Chipotle profit rises but sales growth slower than expected

AP News
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Posted: Apr 21, 2015 4:34 PM
Chipotle profit rises but sales growth slower than expected

NEW YORK (AP) — Chipotle reported a higher profit for its first quarter as price hikes help drive up sales, but it wasn't enough to satisfy investors.

The Denver-based chain said sales rose 10.4 percent at established locations, falling short of the 11.7 percent Wall Street expected, according to analysts polled by Thomson Reuters. The sales growth was also a slowdown from the 16.1 percent increase in the previous quarter.

Its stock fell 4.6 percent to $660.74 in after-hours trading.

Steve Ells, co-CEO of Chipotle, noted in a statement that the company was dealing with the suspension of a major pork supplier during the period. The chain had said in January that it was no longer serving carnitas in about a third of its restaurants as a result of an animal welfare violation it uncovered during a routine audit.

The company has not said when it expects supplies to be completely recovered. A spokesman for the company, Chris Arnold, has said that pork accounts for 6 to 7 percent of entree orders.

For the quarter, Chipotle Mexican Grill Inc. said it earned $122.6 million, or $3.88 per share. Analysts on average expected $3.61 per share.

A year ago, it earned $83.1 million, or $2.64 a share.

Total revenue, which was boosted by 49 new store openings during the period, was $1.09 billion. That fell short of the $1.1 billion analysts had forecast, according to Zacks Investment Research.

The company, which has about 1,800 locations, said it still expects sales at established locations to rise in the low- to mid-single digits for the year.