Chipotle Misses on Earnings, Sees Slowing Sales Growth
Chipotle Mexican Grill's earnings missed expectations for the third quarter and the fast-food chain forecast slowing sales and potentially higher food costs in 2013.
Following the earnings announcement, shares of the Mexican chain fell more than 10 percent in extended hours trading. (Click here to get the latest quotes for Chipotle.)
Chipotle anticipates mid-single digit comparable restaurant sales growth for the full year, but sees only flat to low-single digit sales growth in 2013.
With sales growth decelerating, a pickup in food inflation could put pressure on margins, the company said on the call. Chipotle said food inflation so far has been 2.5 percent, which is better than expected as a strong avocado harvest offsets higher meat costs.
But food inflation may reach mid-single digits next year, which could force it to put up menu prices, the company said on the call.
For the third quarter, Chipotle's earnings rose 20 percent to $2.27 a share from $1.90 a share a year earlier. Wall Street was looking for earnings of $2.30 a share, according to a survey by Thomson Reuters.
Revenue rose 18 percent to $700.5 million, as comparable restaurant sales increased 4.8 percent. Same-store sales growth will slow in the fourth quarter, Chipotle said on its conference call.