By Granth Vanaik
(Reuters) -Chipotle Mexican Grill raised its full-year sales forecast on Wednesday, on the back of resilient demand for its burritos and rice bowls despite higher menu prices.
Shares of the company were up 3% at $3,015 in extended trading. They breached the $3,000 mark for the first time after the company approved a 50-for-1 stock split last month.
Chipotle (NYSE:CMG) has seen an increase in foot traffic at its stores even in the face of sticky inflation that has constrained consumer spending on everything from apparel to dining out.
"From low to middle to higher-income consumers, we're just seeing gains with all income cohort," said CEO Brian Niccol on a post-earnings call.
The company expects comparable restaurant sales growth of mid-to-high-single digit percentage for 2024, versus its previous projection of mid-single digit growth.
Data from Placer.ai showed that Chipotle saw visits increase by 10% year-over-year in the first quarter, ahead of the 4.1% growth seen by the fast-casual segment.
"Chipotle is well positioned for this economic environment," said Emarketer analyst Blake Droesch. "Its success is a bellwether for the fast-casual space."
In order to drive more customer orders, the restaurant chain also brought back its popular chicken al pastor dish to its menus across North America and Europe during the quarter for a limited time period.
The restaurant chain's comparable sales rose 7% in the first quarter, compared with estimates of a 4.97% increase.
Chipotle has undertaken price hikes to shield its profit margin against higher costs of ingredients such as beef and avocados.
The company also saw wages increase by almost 20% in California in April, following a law that boosted minimum wage to $20 an hour for fast-food workers.
"We subsequently took a 6% to 7% menu price increase in our California restaurants just to cover the cost in dollar terms," CFO John Hartung said on the call.
Chipotle's restaurant level operating margin rose to 27.5% in the quarter ended March 31, from 25.6% a year ago.
Its first-quarter adjusted profit came in at $13.37 per share, above estimates of $11.68.