Chipotle reported record third-quarter sales Wednesday due to a boom in online orders, but increased delivery costs cut into the company’s net income.
From June 30 to September 30, revenue rose 14.1% over the same quarter last year to $1.6 billion, with digital sales spiking 202.5% year over year, making up 49% of total revenue, and same-store sales jumping 8.3%.
However, net income fell to $80.2 million from $98.6 million last year as restaurant-level operating margins dropped because of higher delivery expenses and beef prices, more steak orders and fewer sales of high margin beverages, the company said.
Nearly half of all digital sales were delivery, Chipotle said, while the other half were pickup orders.
The decreasing margins were partially offset by lower avocado prices and menu price increases.
Even though the company’s earnings beat analysts estimates, Chipotle shares still fell 4% in after hours trading, likely due to sky-high expectations, according to Barron’s.
Though Wall Street was disappointed, Chipotle’s record sales show that a few national chains are making due during the pandemic. Dominos, McDonalds and Papa John’s are also seeing online orders skyrocket, while many small businesses are at risk of shutting down permanently.
Chipotle is also starting to charge 25 cents for a tortilla on the side.