Chipotle announced strong second-quarter results after the close Tuesday as the restaurant reported revenue of $2.21 billion that was just a hair off the $2.24 estimate, while earnings of $9.30 per share beat the estimate by 26 cents. The stock climbed a robust 17% this week. Chipotle Chief Technology Officer Curt Garner attributes much of Chipotle’s recent success to “a big return to in-restaurant dining. I think our in-restaurant dining channel was up 36%.” Cheddar News’ anchors break down all the numbers of this Stock of the Week.

Closing Bell

Stock of the Week: Chipotle Customers Return to In-Restaurant Dining

Welcome back to cheddar news, closing bell ken buffer here with the one and only kristen Schoeller ken, it's great to be with you. We got some screens down here, we've got a packed podium shaping up for the closing bell. But before we get to that, let's take a look at our stock of the week. So today we're talking about chipotle investors taking a bite out of this stock this week in a good way. The restaurant chain reporting strong second quarter results after the close on Tuesday and if we take a look at these numbers, chipotle sales, just a hair off estimates. I mean that was basically in line, we did see earnings per share, exceed expectations though by a good margin by 26 cents profits boosted by a big return to in person dining and on Wednesday, I was joined by Chipotle's chief technology officer curt garner to discuss the factors that helped drive this strong quarter, take a look. Our digital business continues to be a growth engine for the company, but I think really importantly in this quarter, we also saw a big return to in restaurant dining. I think our in restaurant dining channel was up 36%, so dramatic increase in guests returning to the in restaurant experience. At the same time, our digital business continued to grow And stay steady at 39% of sales. We opened 42 restaurants in the quarter, 32 of them included chipotle lanes and our chipotle restaurants trend higher in terms of digital sales, we only have a few 100 of those locations open. So as we continue to grow and double. Our restaurant count, we expect our digital business to continue to grow at the same time. Well that was good news for chapel. Take a look at his stock. This is a five day chart. You see the big pop after earnings and a continued climb higher just in this past week, the stock up 17%. So Ken I would say that that's quite the appetite that investors have had for Chipotle the stock at just shy of $1600 apiece. It's incredible. Now, believe it or not, the slight drop in online sales was actually good news for Chipotle. That's because in person dining is much more profitable for the company since third party companies like Doordash and Uber can charge commission fees on every order, which weighs on restaurant profits. Of course. Now, same store sales Rose more than 10% in the quarter. While chipotle is still putting a big emphasis on digital orders, it's clear that Americans are increasingly returning to pre pandemic habits. We've seen that in the retail space too as consumers opt for in person shopping as opposed to online shopping. Now in that same vein Chipotle locations in college towns are seeing seasonal traffic returns to pre pandemic levels, an important stat considering some of 15% of Chipotle locations are near colleges and we know inflation is weighing on american consumers, but Chipotle does not believe its price hikes are affecting sales whatsoever. Chipotle raised prices in the second quarter and plans another round of price hikes in august but ceo brian nickel believes it won't cause customers to shy away saying in the company's conference called quote fortunately for Chipotle, the majority of our customers are a higher household income consumer. Um well it is, it is on the high end of fast casual. I'd definitely say that, but we know can despite a bit of an economic slowdown that we had seen at the start of the year, chipotle still has big growth plans for the rest of the year does expect to open between 235 And 250 new restaurants just this year with staffing levels above 2019. So it's expanding its digital footprint as well. With an entry into the metaverse makes sense an increase, focused on ai technology and focusing on alternative store formats like that. Chipotle in which offers drive through and walk up windows for customers ordering online. Now, according to the company, the chipotle in stores handle higher volumes, they have better margins and let's take a look at chipotle stock so far this year, it's been a really strong week. If we take a look at a yearly basis, you see the stock is just down 2%. So Even though it's in the red, this is doing way, way better than the broader market, which is down, let's say on the S&P 500 about 14%, so it's sitting pretty, relatively speaking.