Chipotle Moves Higher on Better Than Expected Earnings


 
 
11:15 02/10/2019

Mexican burrito retail chain Chipotle saw its shares blast off after the company reported better than expected fourth quarter financial results. The stock saw gains of over 10% on the report.

The company reported same-store sales increasing 6.1%, making it the highest the company has seen in six quarters. It was also better than the 4.49% that analysts expected.

“Comparable restaurant sales improved primarily as a result of an increase in average check which includes a 3.3% benefit from menu price increases. Comparable restaurant sales also improved due to a 2% increase in comparable restaurant transactions,” said the company.

The company also reported earnings per share of $1.72 for the fourth quarter, beating the $1.37 that analysts expected. Revenue at $1.23 billion was also better than the $1.19 billion tht analysts had called for. Digital sales saw a jump of 65.6% and accounted for 12.9% of all sales in the quarter.

“We believe mild weather and free DoorDash delivery promotions may have driven accelerating [same-store sales] trends,” remarked KeyBanc.

CEO Brian Niccol stated on the earnings call, "I'm very pleased to report strong fourth quarter results with 6.1% comparable restaurant sales growth that included 2% transaction growth, restaurant level margins of 17%, 210 basis points over last year, and earnings per share adjusted for unusual items was $1.72. I'm also pleased to report for the full year 2018 restaurant average unit volumes achieved $2 million and our digital business went beyond a half a billion dollars, representing 10.9% of sales."

He added, "The growth acceleration this quarter gives us confidence that our strategy to win today and create the future is working. When we connect with guests through culturally relevant marketing focused on Chipotle's great taste and real ingredients, and provide more convenient access with less friction, they respond enthusiastically. I'm excited about the momentum we've built heading into 2019."

The company also announced recently that it plans to add drive-thrus at some locations.

“Customers who order online or via the app can use these lanes to pick up their order without leaving their car,” said a Chiptole press release. “The drive-up pickup lanes are currently in the test phase, which will be expanded to a few dozens of Chipotle’s 2019 restaurant openings across several markets.”0


This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
Most Read