A Lot of People Bought Chipotle Last Quarter
A lot of you have been eating Chipotle lately. Lots. The fast-casual burrito chain posted a 26 percent hike in second quarter profits and same-store sales (or locations open at least a year) are up 17.3 percent. And that was after the first price hike at the company in three years. But who is buying all that Chipotle? Millennials, says founder Steve Ells.
Never mind that in April, the chain announced menu price hikes for the first time in about three years. Sure, that helped drive up the comp-store sales numbers that boosted the size of the average check. But more important, says Ells, was a jump in traffic during the period. Consumers, particularly Millennials, are attracted by its healthier food offerings and relatively modest prices. And the chain, increasingly, has pushed its catering business, too.
The better-than-expected results prompted Chipotle to boost its full-year same-restaurant sales forecast, and its shares rose almost 10 percent in after-hours trading to $648.80.
Chipotle is known for serving antibiotic-free meats and organic produce, which appeal to trend-setting teen and young adult diners. Investors love the chain because its restaurants crank out more and more sales without increasing costs.
And it would appear that these same Millennials are very patient people who will wait in long lines to eat their Chipotle. From Bloomberg Businessweek:
Chipotle restaurants posted an increase of eight transactions during peak lunch hours and eight additional transactions during peak dinner hours compared to last year. Co-CEO Monty Moran credited improved speed, saying during Monday's earnings call: "These are customers that might easily walk away from our long lines to dine elsewhere except that they know that our excellent teams are geared up and ready to serve them a delicious meal quickly."
Chipotle. It's what's for Millennials' lunch.
[Image via AP]