Chipotle surges as higher menu prices boost earnings

The shares of Chipotle Mexican Grill were headed Thursday for a record rally a day after posting earnings that beat Wall Street expectations.

Though still struggling to win back customers over food safety concerns over the past two years, the company raised the prices on its menu, helping to offset fewer transactions.The move boosted the average check size.

It was the first earnings report for new CEO Brian Niccol, the former chief executive at Taco Bell who took over at Chipotle in February, replacing founder Steve Ells, who remains chairman.

"Chipotle is a purpose-driven brand with loyal customers, passionate employees, industry-leading economic potential, along with incredible brand equity, and craveable food with integrity, all built over the last 25 years," Niccol said in a press release. "While the company made notable progress during the quarter, I firmly believe we can accelerate that progress in the future.” The stock was on track to rally the most since the company went public in January 2006.

First-quarter revenue rose to $1.15 billion from $1.07 billion a year earlier. Profit came in at $2.13 a share, topping the Wall Street estimate of $1.57 a share.

The company opened 35 new restaurants and saw a 2.2% increase in comparable restaurant sales.

For 2018, the company said it expects comparable restaurant sales to increase in the low-single digits. It also expects to open 130 to 150 new restaurants