Shares of Chipotle surged by over 11% in Tuesday premarket trading just a day after the chain released an impressive quarterly earnings report. Despite an increase in prices, customers still were lining up for more burritos.
The burrito maker based in Denver said it had earned $3.50 a share during the recently ended second quarter. It was estimated by Wall Street that the company would earn $3.09 a share for the quarter.
These results come after plans were announced by Chipotle in April to increase prices on their menu for the first time in the past three years.
Like a number of food industry companies, Chipotle has had to pay more for its key ingredients. In specific, prices have increased for cheese, avocados and steak this year because of bad weather in a number of places in the country.
However, lovers of burritos have digested the hikes in prices while not missing a burrito.
Revenue increased by 28% to end the quarter at $1.05, which surpassed the estimates by analysts, as the higher prices helped boost the top line.
Store traffic has not been hurt by the new increase in prices. Sales at same stores, which is a key growth measure, was up 17% during the second quarter.
Moving forward, Chipotle is expecting sales growth in the mid teens for the full 2014 year.
Chipotle has expanded rapidly since it was spun off in 2006 from McDonald’s. Last year the burrito maker had sales of $3.2 billion and ranks as the largest national fast casual Mexican food chain.
During the second quarter of 2014, 45 new restaurants were opened taking its total restaurant count to 1,681. For 2014, the chain expects to open 195 new locations.