Chipotle Mexican Grill is on track to break a company record by opening more than 300 eateries in 2024, a year that's proven to be a challenging one for the U.S. restaurant industry.
What's more, the fast-casual chain plans to open a similar number of stores next year, as the firm nears a return to pre-pandemic growth rates.
The Chipotle growth projections come as chains this year have undergone a barrage of operational shifts sparked by rising costs and slowing sales. Several dining chains and regional franchisees have taken actions including bankruptcy filings, job reductions and location closings.
Chipotle, however, reported a 13% jump in third quarter revenue to $2.8 billion, while its net income surged 24% to $387.4 million. Same-store sales rose 6% from the year-earlier quarter.
Executives said Chipotle opened 86 restaurants during the quarter ended Sept. 30 and is on track to open 285 to 315 for full-year 2024, a company record. The company is projecting 315 to 345 openings for 2025.
"We have a really robust pipeline and right now we have a lot of confidence in our development team to deliver great results in the years to come,” Chipotle interim CEO Scott Boatwright said during the Newport Beach-based company’s third-quarter earnings call Tuesday.
Location, sales milestone
As of the end of the third quarter, Chipotle had opened 185 restaurants year to date in 2024, pacing ahead of the 149 total at the same point of 2023 as the development climate improves from pandemic slowdowns.
Executives cited store growth as a main driver of third quarter revenue gains, bolstered by an easing of inflation, particularly in food costs.
Chipotle is planning to return to pre-pandemic annual location growth targets around 10%. Projections for 2024 and 2025 hew closer to 8% annual growth, though the company is standing by its previously stated target of reaching 7,000 locations by the end of the decade — nearly doubling its current total of about 3,600.
Nearly all of its restaurants in North America and Europe are company-owned, though Chipotle recently opened its first location in Dubai with a regional franchisee that plans to open more in the Middle East in coming months. Boatwright said the company’s third quarter openings included its first in Edmonton, Alberta, bringing its Canada total to 50, a “huge milestone," according to Boatwright, who took over as CEO when Brian Niccol left the company in late August to take the top executive spot at Starbucks.
Chipotle is seeing sales hold up with limited need for discounting, executives note, at a time when many fast-food and fast-casual chains are ramping up discounts in a bid to boost traffic.
Despite challenges, industry consulting firm Technomic has projected that U.S. fast-casual sales will post annual growth of 6.4% this year, with quick-service or fast-food operators on track to grow 4.6%. But overall restaurant sales are projected to grow just 3.8%, down from a prior forecast of 5.3%.