(Updates with food inflation forecast in fourth paragraph.)
July 19 (Bloomberg) -- Chipotle Mexican Grill Inc., the burrito chain whose share price has more than doubled in the past year, reported second-quarter profit that trailed analysts’ estimates as food costs gained.
Net income rose 9 percent to $50.7 million, or $1.59 a share, from $46.5 million, or $1.46, a year earlier, the Denver- based company said in a statement today. The average of 21 analysts’ estimates compiled by Bloomberg was for profit of $1.67.
Co-Chief Executive Officers Steve Ells and Montgomery Moran have raised menu prices to help offset higher ingredient costs. The Agriculture Department expects U.S. meat prices to climb as much as 7 percent in 2011. Chipotle said its restaurants’ operating margin narrowed to 25.8 percent in the quarter from 26.9 percent a year earlier.
“We expect food-cost inflation for the year of around 5 percent,” Chief Financial Officer Jack Hartung said during a conference call today. The restaurant is seeing higher prices for avocados, dairy and meat, he said.
Chipotle fell $13.71, or 4.1 percent, to $320 at 5:08 p.m. in trading after the close of the New York Stock Exchange. The shares had risen 57 percent this year through the close of regular trading today.
Chipotle, which has about 1,100 locations in the U.S., plans to open its first Asian restaurant, ShopHouse, in Washington this year. ShopHouse customers will be able to customize their food when ordering, similar to Chipotle stores, the company said in April.
Revenue rose 22 percent to $571.6 million in the three months ended June 30.
Sales at Chipotle restaurants open at least 13 months increased 10 percent, the company said. Same-store sales are a key indicator of a retailer’s growth because new and closed locations are excluded.
--Editors: Romaine Bostick, Cecile Daurat
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