DENVER, April 17 (UPI) -- Chipotle said it will increase the prices on its menu owing to rising prices of ingredients, specifically the surging costs of beef and avocado.
The Denver-based company reported its first quarter earnings, with net income rising eight percent to $83.1 million, or $2.64 per share. That's up from $76.6 million, or $2.45 per share, a year ago, but still below analysts' expectations of $2.84 per share.
Revenue surged 24.4 percent to $904.2 million during the first quarter.
However, food costs represented 34.5 percent of revenue, up from 33 percent last year. The company is seeing inflationary pressure in beef, avocado and cheese.
Chipotle's beef costs have risen 25 percent and the company is expecting to see a rise in pork costs, a very real possibility considering a widespread piglet virus has killed thousands of young pigs over the last year.
"We are confident that our special food culture will continue to attract more customers to visit Chipotle as customers better understand and connect how natural and high quality ingredients that are freshly prepared result in better tasting food,” said Steve Ells, Founder, Chairman and co-CEO of Chipotle.
Chipotle CFO Jack Hartung said that prices would increase 3 percent to 5 percent. That translates to an extra 24 cents to 50 cents for an $8 burrito bowl.
Chipotle stock was down 5.2 percent as of 2:20 p.m. The stock is still up almost 70 percent since a year ago.