Chipotle Shares Blast Off After Company Reports Earnings

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Shares of burrito retail chain Chipotle were heading higher on Wednesday after the company reported its fourth quarter financial results that beat expectations.

Chipotle released the results after the bell and revealed that its same-store sales saw a jump of 6.1%. This is the highest the company has seen in six quarters and higher than the 4.49% that analysts were waiting for.

Shares were soaring over 10% after-hours on the results.

“Comparable restaurant sales improved primarily as a result of an increase in average check which includes a 3.3% benefit from menu price increases. Comparable restaurant sales also improved due to a 2% increase in comparable restaurant transactions,” said Chipotle.

For the fourth quarter, Chipotle also revealed earnings per share of $1.72 while analysts were expecting $1.37. Revenue at $1.23 billion was also higher than the $1.19 billion that analysts waited for.

Digital sales saw a jump of 65.6% and accounted for 12.9% of all sales in the quarter.

“We believe mild weather and free DoorDash delivery promotions may have driven accelerating [same-store sales] trends,” remarked KeyBanc.

CEO Brian Niccol commented on the earnings call, “I’m very pleased to report strong fourth quarter results with 6.1% comparable restaurant sales growth that included 2% transaction growth, restaurant level margins of 17%, 210 basis points over last year, and earnings per share adjusted for unusual items was $1.72. I’m also pleased to report for the full year 2018 restaurant average unit volumes achieved $2 million and our digital business went beyond a half a billion dollars, representing 10.9% of sales.”

He added, “The growth acceleration this quarter gives us confidence that our strategy to win today and create the future is working. When we connect with guests through culturally relevant marketing focused on Chipotle’s great taste and real ingredients, and provide more convenient access with less friction, they respond enthusiastically. I’m excited about the momentum we’ve built heading into 2019.”

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

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