(Reuters) – Chipotle Mexican Grill Inc beat Wall Street estimates for quarterly revenue and profit on Wednesday, as the restaurant chain’s marketing efforts and aggressive investments in online ordering and deliveries attracted more customers.
FILE PHOTO: The logo of Chipotle Mexican Grill is seen at the Chipotle Next Kitchen in Manhattan, New York, U.S., June 28, 2018. REUTERS/Shannon Stapleton
Shares of the company were up 1 percent to $717 in extended trading. They have more than doubled in value in the past year, rising about 63 percent since the beginning of 2019.
The company has rolled out ad campaigns that showcased the fresh ingredients in its tacos and burritos and launched a loyalty program in March as Chief Executive Officer Brian Niccol rebuilds the company’s image after a series of food-safety lapses.
“Customer engagement and visits are increasing as a result of compelling marketing message, more convenient access, including delivery and strong operations,” Niccol said on a post-earnings call.
The company’s rewards program has signed up 3 million members since its launch, while it ran a “Free Delivery bowl” promotion through December to early January.
“Chipotle rewards will be a key element that will provide topspin to our digital system,” Niccol said.
Sales at Chipotle restaurants open for at least 13 months jumped 9.9 percent in the first quarter, breezing past analysts’ average estimate of a 7.29 percent increase, according to IBES data from Refinitiv.
The upbeat results also prompted the company to raise its full-year comparable sales growth forecast to mid-to-high-single-digit, from the prior expectations of mid-single-digit growth.
Chipotle is also ramping up its online presence.
The company’s relaunched website is attracting 1 million transactions a week on average, while digital sales more than doubled in the quarter, aided by its partnership with third-party delivery services such as DoorDash.
Chipotle’s digital efforts and marketing are resonating among customers, Gordon Haskett analyst Jeff Farmer said.
Excluding items, Chipotle earned $3.40 per share, topping estimates of $3.01 in the three months ended March 31, while revenue rose nearly 14 percent to $1.31 billion, beating expectations of $1.26 billion.
Reporting by Aishwarya Venugopal in Bengaluru; Editing by Arun Koyyur, Sriraj Kalluvila and Peter Cooney