Shares of Chipotle Mexican Grill jumped 10 percent on Wednesday after the company posted better-than-expected earnings after the closing bell.
The company said that higher menu prices, which it began to institute last April, helped boost ticket averages. Chipotle initiated the final wave of these price hikes in January, bumping up prices by 5 to 7 percent in markets that did not already see increases in 2017.
Chipotle saw a 4.9 percent benefit from these menu hikes during the quarter, which was partially offset by fewer transactions in its restaurants.
Chipotle said that net income in the first quarter rose to $59.4 million, or $2.13 per share, up from $46.1 million, or $1.60 per share, in the year-earlier period. Analysts had expected Chipotle to report earnings of $1.57 per share, according to Thomson Reuters.
Total revenue climbed 7.4 percent to $1.15 billion, in-line with analyst expectations.
Same-store sales for the quarter were up 2.2 percent, higher than the 1.3 percent analysts had expected, according to StreetAccount.
Wednesday’s earnings report marks the first time that CEO Brian Niccol will address Chipotle investors. Niccol left his post as CEO of Taco Bell to take over the beleaguered burrito brand, inheriting a company that has suffered from a three-year sales slump.
The hope is that Niccol, who came to the restaurant industry with an engineering degree, an MBA in business and a 10-year stint at consumer products giant Procter & Gamble, can revitalize the brand.
Niccol has a reputation for marketing and technology innovation, two key areas that have not been a top priority for Chipotle. At Taco Bell, he introduced mobile order and pay, repositioned the Mexican chain as a lifestyle brand and pushed for more ingenuity in the kitchen.
Niccol joined the Chipotle team on March 5.
While Niccol’s vision will not be reflected in Wednesday’s results, investors are eager to hear about his plans for the brand going forward. Particularly, under the shadow of Steve Ells, the ex-CEO and founder of the company, who has stayed on with the company as executive chairman.
Chipotle maintained its outlook for 2018, which calls for same-store sales to rise at a low-single digit pace. It also expects to open between 130 and 150 new stores.