Chipotle Mexican Grill Inc. (CMG) Monday reported a 57 percent jump in profit for the third quarter, as revenues surged on new restaurant openings and strong same-restaurant sales. Earnings and revenues for the quarter trounced Wall Street expectations. However, despite positive results, the restaurant chain maintained its full-year sales growth outlook and expects growth to slow down next year.
Denver, Colorado-based Chipotle's third-quarter profit rose to $130.8 million or $4.15 per share from $83.4 million or $2.66 per share last year. On average, 26 analysts polled by Thomson Reuters expected earnings of $3.84 per share for the quarter. Analysts' estimates typically exclude special items.
Chipotle, a burrito and tacos chain spun off from McDonald's in 2006, said its revenue for the quarter surged 31.1 percent to $1.08 billion from $826.9 million last year. Analysts had a consensus revenue estimate of $1.06 billion for the quarter.
The company said the revenue growth reflects a 19.8 percent increase in comparable restaurant sales as well as from new restaurants. The company opened 43 new restaurants during the quarter, bringing the total restaurant count to 1,724.
Restaurant level operating margin for the quarter improved 200 basis points to 28.8 percent from last year, primarily driven by favorable sales leverage. Food costs were 34.3 percent of revenue, an increase of 70 basis points, driven by increased prices for beef, avocados, and dairy, partly offset by the menu price increase.
Looking forward to the full year 2014, Chipotle continues to expects comparable restaurant sales to increase in mid-teens and to open 180 to 195 new restaurants. For the full year 2015, the company sees comparable restaurant sales increase of low-to- mid single digit.
CMG closed Monday's trading at $653.03, up $11.31 or 1.76%, on the NYSE. The stock, however, slipped $14.54 or 2.23%, in the after-hours trading.
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