Does Chipotle Deserve More Credit For Q3 Results?
When Chipotle released third-quarter financial results after markets closed Tuesday, the company posted $3.47 in adjusted earnings per share (EPS) on $1.4 billion in revenue. That compared with consensus estimates of $3.22 in EPS and revenue of $1.38 billion and…
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
When Chipotle Mexican Grill Inc. (NYSE: CMG | CMG Price Prediction) released third-quarter financial results after markets closed Tuesday, the company posted $3.47 in adjusted earnings per share (EPS) on $1.4 billion in revenue. That compared with consensus estimates of $3.22 in EPS and revenue of $1.38 billion and with earnings of $2.16 per share and $1.23 billion in revenue posted in the same period of last year.
During the most recent quarter, comparable restaurant sales increased 11%. Comparable restaurant sales improved due to a nearly 7.5% increase in comparable restaurant transactions and a 3.5% increase in the average check, which includes a benefit from menu price increases that were implemented during 2018.
At the same time, digital sales grew 87.9% in the quarter and accounted for 18.3% of sales.
Restaurant-level operating margin was 20.8%, an increase from 18.7% in the third quarter of 2018. The improvement was driven primarily by leverage from the comparable restaurant sales increase, partially offset by wage inflation at the crew level, higher costs of several ingredients, and increased delivery expenses.
Food, beverage, and packaging costs were 33.2% of revenue, a decrease of 20 basis points compared to the third quarter of 2018.
Looking ahead to the 2019 full year, the company expects to be at the high end of its prior high single-digit comparable restaurant sales growth guidance. Consensus estimates call for $13.50 in EPS and $5.5 billion in revenue for the year.
CEO Brian Niccol commented:
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. These strong results reinforce that running great restaurants with a purpose of cultivating a better world is a compelling proposition.
Shares of Chipotle closed Tuesday at $831.84, with a 52-week range of $383.20 to $857.90. The stock has a consensus analyst price target of $823.50. Following the announcement, the stock was up 1.6% at $845.00 in the after-hours session.
Contact [email protected] for any questions or corrections.
Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
