So far, that hasn’t hit sales. Chipotle reported revenue of $2 billion for the final three months of 2021, beating expectations. Comparable restaurant sales climbed more than 15%. Shares of the company are up 6.5% in premarket trading.
“We’re pretty fortunate with the pricing power that we have,” CEO Brian Niccol said in an interview with CNBC. “Our brand is really strong.” He noted a chicken burrito is still less than $8 in most US markets.
“We continue to see pressure on wages,” Niccol said on a call with analysts. “We want to make sure that we continue to be competitive on that front.”
With this in mind, restaurant executives are telling Wall Street they expect price hikes to continue.
Niccol also indicated additional price rises are on the table at Chipotle.
“Beef and freight and some of these other things that continue to stay elevated, if we don’t see it abate, we’ll have to take some additional pricing there,” he said.
Chipotle’s chief financial officer said they “keep thinking that beef is going to level off and then go down,” but “it just hasn’t happened yet.”
On the radar: The latest data on US consumer inflation arrives tomorrow. Climbing food prices — both inside and out of the home — are likely to be a big part of the story.
And while economists expect inflation to decline in the second half of the year, as central banks pull back support for the economy, executives in the restaurant industry don’t sound like they’re expecting much to change, at least for the time being.
Omicron is hurting demand for Lyft rides
So why is Lyft’s stock down 4% in premarket trading?
When reporting its latest earnings after markets closed on Tuesday, the company warned that its current quarter will be affected by the Omicron variant.
Previously, it had expected a “strong” increase in ridership during the first quarter. Now it thinks rides will be “down slightly,” hurting revenue.
“Ultimately, given the expected impact of Omicron on [the first quarter] and the unknown shape of the recovery, which could carry into [the second quarter], our near-term revenue growth acceleration will likely be affected,” CEO Logan Green told analysts.
Green said he expects demand to recover now that the wave of Omicron infections in the United States appears to have peaked, however.
“In the last week of January, we saw a pickup in rideshare rides that we see as a positive signal,” he said.
Investor insight: Even though Lyft’s finances are improving, Wall Street has remained skeptical. Shares fell 13% last year, compared to a 27% rise in the S&P 500. They’re down almost 4% year-to-date.
Bitcoin is four times more volatile than gold
“The biggest challenge for bitcoin going forward is its volatility and the boom and bust cycles that hinder further institutional adoption,” JPMorgan analyst Nikolaos Panigirtzoglou said in a note to clients published this week.
There’s been lots of chatter in investment circles about bitcoin becoming a form of “digital gold,” since it’s an asset that theoretically could retain its value even if stocks and bonds drop and can therefore help diversify portfolios.
But bitcoin is currently about four times as volatile as the yellow metal. Based on this calculation, Panigirtzoglou puts bitcoin’s “fair value” — the best estimate of its price based on market conditions — at $38,000, below its current price near $44,000.
In the longer term, if investors do start to treat bitcoin like gold, JPMorgan thinks its value could rise to $150,000.
But that’s a while away. For the time being, bitcoin’s ebbs and flows remain closely correlated with the stock market, Panigirtzoglou notes. And its rockiness compared to other assets is likely to keep some would-be buyers away.
Coming tomorrow: How much did US consumer prices rise in January? Economists polled by Refinitiv are forecasting 7.3% gains compared to the previous year.