When Chipotle Mexican Grill Inc. (NYSE: CMG) 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.