Chipotle Mexican Grill Inc. (CMG, Financial) released its first-quarter 2021 results after the market closed on April 21. While the company's earnings surpassed Refinitiv's consensus estimates, revenue matched expectations. Shares gained 0.4% in after-hours trading following the announcement to trade around $1,514.25.
By the numbers
The Newport Beach, California-based burrito chain posted adjusted earnings per share of $5.36 in the first quarter, up 74% compared to the prior-year quarter. Revenue of $1.7 4 billion surged 23.4% on a year-over-year basis due to strong restaurant comps as well as new restaurant openings. This was partially offset by a slowdown in overseas sales. Analysts had predicted EPS of $4.89 on $1.74 billion in revenue.
In a statement, Chairman and CEO Brian Niccol commented on Chipotle's performance:
"Chipotle is off to a great start in 2021 thanks to our employees and their incredible level of collaboration and tireless dedication. As vaccines roll out and we get closer to moving past this pandemic, I believe Chipotle is well positioned for growth. I'm excited about our future as we remain focused on innovating in culinary, leading in food with integrity, and providing convenient access inside our restaurants and through our expanding digital ecosystem."
Sales at Chipotle restaurants that remained open for at least 13 months were up 17.2%. Having improved toward the end of December to growing double digits in the last week of March depicts how the metric picked up on a sequential basis.
Digital sales
Digital sales remained the highlight of the quarter as the company notched a 134% gain. The growth was attributable to more customers ordering online. Digital sales made up 50.1% of total quarterly revenue.
The chain struck new partnerships last year with third-party delivery services like UberEats and Grubhub (GRUB), which resulted in increased digital orders as well as a decrease in delivery time and cancellations. To support the mammoth growth in digital orders, the company has promised to employ 15,000 new workers in the months ahead.
"Expanding access and convenience through our digital ecosystem has kept the Chipotle brand relevant and with world class talent, an inclusive culture, strong business fundamentals and deep financial strength, we are well prepared to emerge even stronger post-COVID," Niccol said.
Store count and financials
For the first quarter ended March 31, Chipotle launched as many as 40 new restaurants. Twenty-six of the new restaurants launched during the quarter included a Chipotlane. The company shut down five restaurants.
At the quarter's end, the company's balance of total cash, investments and restricted cash stood at $1.2 billion with no debt. In addition, Chipotle had $500 million available under its untapped credit facility.
Looking forward
Chipotle said it would open 200 new outlets this year. If the company reaches its full-year new store opening guidance, its store count will have increased to roughly 2,000 locations.
The company withdrew its financial forecast for 2021, citing the global uncertainty caused by the pandemic.
Disclosure: I do not hold any positions in the stocks mentioned.
Read more here:
- Key Takeaways from Verizon's 1st-Quarter Earnings
- Halliburton Earnings, Revenue Beat in 1st Quarter
- Netflix Shares Fall Despite Earnings Beat
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
