Chipotle Mexican Grill Inc., a burrito chain that’s defying a broader restaurant slowdown, approached a $700 stock price for the first time on signs that third-quarter sales are growing faster than expected.
Same-store sales are climbing 19 percent to 20 percent this quarter, lifted by higher foot traffic, an increase in prices and a push into catering, Steven Gojak, an analyst at Cleveland Research Co., said in a report Thursday. Analysts on average have predicted growth of about 15 percent in the period, according to data compiled by Bloomberg.
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“Traffic trends have held fairly steady so far in the third quarter and we do not believe there has been any meaningful pushback on the company’s recent menu price increase,” the Cleveland-based analyst said in the report.
Younger diners are flocking to the Mexican chain in search of healthier options and the ability to customize their meals. Chipotle, based in Denver, also has been adding catering services to its stores and accelerating new restaurant growth to help boost sales. Last month, the chain reported second-quarter earnings that topped analysts’ estimates, while revenue rose 29 percent to $1.1 billion.
The stock rose as much as 2.9 percent to $697.93 in New York, marking a record intraday high. The shares advanced 0.6 percent to $682.26 at 2:06 p.m. in New York.
Chipotle had climbed 27 percent this year through yesterday, compared with a 0.3 percent decline for the Standard & Poor’s 500 Restaurants Index, which includes chains such as McDonald’s Corp. and Darden Restaurants Inc.
Chipotle, which has about 1,680 restaurants, recently raised U.S. menu prices by 6.25 percent to 6.5 percent, on average. The company is seeing higher costs for key ingredients including beef, avocados and dairy.
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