Business & Financedata story
Chipotle posts a third straight quarter of same-store sales growth as loyalty members reach 24 million
Chipotle's turnaround continued in the third quarter, and a revamped rewards program now drives one-third of its sales.
This article is general information, not financial, investment or insurance advice. Check the details with a qualified adviser before you decide.
The headline number
Chipotle's same-store sales rose 2.1% in the third quarter, its third straight quarter of comparable-store sales growth. [1] The result matters to anyone who follows the chain as a diner, an app user or an investor, because it extends a turnaround. [1]
For the full year, Chipotle reiterated its forecast that same-store sales will increase by a low-single-digit percentage. [2]
How the rewards program changed
Chipotle revamped its rewards program in April and now has over 24 million active members. [1] Those loyalty members hit 24 million by September and accounted for one-third of all sales, the largest share in company history. [3]
The April overhaul of the app extended how long rewards points last and added monthly free food promotions. [3] It also lowered the points needed to redeem for items such as tortillas, soda and chips. [3]
CEO Scott Boatwright said the loyalty program is designed to deepen engagement and give guests more reasons to visit Chipotle. [3]
Who is spending
Low-income consumers outperformed high-income consumers at Chipotle restaurants during the quarter for the first time this year, according to Boatwright. [2]
Boatwright said low-income consumers spent the most in September, when promotions were at their low point during the quarter, and that discounts are not the reason for their growth. [2]
Pressures and setbacks
Chipotle has been feeling pressure from wage inflation, higher labor usage, and increased prices. [1]
In the second half of July, Chipotle saw sales pull back as diners grew concerned about raw lettuce due to cyclospora, although its own supply was never tied to an outbreak. [2] In August, it temporarily pulled jalapenos from Minnesota restaurants after its supply was potentially linked to a salmonella outbreak. [2]
Chipotle saw trends soften in early October, although executives said its traffic has returned to growth since then. [2]
Expansion and competition
Chipotle plans to add 340 to 360 U.S. and Canada company-owned locations and 15 to 25 international restaurants in 2027. [1]
McDonald's announced in September that it plans to launch a refreshed MyMcDonald's Rewards program this year. [3]
What it means for you
If you use the Chipotle app, the April changes apply to you: rewards points last longer, monthly free food promotions are available, and fewer points are needed to redeem items such as tortillas, soda and chips. [3]
Loyalty members accounted for one-third of all sales by September, so the program is a large part of the business. [3] If you follow the company as an investor, the full-year forecast of low-single-digit same-store sales growth is the figure to hold against future results. [2]
Sources
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