Investors Are Loving Companies That Increase Their Prices

To understand this earnings season, look no further than the varied fortunes of Chipotle vs. Clorox.

While Chipotle Mexican Grill Inc. hasn’t shied away from increasing the price of its burritos and tacos, The Clorox Company seems to have had more trouble passing on rising costs to customers.

These diverging circumstances have been reflected in the companies’ share prices, with Chipotle up almost 10% since it reported and spoke of further price increases, while Clorox is down around 14%.

Chipotle has been raising prices to offset rising food and labor costs. While the higher prices didn’t have much effect on their fourth-quarter earnings, Chief Financial Officer Jack Hartung said in the earnings call that he sees them paying off soon: