Chipotle Mexican Grill Inc (NYSE: CMG) stock jumped in after-hours session on Tuesday after the company announced its second quarter financial results. The company beat on both earnings and revenue, sending its shares up 3.97% to $768.95 in after-hours trading.
Identical-store sales growth, a closely watched metric, were up 10% and above analysts’ expectations of 8.33%. The company attributed identical-store sales growth to increases in the transactions and the average check. Digital sales accounted for 18.2% of companywide revenue in the quarter, and were up 99.1% on a year-over-year basis.
However, beverage, food, and packaging expenses increased in the quarter due to higher costs of dairy and avocados. Shares of Chipotle have gained more than 77% since the beginning of the year, and ended the regular session down 0.38% to $739.60.
Chipotle Earnings
Chipotle reported net income of $91 million, or $3.22 per share, compared with $47 million, or $1.68 per share, in the same period last year. Excluding special items, earnings came to $3.99 per share in the quarter. On average, analysts surveyed by Refinitiv were expecting the company to report adjusted earnings of $3.76 per share.
Net sales came in at $1.43 billion, up 13% from the same quarter last year. Analysts were expecting revenue of $1.41 billion per share, according to figures compiled by Refinitiv.
The average check increased by 3.5%, thanks in part to higher menu prices that the company put in place in 2018. Transactions at stores open at least twelve months were up 7% in the three months ended June 30, 2019.
For the full year, the company views high single digit comparable restaurant sales growth, up from its previous guidance of mid to high single digit range. Chipotle also expects to open 140 to 155 new restaurants before the year comes to a close.
Chipotle CEO Comments
“We’re pleased with our financial performance, which marks the sixth consecutive quarter of accelerating comps and reflects continued progress on our key strategic initiatives,” said Brian Niccol, Chief Executive Officer of Chipotle Mexican Grill.
“These strong results were delivered despite a tougher year over year comparison and benefited from better restaurant operations, more effective marketing, and leveraging our digital make line to grow sales and expand access.”
Chipotle Mexican Grill Inc profile
With $4.9 billion in systemwide sales during 2018, Chipotle Mexican Grill is the largest player in the $14 billion domestic fast-casual Mexican restaurant category. Its menu includes burritos, bowls, tacos, and salads, which are made from higher-quality ingredients than those typically found at quick-service restaurants.
As of March, the firm operated almost 2,500 company-owned restaurants in the United States, Canada, the United Kingdom, France, and Germany. – Warrior Trading News
