Chipotle's Scorching-Hot Winter

Why extreme winter weather didn't keep customers from visiting their local Chipotle restaurants.

Apr 22, 2014 at 11:31AM

If you live anywhere in the continental U.S. -- except for Florida and Southern California -- then you know that last winter was absolutely brutal. In fact, according to the National Climatic Data Center, more than 20 U.S. cities saw double their average annual snowfall this year (congratulations to Philadelphia, which topped the list of outperformers with 60 inches of snow, three times its long-run average). 

Last month was also one of the coldest on record, particularly in the Northeast: Maine and New Hampshire residents endured their state's second coldest March ever, while New Yorkers suffered the Empire State's fifth chilliest. Brrr.

The perfect excuse
That harsh winter has given many companies an ideal culprit to blame for poor first-quarter business results. McDonald's, for example, cited "severe winter weather" as a key driver behind its disappointing 1.4% dip in February comparable-store sales. 

At least at a glance, that argument makes some sense. The bitter cold and extreme winter storms must have kept more people at home, which should have depressed their spending on dining out.

Chipotle Logo

But then how could you explain Chipotle Mexican Grill's (NYSE:CMG) scorching 13.4% spike in comps? The tex-mex chain last week logged its highest growth rate by that metric in almost eight years -- since the second quarter of 2006. And far from blaming the weather, Chipotle's management said that those pesky storms had no real effect on the quarter's results. CFO Jack Hartung said in a conference call with analysts that the unusual winter "certainly created volatility," but that "we believe there was not a net overall negative impact from weather in the quarter." He went on to explain:

While sales were understandably down during days of extreme winter weather, when the weather improved our sales recovered to a higher level than before the extreme weather for a few days, before settling back into a normal sales trend.

You might call this trend The Law of Conservation of Burrito Demand: Yes, a few Chipotle shoppers missed their lunches during stormy days this winter, but they made up for that loss as soon as the storms passed. Overall, demand grew at a steady, and spectacular, pace.

That's obviously great news for Chipotle's business, as it shows the food and the concept are resonating with consumers as deeply as ever. It also suggests that fast-food giants like McDonald's have more stubborn issues to worry about than just a temporary spike in bad weather.

Looking ahead
And there are at least two reasons that the rest of the year should be just as hot for Chipotle. For one, the company is boosting its menu prices for the first time in almost three years. Chipotle has some catching up to do here, particularly as its ingredient costs have been growing quickly. So management expects to raise prices somewhere in the "mid single digits" range, which will give comparable-store sales a shot in the arm. 

Chipotle is also on track to add nearly 200 new stores to its restaurant base this year, helping push overall sales higher. Remember, the 44 locations Chipotle added last quarter were one big reason revenue jumped by 24%. Together, these factors should help the company keep up the type of industry-trouncing sales growth that even a record-hot summer couldn't stop. 

3 stocks to own for the rest of your life
Chipotle has been a great stock, but is it a "forever" stock? As you know, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Demitrios Kalogeropoulos owns shares of McDonald's. The Motley Fool recommends and owns shares of Chipotle Mexican Grill and McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers