Second-quarter same-store sales at Chipotle Mexican Grill Inc. dipped 23.6 percent, an improvement from the nearly 30-percent decline in the first quarter, but indicating a slower-than-expected recovery.
For the quarter ended June 30, the Denver-based fast-casual operator said the same-store sales decline included a 19.3-percent drop in transactions.
Net income for the quarter was $25.6 million, or 87 cents per share, falling from $140.2 million, or $4.45 per share, a year ago, before a series of foodborne illness incidents that began in the second half of 2015. Revenue declined 16.6 percent, to $998.4 million.
The results were an improvement over the first quarter, when Chipotle reported its first quarterly loss as a public company. First-quarter same-store sales fell 29.7 percent, including a 21.1-percent decline in transactions.
“We returned to profitability and saw a modest improvement in comp sales trends in the second quarter,” said Steve Ells, Chipotle founder, chairman and co-CEO, in a statement.
Ells said marketing efforts launched just a few days before the quarter ended, including a summer loyalty program, are showing results.
“Our most recent marketing efforts, led by our Chiptopia frequency program, are off to a nice start in the third quarter, as customers are embracing the program, and nearly 30-percent of all transactions are engaged in Chiptopia,” he said. “While it has only been a few weeks since Chiptopia launched, we are pleased to see that July sales comp trends have already improved by 200 to 300 basis points, and transaction comp trends have improved by an even greater amount.”
For the first three weeks in April, however, Chipotle said same-store sales fell 22 percent. Analysts expected to see improved same-store sales in May and June.
Chipotle opened 58 restaurants during the quarter, bringing its total unit count to 2,124 locations.
Chipotle also began introducing chorizo as a protein option in a few markets in late June. The menu item is expected to roll out systemwide by the fall.