NEW YORK — Chipotle is feeling confident that customers are willing to pay more for its burritos, bowls and tacos.
The Mexican food chain said Thursday that it would raise prices for the first time in three years as its popularity continues to soar. Menu boards with the new prices should start rolling out in coming weeks.
Executives have said in the past they were considering a hike of about 3 percent to 5 percent. That translates to an extra 24 cents to 40 cents for an $8 burrito bowl.
Jack Hartung, Chipotle’s chief financial officer, told analysts that price is not the main reason customers visit its restaurants anyway.
“Most of the value comes from the experience,” he said.
Hartung also said the company had earned “permission” from customers to raise prices because of that experience. And if needed, he said, Chipotle had the leeway to further raise prices without scaring off customers.
“We’ve still got room,” he said.
The decision comes as higher costs for beef, avocados and cheese have pressured profit margins for the chain, with net income for the first quarter coming in below Wall Street expectations. Still, Chipotle said sales at established locations rose 13.4 percent during the period, and it raised its outlook for the year.
For the three months ended March 31, Chipotle said net income rose 8 percent to $83.1 million, or $2.64 per share, up from $76.6 million, or $2.45 per share, a year ago. — AP
NEW YORK — PepsiCo reported a stronger-than-expected quarterly profit as the company sold more snacks around the world and hiked prices, including on its drinks.
The company, which also makes Frito-Lay, Gatorade, Mountain Dew and Tropicana, said global snack volume rose 2 percent in the period. Global beverage volume was unchanged from a year ago, including in its North American drinks unit.
Coca-Cola also reported flat volume in the North America market earlier this week. Both companies have been offsetting ongoing declines in their flagship pop businesses by relying more heavily on other beverages.
PepsiCo managed to push up revenue by raising prices as well as introducing more expensive drinks such as Mountain Dew Kickstart.
Chief Financial Officer Hugh Johnston said the company planned to raise prices between 2 percent and 3 percent in both snacks and drinks.
For the quarter, the company earned $1.22 billion, or 79 cents per share. Not including one-time items, it earned 83 cents per share, above the 75 cents per share Wall Street expected.
A year ago, it earned $1.08billion, or 69 cents per share. — AP
NEW YORK — Investment bank Morgan Stanley said Thursday that its first-quarter income rose 18 percent from a year ago, helped by higher earnings in its trading and merger and acquisitions advisory businesses.
Morgan Stanley earned $1.39 billion, up from $1.18 billion in the same period a year ago. The figures exclude accounting adjustments related to the value of the bank’s debt. The earnings were equivalent to 68 cents per share. That beat the 61 cents analysts were expecting, according to FactSet, a financial data provider. Revenue from continuing operations was $8.8 billion. — AP
NEW YORK — General Electric’s new focus on oil and gas equipment helped the company post strong first-quarter results.
GE posted lower overall first-quarter net income than a year ago, but that’s only due to the sale of NBC Universal during that period. The company said Thursday that its industrial divisions, especially oil and gas, performed well and that the global economic environment was improving.
GE earned $3 billion on revenue of $34.18 billion in the year’s first three months, down from $3.5 billion on revenue of $34.94 billion during the same period last year. — AP