By Lisa Baertlein
Oct 17 Chipotle Mexican Grill Inc on
Thursday said better-than-expected sales at established
restaurants boosted quarterly profits and signaled it may raise
prices in the middle of 2014 to offset higher food costs,
sending shares up 7.7 percent.
The fast-growing burrito chain has been reluctant to
increase menu prices despite higher costs for ingredients such
as California avocados and salsa. Executives said they first
want to secure ample supplies of natural meats and switch to
cooking oil and tortillas that do not contain genetically
modified organisms (GMOs).
Chipotle's sales at restaurants open at least 13 months, a
closely watched gauge of industry performance, were up 6.2
percent for the latest quarter, more than the average analyst
estimate of 4.7 percent compiled by Consensus Metrix.
Executives from the Denver-based chain said visits to its
restaurants increased when its animated film and arcade-style
game about sustainable food production went viral on Facebook,
Twitter and YouTube.
Chipotle was the first major U.S. restaurant chain to
disclose which of its ingredients contain GMOs - which are
becoming increasingly controversial as more diners seek
information about what's in the food they eat.
Third-quarter net income at Chipotle increased 15 percent
from the year earlier to $83.4 million, or $2.66 per share. That
fell short of analysts' average estimate of $2.78 per share,
according to Thomson Reuters I/B/E/S, as higher food, labor and
rent costs squeezed margins.
Chipotle narrowed its full-year forecast for same-restaurant
sales to mid-single-digit percentage growth. The Denver-based
chain previously said it expected low- to mid-single-digit
percentage same-restaurant sales growth for 2013.
For 2014, it forecast low single-digit percentage growth,
excluding menu price increases.
Analysts say Chipotle needs mid-single-digit percentage
growth of same-restaurant sales to protect profits.
Shares of Chipotle gained $33.72 to $472.79 in after-market