid to high-single digits, up from the previous guidance of mid-single digit growth.

Prior to the results, Lauren Silberman of Deutsche Bank wrote in a client note that “Chipotle has been among the best-performing restaurant stocks.”

Chipotle’s operating margin expanded to 16.3%, up from 15.5% compared to a year ago, while restaurant level margins also jumped slightly, from 25.6% to 27.5%.

In its earnings call, Wall Street will be listening for updates regarding its automation efforts, such as its guacamole prep robot, Autocado. CEO Brian Niccol told Yahoo Finance that the machine is close to deployment.

“We’re already on like our third or fourth prototype [of Autocado], and now we’re like, OK, this is ready to go into a restaurant. I’m sure when we put it in the restaurant, we’ll learn something that might cause us to iterate one more time.”

Investors will also wait to hear how California’s FAST Act, which increased fast food wages to $20 per hour, impacted its business in the state. Analysts agreed that Chipotle is among the companies that have the brand power and fanbase to adjust to the change.

“I think brands who provide a lot of value and have good traffic are best positioned,” said Peter Saleh of BTIG, who pointed out that Chipotle’s chicken bowl averages $9 across the country, compared to $12 to $13 for many burger meals.

“They’ve built quite a bit of momentum in their business with respect to traffic,” Citi analyst Jon Tower told Yahoo Finance.

SAN RAFAEL, CALIFORNIA - APRIL 01: Workers help a customer at a Chipotle restaurant on April 01, 2024 in San Rafael, California. A new minimum wage law went into effect in California today that calls for fast food restaurants with at least 60 locations nationwide to pay employees a minimum of $20 per hour at their stores in California. (Photo by Justin Sullivan/Getty Images)

Workers help a customer at a Chipotle restaurant on April 01, 2024 in San Rafael, California. (Photo by Justin Sullivan/Getty Images) (Justin Sullivan via Getty Images)

In a client note written prior to the results, Sharon Zackfia of William Blair said about 14% of Chipotle’s total locations are in the Golden State, and she suspects Chipotle raised prices about 7% in the state to cover incremental labor cost pressure.

Here’s what Chipotle reported in Q1, compared to what Wall Street expected, according to Bloomberg estimates:

  • Revenue: $2.70 billion versus $2.67 billion

  • Adjusted earnings per share: $13.37 versus $11.66

  • Same-store sales growth: 7% versus 5.13%

  • Transactions growth: 5.4% versus 3.03%

  • Average check growth: 1.6% versus 2.00%

Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at

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