By Nivedita Balu
(Reuters) – Chipotle Mexican Grill Inc <CMG.N> on Wednesday posted an 18.6% drop in quarterly profit, hurt by higher beef prices, delivery costs and coronavirus-related expenses. Shares of the company, one of the best performers in the restaurant sector following a 60% rise this year, were down more than 6% after the closing bell.
Still, the burrito chain reported a three-fold jump in online sales, as consumers stuck at home ordered more healthy meals and salads and favored delivery and mobile pick-up orders instead of dining inside restaurants.
Comparable sales rose 8.3%, beating Wall Street expectations of a 7.59% rise, according to IBES data from Refinitiv.
Net income fell to $80.2 million, or $2.82 per share, for the third quarter from $98.6 million or $3.47 per share, a year earlier.
Chipotle brought back its popular carne asada option mid-September, helping comparable sales during that period grow in the mid-single digits, Chipotle said, adding that the trend continued through October.
The chain charged an extra $1 for its carne asada this year, compared with the 50-cent premium it charged when it launched in 2019 as a limited-time offering, according to Cowen analysts.
It also raised menu prices for delivery items. Even so, elevated beef prices cut into operating margins.
Restaurant level operating margin was 19.5% for the quarter, a decrease from 20.8% from a year earlier, also hurt by fewer sales of beverages.
(Reporting by Nivedita Balu in Bengaluru and Hilary Russ in New York; Editing by Anil D’Silva and Lisa Shumaker)
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