(Reuters) -Chipotle Mexican Grill reported a smaller-than-expected rise in fourth-quarter comparable sales on Tuesday, as higher menu prices deterred budget-conscious consumers from opting for its pricey rice bowls and burritos.
It also forecast annual comparable sales growth at low to mid-single digits, which was below analysts’ expectations of a 5.6% growth, according to data compiled by LSEG.
The company’s shares fell 4% in extended trade.
This is the first quarter with Scott Boatwright at Chipotle’s helm. Boatwright officially became CEO in November but had been operating as interim CEO since mid-August, when Starbucks poached Brian Niccol with one of corporate America’s most lucrative contracts.
Chipotle took a 2% price hike late last year as the company works to offset an impact from higher costs of commodities such as avocado and beef.
President Donald Trump’s proposed tariffs on Mexico — paused for a month on Monday — could push up prices of avocado further, with the country accounting for about 33% of global production of the fruit as its largest producer, according to data from World Population Review.
Chipotle goes through more than 5 million cases of avocados a year, the chain said in September.
Consumers in the United States have been wary of pricey menus, a factor that has dented demand for chains such as McDonald’s and led to a quarterly sales miss for Chipotle in October.
The company’s fourth-quarter comparable sales grew 5.4%, below estimates of a 5.6% growth, as per data compiled by LSEG.
Operating margin in the reported quarter was 14.6%, compared with 16.9% in the preceding quarter.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Alan Barona)
