- Chipotle reported earnings and revenue that beat expectations after doubling its digital sales during the quarter.
- The chain’s stock has soared 63% so far in 2019.
- The company has been focusing on driving sales through digital engagement with a new loyalty program and investments in delivery and online order pick-up.
Chipotle Mexican Grill on Wednesday reported earnings and revenue that beat analysts’ expectations after doubling its digital sales during the quarter.
After the markets closed, shares of the company initially surged 4% but have since lost those gains.
“The on-going improvement in each of our key operating metrics over the past few quarters gives us confidence that our mission to win today and cultivate the future, is resonating,” CEO Brian Niccol said in a statement.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $3.40, adjusted, vs. $3.01 expected
- Revenue: $1.31 billion vs. $1.27 billion expected
- Same-store sales growth: 9.9% vs. 7.29%
Chipotle reported fiscal first-quarter net income of $88.1 million, or $3.13 per share, up from $59.4 million, or $2.13 per share a year earlier.
Excluding expenses related to restaurant asset impairment, corporate restructuring and other costs, the Mexican food chain earned $3.40 per share, topping the $3.01 per share expected by analysts surveyed by Refinitiv. Price hikes at the end of 2018 helped lower food, beverage and packaging costs but were partially offset by more demand for steak.
Net sales rose 13.9% to $1.31 billion, beating expectations of $1.27 billion. Digital sales rose 100.7% during the quarter, accounting for 15.7% of total sales.
In March, Chipotle launched its points-based loyalty program nationwide. Less than a week later, the company surpassed its one millionth member, who scored a year’s worth of Chipotle. The program has already helped mobile app downloads soar, according to a Barclays note.
During the company’s earnings conference call, Niccol said the rewards program now has grown to 3 million members.
The loyalty program is just one part of Chipotle’s strategy to build digital engagement. The company has a partnership with third-party delivery service DoorDash. It has also been investing in changes to its restaurants to make delivery and digital pick-up easier for customers, like pick-up shelves and drive-through windows called Chipotlanes.
Same-store sales grew by 9.9%, driven by a 5.8% increase in restaurant transactions. This is the fifth consecutive quarter that Chipotle has seen same-stores growth.
The company raised its same-store sales outlook for 2019. It is now forecasting mid-to-high single-digit sales growth at stores open at least a year. It previously said that it was expected mid-single digit growth.
The company opened 15 stores and closed 2 locations during the quarter, bringing its total restaurant count to 2,504. Chipotle reiterated its forecast of opening between 140 to 155 stores during 2019.
Chipotle Mexican Grill Inc. shares fell $3.75 (-0.53%) in after-hours trading Wednesday. Year-to-date, CMG has gained 64.37%, versus a 17.44% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of CNBC.