Chipotle Mexican Grill Inc announced on Thursday that prices will raise in the middle of 2014 to offset higher food cost, which will send shares up 7.7 percent, according to Reuters.
The chain has been reluctant to increase menu prices despite higher costs for ingredients such as California avocados and salsa. Executives at these fast-growing burrito chain wanted to secure ample supplies of natural meats and switch to cooking oil and tortillas that do not contain genetically modified organisms (GMOs).
Reuters reported the chain's sales, at restaurants which opened at least 13 months ago, are up 6.2 percent from the latest quarter. According to the Consensus Metrix, this is more than the average analyst estimate of 4.7 percent.
In Denver, company officials said visits to their restaurants increased thanks to productive activity on social media. Animated films and arcade-style games about sustainable food production went viral on Facebook, Twitter and YouTube.
The Mexican food chain, posted "The Scarecrow," a three-and-a-half minute animated anti-big food video and downloadable game. The video is a part of a four-part series, that will be posted in 2014. For Chipotle, it's all about linking its name with the strong millennial values to eat better, eat local and brand lightly.
Chipotle was the first major U.S. restaurant chain to disclose which of its ingredients contain GMOs, which has become increasingly controversial as more eaters are looking for information about what is in the food they eat.
Reuters reported the third-quarter of the chain's net income increased 15 percent from the year earlier to $83.4 million, which is $2.66 per share. The income fell short of analysts' average estimate of $2.78 per share
Chipotle narrowed its full-year forecast for same-restaurant sales to mid-single-digit percentage growth. The Denver-based chain previously said it expected low- to mid-single-digit percentage same-restaurant sales growth for 2013.
Analysts say Chipotle needs "mid-single-digit percentage growth of same-restaurant sales to protect profits."
