Fast-food chains are looking like the big winners in the fourth quarter — and beyond — as fast-casual and casual-dining restaurants struggle to attract customers.
and revenue that fell short of Wall Street's estimates for the first time in more than five years. CEO Brian Niccol maintained that the burrito chain's price hikes haven't led to"meaningful resistance" from customers.
Instead, Chipotle executives presented a laundry list of reasons why its performance disappointed: bad weather, the underperforming launch of Garlic Guajillo Steak, tough comparisons to the previous year's brisket launch and seasonality.Customers order from a Chipotle restaurant at the King of Prussia Mall in King of Prussia, Pennsylvania.
"As we got around the holidays, we just didn't see that pop, that momentum, that we normally see ... frankly, we started the quarter soft, and we ended the quarter soft," Chipotle Chief Financial Officer Jack Hartung said on the company's conference call, comparing the decline in December to weaker retail sales at that time.
Chipotle said that traffic turned positive in January. However, the chain is facing easy comparisons to a year earlier, when Omicron outbreaks forced Chipotle and other chains to shutter early or temporarily close locations. And Bank of America analyst Sara Senatore noted in a research note on Wednesday that January's unseasonably warm weather has been supporting demand for the broader industry.
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