Earnings Cheat Sheet: Chipotle Shares Heat Up to All-Time High
Chipotle Mexican Grill (CMG) is a relatively new company that has delighted both taste buds and investors. CMG, founded in 1993, serves fresh mexican food across North America in over 1,000 casual dining restaurants. CMG uses high quality ingredients, which includes meat from animals that are raised without antibiotics or added hormones.
Do high quality ingredients in a fast casual dining restaurant translate into high quality returns for investors?
Earnings: For the third quarter, CMG reported earnings of $48.2 million ($1.52 per share). This represents a 40% increase from $34.5 million ($1.08 per share) in the same period last year.
Revenue: Also saw a large increase in the third quarter. Revenue jumped 23% to $476.9 million, from $387.6 million in the same period last year. This was attributed to Chipotles continuing expansion, and positive same store revenue growth. During the third quarter CMG opened 22 new stores.
Actual versus Wall Street Expectations: Chipotle’s earning per share of $1.52 per share smashed analysts estimates of $1.30 per share.
Notable Stats: Earlier in the year, CMG estimated that it would purchase about 5 million pounds of local produce during the year. CMG has actually purchased $8.2 million pounds of produce. This shows the growing commitment the company has for its increasing customer base, as well as investors.
Did You Hear That? The Q&A session provides a look forward into Chipotle’s plans for international growth. CEO Steve Ells discusses the company’s London store, and how it has been operating. He said, ” I am very, very proud of the food that we serve there. We’ve been able to source extraordinary raw ingredients and I think we are delivering an experience that’s on par with some of our best restaurants in the United States. It’s, I would say, I think it’s performing well within our expectations if not better, and we’re bullish on finding more sites and we’re actively looking for sites now in U.K as well as Paris.”
Commentary: Chipotle is a restaurant that provides customers with good healthy food quickly. While the company is mainly a domestic restaurant, the possibility for international growth is endless. Shares traded more than 5% in after-hour trading as they hit an all-time high on the strong earnings report.
Disclosure: No position.