Help is on the way for the burrito chain.
Chipotle Mexican Grill marked the start of its new era, led by Taco Bell’s former CEO, as it released promising earnings and raised hopes that it has finally put its myriad troubles behind it.
During the Chipotle’s first-quarter earnings call Wednesday, new CEO Brian Niccol peppered his comments with an emphasis on digital innovations, interesting new menu items, the need to appeal to young diners, ways to enhance marketing and ensuring customers feel they’re getting a good value.
“It’s a story of a recovery and where that recovery takes us is really exciting,” he said during the phone call for Wall Street analysts. “There are real opportunities for us to make simple pivots to increase the appeal of our brand to those customers who are already very much big fans.”
During Wednesday’s call, Niccol explained that it was important to would-be diners what makes Chipotle special, including its healthy food and fast service.
“We’ll find some singles on the way to finding home runs,” he said. “What we see is a real opportunity to make the brand more visible.”
Niccol briefly mentioned the possibility of expanding into breakfast and drive-thrus as well as the importance of giving mobile ordering and delivery broader reach. He repeatedly referenced the importance of doing testing, which may have been an allusion to Chipotle’s fumbled launch of its long-awaited queso in 2017. The sauce fell flat and the recipe had to be changed.
“Every age cohort loves Chipotle and we over-index with young people,” Niccol said. “This brand is a youthful spirit, a challenger.”
But challenging the challenger are concerns about food safety which linger, though the famous multi-state E. coli outbreak was back in 2015. Last year brought a norovirus outbreak at one of its Virginia locations, rodent sightings at a Dallas one and reports of ill workers and customers at a Los Angeles restaurant.
Niccol is widely credited for Taco Bell’s turnaround, which was powered by mobile order and pay, savvy marketing to a young, cool audience and new menu items, most notably the chain’s foray into breakfast.
Taco Bell is owned by Yum! Brands, whose portfolio also includes KFC and Pizza Hut.
Once a Wall Street darling, Chipotle is bouncing back from a rough few years.
In February, the Denver-based chain announced plans to open 130 to 150 new restaurants, launch a loyalty program and spend $50 million — or $20,000 on average — to snazzy up its restaurants in 2018.
At the end of February, Chipotle shuttered its only burger restaurant, Tasty Made. The attempt to break into a new genre of food ended less than a year and a half after the Lancaster, Ohio, location opened. The sole burger-fries-shakes outpost wasn’t even buoyed by hiring Richard Blais, winner of Bravo television’s “Top Chef All-Stars” and a James Beard-nominated cookbook author.
Niccol, who took over last month, replaced the Chiptole founder Steve Ells, who’s now the chain’s executive chairman. And the new CEO had good financial news to report.
Chipotle reported earnings of $2.13 per share on $1.148 billion in revenue, compared to the Thomson Reuters I/B/E/S forecast of earnings of $1.57 per share on $1.147 billion in revenue. Sales at Chipotle locations open at least a year — an industry measure that takes a chain’s unit growth into account — were up 2.2%, beating Thomson Reuters’ anticipated 1%.
And the stock jumped about 10% in after-market trading.
Chipotle stock closed at $339.67, up $6.57 or 1.97%, on Wednesday.
In a true high-low mashup, iconic fashion designer Marc Jacobs dropped to one knee at a New York City Chipotle on Wednesday night to propose to his boyfriend, Char Defrancesco.
Follow USA TODAY reporter Zlati Meyer on Twitter: @ZlatiMeyer
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