Fast-food restaurant Chipotle Mexican Grill Inc. (CMG, Financial) said first-quarter earnings were $2.13 per share, up 33.1% from prior-year earnings of $1.60 per share.
The Denver-based restaurant reported net revenues of $1.1 billion, up 7.4% from the first quarter of 2017 primarily due to higher store openings and strong comparable store sales growth. CNBC columnist S. Witten mentioned that Chipotle’s same-store sales growth outperformed analyst expectations by approximately 0.8%.
New CEO discusses strong results and winning strategy to drive momentum
Current CEO Brian Niccol praised founder and executive chairman Steve Ells for starting a restaurant brand driven on loyal customers and passionate employees and operating over 2400 stores that serve high quality food with integrity over the past 25 years. Comparable store sales of 2.2% were driven by higher average check size, which included a 4.9% benefit from menu price hikes enacted throughout the company’s stores over the past 12 months.
Restaurant level operating margins increased 1.80% year over year, reflecting lower marketing and promotional expenses. Food costs declined 1.40% as the company reduced its paper cost and usage.
Niccol concluded the earnings call with five initiatives to accelerate company momentum:
- Grow sales, transactions, margins and new restaurants
- Elevate brand relevance and further brand purpose
- Sustain company performance through innovation
- Promote a people-driven culture
- Run a great restaurant that delivers best-in-class performance
Company price rockets on earnings beat and strong innovative plan
At market open, Chipotle traded approximately $50 higher than its previous close of $339.52. The share price nearly topped $420 around 10:45 a.m., representing a 23.55% increase from the previous close.
Pershing Square manager Bill Ackman (Trades, Portfolio) owns approximately 10.32% of Chipotle’s shares outstanding. As of April 26, Ackman is gaining approximately 5% on the stock based on GuruFocus estimates.
Disclosure: No positions.
