More people simply ate at Chipotle in the quarter than the analysts had expected.
This was in a quarter where many retailers and other restaurant chains were reporting a tough environment and a consumer that was reluctant to open his wallet.
Chipotle operates in the “fast casual niche” bracket. Its restaurants don’t operate in the value category, and while they are sit down, they are not full service with wait staff.
Similar to Chipotle in this category are Noodles & Company (NDLS), Red Robin Gourmet Burger, Panera and Potbelly.
Out of its competitors, only Noodles & Company has already reported fourth quarter sales. It saw a gain of just 3.9% system wide.
Chipotle has been in business for 20 years. It now has 1,595 stores so it’s name and brand are not new to consumers.
For its 2014 outlook, Chipotle expects a return to a more moderate low to mid single digit comparable sales increase. But it also believes it has strong enough growth that it is considering a menu price increase later in the year.
Investors love it. Shares have been up since the earnings announcement even as the rest of the stock market has been weak.
How does Chipotle do it?
How is it able to thrive in the difficult fast casual restaurant market while others struggle?