CEO Brian Niccol’s tenure at the popular Chipotle Mexican Grill is off to a good begin. The company’s shares hiked 10 percent on Wednesday after the company posted better-than-expected earnings, on the back of price hikes that it started to institute in the last April.
The average check size increased 4.9 percent during the quarter, assisted by the higher prices. That partially was offset by fewer transactions in its restaurants. Chipotle started the final wave of increases in the month of January, bumping up costs by 5 to 7 percent in the markets that did not already see hikes in the year 2017.
The earnings report of Wednesday marked the initial time that Niccol addressed the Chipotle investors. He left his post as the CEO of Taco Bell to take over the beleaguered burrito brand, inheriting a company that has suffered from a three-year sales slump.
The expectation is that Niccol, who joined the company on 5th March, could revitalize the brand. He has got a reputation for marketing and technology innovation, the two main areas, which have not been a top priority for Chipotle. At the Taco Bell, he launched mobile order and pay, pushed for more ingenuity in the kitchen, and repositioned the Mexican chain as a lifestyle brand.
Niccol said that Chipotle would be targeting heavily on digital marketing and menu innovation. He told the investors that he would share more detail regarding the plans of Chipotle ahead of the second-quarter earnings report.
In the initial quarter, Chipotle said that the net income hiked to 59.4 million dollars, or 2.13 dollars per share, up from 46.1 million dollars, or 1.60 dollars per share, in the year-earlier period. The analysts had expected Chipotle to report earnings of 1.57 dollars per share.
The total revenue climbed up 7.4 percent to 1.15 billion dollars, in-line with the analyst expectations. The same-store sales for the quarter were up by 2.2 percent, higher than the 1.3 percent that the analysts had expected.