Chipotle Mexican Grill Inc. Said visits from lower-income consumers have rebounded this year, helping boost the company’s sales in the first quarter.
Diners in households making less than $75,000, which make up about 40% of the chain’s customers, had pulled back in late 2022, Chief Financial Officer Jack Hartung said in an interview. But recently the gap in visit frequency with higher-income consumers closed quite a bit, he said.
“We were really pleased to see that the lower-income consumer during the first quarter bounced up,” he said. “It could be that we’re seeing some folks trade down from either casual dining or more expensive fast casual.”
Chipotle reported first-quarter sales and profit on Tuesday that surpassed estimates as customer traffic rose. The burrito chain was also helped by higher menu prices, which are up about 10% from last year at the same time, and lower costs for avocados. Shares rose as much as 15% on Wednesday, reaching a record high.
READ MORE: Chipotle Jumps as Traffic, Margin Trends Encourage
There’s “modest” inflation in Chipotle’s inputs, Hartung said, adding that unlike last year suppliers aren’t relentlessly raising prices. That makes it “less likely” that the company will have to charge more for its bowls and burritos this year.
“I think there’s a very good chance that we could hold the line for the rest of the year, at least most of the rest of the year,” he said.