Chipotle sales rise - but analysts fear US slowdown
23 July, 2012
Leading Mexican chain Chipotle has reported more strong sales growth in the second quarter of the year—but its figures were below some analysts’ expectations, prompting concerns about a possible slowdown in consumer spending in the US.
Chipotle said revenue increased 20.9% to $691m in the quarter to end-June, with comparable sales up 8%. It opened 55 new restaurants in the period to take its total to 1,316. Chipotle said it was on course for between 155 and 165 new openings and mi-single digit comparable growth for the year as a whole.
But the figures were slightly behind the double-digit second quarter growth forecast by several analysts, leading to a fall in its share price in the days after the figures were unveiled. Chipotle is often seen as a bellweather for the US restaurant sector, and some commentators think the figures reflect a softening of the market. Ken Perkins, president of research agency Retail Metrics, told Reuters: “Consumer confidence is down and this is despite a rebound in housing, falling gas prices. Consumers are very cautious right now.” Analyst Malcolm Knapp added: “It’s a squeezed consumer. If they spend a lot on retail, they spend less on restaurants. They can’t do everything.”
Chipotle itself—like some other analysts—was bullish about the figures. Steve Ellis, founder, chairman and co-CEO, said: “We are pleased that our continued focus on improving the quality and taste of our food, along with strengthening our people culture, has led to a better dining experience for our customers, and ultimately better financial results for our shareholders.