Chipotle’s New CEO Gets a Welcome Gift With Sales Exceeding Estimates

• April 25 2018
• Leslie Patton

Chipotle’s new top executive got some breathing room to overhaul the burrito giant.

Chipotle’s new top executive got some breathing room to overhaul the burrito giant.

Chipotle Mexican Grill Inc. reported first-quarter same-store sales on Wednesday that topped analysts’ projections, just seven weeks after Taco Bell’s former chief executive officer, Brian Niccol, took the helm. The results sent the shares up as much as 10 percent in late trading in New York.

The chain announced a change to its management last year -- longtime leader and founder Steve Ells would step down as CEO, though remain chairman. Now investors are tuned in to how Niccol plans to reverse a prolonged slump following E. coli and norovirus outbreaks, along with a number of other issues including a hacker attack.

“While the company made notable progress during the quarter, I firmly believe we can accelerate that progress,” Niccol said in a statement. “This path to performance will be grounded in a strategy of executing the fundamentals while introducing consumer-meaningful innovation.”

Same-store sales, a closely watched measure, climbed 2.2 percent in the first quarter. Analysts estimated an increase of 1.3 percent, according to Consensus Metrix. The company reiterated its guidance for low-single digit growth in comparable sales for this year.

Chipotle stock rose as high as $375 in after-hours trading in New York. The shares had already gained 17 percent this year through Wednesday’s close.

Results were helped by higher average check at Chipotle’s restaurants, which included the benefit of menu price increases taken during the past year, the company said. Revenue was $1.15 billion, matching projections.

The company’s board also approved spending up to $100 million for share buybacks.