Biz/Tech

Chipotle Expects Sales to Slow in 2015 despite Q3 Sales Boost

Oct 20, 2014 10:19 PM EDT | By Staff Reporter

Chipotle Mexican Grill predicts a decline in sales in the coming year despite the reported growth in restaurant sales in the recent quarter.

Chipotle bested fast-food rivals according to the Standard & Poor's 500 Restaurants Index this year, reporting a 19.8 increase in comparable restaurant sales and a 23 percent advance in the stock market-the biggest gain in the S&P 500 Restarurants Index, according to Bloomberg.

Furthermore, the fast food chain's Q3 net income also rose 57 percent to $130.8 million ($4.15 per share) from $83.4 million ($2.66 per share) in 2013. Revenue also advanced 31 percent to $1.08 billion-surpassing analysts' estimate of $3.83 per share and a projected revenue of $1.06 billion.

The increasing demand for healthier and customizable meals reportedly led to the boom in sales of Chipotle. Same store sales increased 20 percent last quarter-topping the 24 percent predicted same-store sales by Consensus Matrix.

Chipotle recently increased its food prices by 6.5 percent in all of its 1,700 restaurants located across the country, in lieu of increasing food cost for major ingredients like avocados, beef and dairy.

Chipotle is reportedly prioritizing higher food quality than ease of preparation and low-cost. "You cannot take shortcuts. We've shown that we can spend more on ingredients, not less, and charge a fair price, CEO Steve Ells said, indirectly lashing out on unnamed rivals.

Aside from that, Chipotle would reportedly be seeing more spending more on labor because about 10,000 employees are now enrolling in health-care insurance, according to Chief Financial Officer Jack Hartung.

While sales slid 4.4 percent to $624 after the announcement was made, the company is still planning on putting up 190-205 more stores next year.

Meanwhile, other fast food rivals have also reported a jump in the stock market, with McDonald's having a 0.6 percent increase while Wendy's reported a 0.72 percent jump-but none compares to the huge leap of Chipotle at 1.76 percent.

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