Chipotle Easily Beats Earnings Estimates

Burrito rice bowl chain Chipotle delivered stellar earnings this week and easily beat estimates.

The company saw its shares pop 2% after announcing its fiscal third quarter financial results.

Chipotle Mexican Grill reported adjusted earnings per share of $3.82, beating the $3.22 that was expected according to a survey of analysts by Refinitiv. Revenue at $1.4 billion was inline with the $1.4 billion that was expected. Same-store sales at 11% easily beat the 9% expected.

The company also announced that it accelerated drive-thru plans and that this could delay some store openings
“We’re pleased with our overall results in the quarter, which reflects further progress on our key strategic initiatives to provide a great guest experience and position Chipotle to deliver above industry growth for many years to come,” CEO Brian Niccol stated on the earnings call.

“In fact, this marks the seventh consecutive quarter of accelerating comparable sales, which highlights that running great restaurants with a purpose of cultivating a better world is a compelling proposition,” he added.

“For the quarter, we reported 11% comparable restaurant sales growth that included nearly 7.5% transaction growth. Restaurant level margins of 20.8%, which is 210 basis points higher than last year. Earnings per share adjusted for unusual items of $3.82, representing 77% year-over-year growth, and digital sales growth of 88% year-over-year representing 18.3% of sales.”

Digital sales for the quarter grew 87.9% and accounted for nearly a fifth of Chipotle’s sales this quarter. Since its launch in March, Chipotle has added 7 million members to its loyalty program.

The company’s CFO John Hartung stated on the call, “We opened 25 new restaurants in the quarter, bringing our total openings for the year to 60 and based on the early success of Chipotle and we shipped in our real estate strategy to seek more site that can accommodate Chipotlane. As a result of the more than 80 restaurants currently under construction, about half of them will have a Chipotlane, which will result in a total of about 60 Chipotlanes by the end of 2019. Given the longer construction timeline associated with Chipotlane, some of these new openings are likely to shift from Q4 into early 2020. So expect our total openings for 2019 to fall at or slightly below the low end of our 2019 range of 140 to 155 openings. In 2020, we anticipate opening between 150 and 165 new restaurants with more than half including a Chipotlane. We expect these openings will be better balanced throughout the year with around 60 openings in the first half of the year versus only 35 openings for June of this year.”

Disclaimer: We have no position in Chipotle Mexican Grill, Inc. (NYSE: CMG) and have not been compensated for this article