FILE PHOTO: The logo of Chipotle Mexican Grill is seen at the Chipotle Next Kitchen in Manhattan, New York, U.S., June 28, 2018. REUTERS/Shannon Stapleton
(Reuters) – Chipotle Mexican Grill Inc (CMG.N) on Tuesday reported a 16% drop in March same-store sales while online orders surged, as it was forced to keep stores closed because of the coronavirus pandemic.
The company’s shares rose 4% in extended trading as it also said it was in a strong position in terms of liquidity, with $909.2 million in cash and short-term investments and no debt, as of March 31.
With more than 90% of Americans under “stay-at-home” or “shelter-in-place” orders, Chipotle has had to depend almost entirely on online orders in recent weeks, forcing it to rapidly expand the digital side of its business to keep cash coming in.
The burrito chain partnered with Uber Eats in March to increase the number of regions where it can offer deliveries and is also adding more drive-thru lanes at restaurants, where customers can pick-up online orders without leaving their cars.
For the first quarter ended March 31, digital sales rose nearly 81% to $371.8 million and accounted for 26.3% of total sales, compared to just 19.6% of sales in the fourth quarter.
Still, sales volumes for take-out and delivery options are unlikely to be sufficient enough to make up for the hit caused by social distancing measures needed to curb the spread of the virus.
Chipotle said adjusted same-store sales in the past week were down in the high teens. The company also withdrew its forecast of delivering mid-single digit percentage growth in comparable restaurant sales this year.
Chipotle’s same-store sales rose 3.3% in the first quarter, helped by strong demand and higher menu prices in the early part of the year.
Net income fell to $76.4 million, or $2.70 per share, from $88.1 million, or $3.13 per share, a year earlier. Excluding one-time items, Chipotle earned $3.08 per share, beating analysts’ estimates of $2.90, according to IBES data from Refinitiv.
Reporting by Uday Sampath in Bengaluru; Editing by Maju Samuel, Bernard Orr