Scott Boatwright, Chief Restaurant Officer at Chipotle joined Cheddar News to discuss performance in the third quarter. 

Chipotle Q3 Earnings Beat Expectations, Price Hikes Lift Revenue

to go through some of these numbers is scott. Boatwright Chipotle's chief restaurant officer scott. Good to have you here. So what really drove the numbers in the third quarter and some highlights, some investors who take away from this report here. Yeah. Hey, thanks for having me on this morning and good morning. Um, you know, we had a really solid quarter driven primarily by our digital channel at our end. Restaurant recovery are in restaurant business is up about 22% quarter over quarter, which tells us that consumer consumer behavior is trending back towards where we were pre pandemic, where people are just getting back to their normal routines and in the normal lifestyle, whether they're getting back into the office and those occasions are starting to come back and boost overall total sales in restaurant. What I find to be so interesting and this shows how loyal of a fan base and a customer base you have in October you guys raise prices for 1/4 time in about 700 locations. Is there an expectation here that you guys are going to continue to have to raise prices to really offset a lot of these higher costs we're seeing across the board. You know, we don't have any planned price increases in the calendar as of today. You know, we, we've experienced about 20% inflation and cost of goods over the last couple of years. And uh, and so our strategy has really been to try to offset some of the inflation's, we've, we've experienced over that same time frame and our consumers understand, I think too A large degree that there are macro level, um issues across the country that are affecting, you know what they do at home food, at home food out of the home and they're expecting some modest price increases. And I think we have such a strong value proposition here at chipotle that we have room to grow. I think Brian said on our call yesterday that most of our competitors are 10-30 percent higher in pricing than we are today. And I think that's an important note. I think what you get at Chipotle, if you think about the total value proposition is you get great variety, great abundance the food you want and crave and that's good for you at the speed at which your lifestyle moves. And I think that gives us a significant competitive advantage. Yeah, it doesn't even look like people stopped taking the avocado. It seems like people were still doing that. One interesting note here digital sales, those were down about 37.2% of revenue. That's what they accounted for. What are you sort of attributing to that drop? Are you guys at all worried about digital sales slowing because I know that's been an area of investment for you guys? Yeah, I think, I think what's happening here is the lower income income consumer is being a little more frugal about their spin and making different choices as it relates to how they're, how they're gaining access to their favorite brands. So I think what you're seeing is a little pushback or resistance on delivery fees in general. Uh and those consumers are coming in restaurant versus taking advantage of that digital experience. It's still a very robust business for us today and we continue to lean into and continue to invest in to create a wonderful experience through that digital channel. Um we don't see any additional fall off in the future, but we'll see what happens as we, you know, we as the economy continues to struggle um We could see some more modest declines, but nothing out of the ordinary future for us by the way. Also you guys announced a rise in menu prices also to sort of offset the hourly minimum wage at $15 for a lot of your employees. We have seen some employees protest for higher wages here, but are you expecting to do a wage increase here for any of your employees? Yeah, the recent price increase we just took was on the heels of us taking wage increases in those 700 restaurants that was outside of our normal pay cycle. So, you know, we are working very aggressively to continue to improve the employee value proposition for all of our team members across the us, whether that's wage increases where its response possible and necessary to help our team members make ends meet or continue to add benefits over the past couple of years, which we've added mental health, financial health security obviously are robust medical benefits, pay basically time off vacation time as well as a debt free degree and over 100 different university. So we feel like the overall employee value proposition is strong and we will continue to lean in and support our team members across the U. S. Where we see the need. Look a lot of people have said Chipotle is a recession proof stock out there. What sort of your outlook for the fourth quarter and even into next year when we have a lot of economists very worried about the state of the economy here. Yeah, if history is a lesson, if you look back at our last recession back in uh 8 4009 this brand held up very well through that recession and I think it's all really tied back to the overall value proposition here at Chipotle and so you know I can't I can't predict the future. We are guiding Q. Four to mid to high single digit cop growth uh and we will continue to accelerate our restaurant development across the U. S. And in Canada and western europe. So um that's kind of our outlook of how things will shape up. We'll see what happens in Q. One. It's too early to predict. But uh that's kind of where we stand today. Alright scott boatwright Chipotle's chief restaurant officer joining us here at cheddar news scott. Thanks so much for joining us.