Chipotle Mexican Grill Inc. posted second- quarter sales that trailed analysts’ estimates, a sign some diners may be balking at the restaurant chain’s higher prices.
Revenue in the quarter rose 14 percent to $1.2 billion, the Denver-based company said Tuesday in a statement. Analysts estimated $1.22 billion.
Chipotle raised prices last year to offset higher beef costs and has been grappling with a pork shortage that’s limited the supply of its popular carnitas filling. Sales at restaurants open at least 13 months rose 4.3 percent in the quarter, following a 10 percent gain last quarter and trailing analysts’ 5.8 percent average estimate.
“They’re a victim of their own success,” said Jason Moser, an analyst at the Motley Fool. “They typically bring in such great numbers that they continually raise the bar. Eventually it’s not enough.”
Chipotle fell 4.5 percent $642.94 at 4:23 p.m. in late trading in New York. The shares had slipped 1.7 percent this year through the close of regular trading on Tuesday.
Second-quarter net income increased 27 percent to $140.2 million, or $4.45 a share, from $110.3 million, or $3.50, a year earlier. Analysts estimated $4.43 a share.
Chipotle is adding new restaurants at a faster clip to help boost sales. The company said Tuesday that openings will be at the high end of its projected range of 190 to 205 locations this year, or even exceed that estimate. That would bring its base to more than 2,000 restaurants.
Chipotle said in April that its higher prices still weren’t enough to cover the cost of beef used for its steak and barbacoa burritos and that it was considering raising prices again this year. In addition, Chipotle is paying more for its tortillas as it switches to flour that’s organic, unbleached and unenriched.
The company has been touting its simple, unprocessed ingredients in a marketing campaign that debuted this spring. In April, Chipotle said it had pulled genetically modified organisms from its tortillas and cooking oil, the final two items on its menu that contained GMOs.
Chipotle continues to face a pork shortage. The company has been trying to boost its supply since January, when it suspended a pork supplier for not meeting its pig-housing standards. As a result, the company pulled carnitas from about a third of its restaurants. Chipotle recently added a British pork supplier, allowing it to add carnitas back to the menu at its more than 100 locations in Florida.
The company has said it will have carnitas back on the menu at all of its restaurants by the end of the year.