Chipotle sees stronger quarterly sales on higher prices, demand

(Reuters) – Chipotle Mexican Grill Inc on Tuesday forecast a rise in current-quarter comparable sales, betting that demand for its burritos and rice bowls would hold up even as decades-high inflation pinches consumer spending.

Shares of the California-based company jumped 6% in extended trading as it also said restaurant margins improved to 25.2% in the second quarter from 24.5% a year earlier.

It expects same-store sales to rise in the mid- to high-single digits in the third quarter, while analysts on average predict a 7.1% gain, according to Refinitiv IBES.

In a bid to boost sales, Chipotle has been launching new menu items such as the limited-time Mexican chicken dish pollo asado. The company is also doubling down on its digital business through its order-ahead drive-thru “Chipotlanes”.

The company has been bumping up prices for its menu items to offset higher costs of everything from paper to avocados.

(Reporting by Deborah Sophia in Bengaluru and Hilary Russ in New York; Editing by Devika Syamnath)