Chipotle Beats on Revenue and Comps, Misses on Profit
NEW YORK ( TheStreet) - Chipotle Mexican Grill
The Denver-based restaurant company reported net income rose 15.3% compared the same period last year, reaching $83.4 million, or $2.66 a share, for the September-ending quarter. Revenue climbed higher 18% to $826.9 million.
Analysts, according to Thomson Reuters , expect earnings growth of 22% from last year's third quarter, to $2.78 a share. Revenue was expected to climb 17%, to $820 million.
Comparable restaurant sales - an important metric for measuring store sales which excludes new restaurant openings -- rose 6.2% year over year, driven by increased traffic, Chipotle said. The number surpassed even the most bullish analysts' predictions for the quarter. Chipotle opened 37 restaurants in the quarter, bringing its total count to 1,539, including its first in Germany. The number was slightly below the 44 restaurants opened in the second quarter.
However, the company said restaurant level operating margin fell 60 basis points to 26.8%, as food costs as a percentage of revenue rose 100 basis points to 33.6%.
"Higher ingredient costs were driven by increased produce prices for tomatoes, corn and tomatillos in our salsas as well as higher costs for dairy and chicken, and finally, more expensive oils as we began converting from GMO soy oil to non-GMO sunflower and rice bran oils," the company said in the earnings release.
Shares were ticking 1.8% higher in post-market trading to $447.
The company reiterated that it expects to open between 165 and 180 new restaurants in 2013. It slightly raised its comp sales expectations to "mid single-digit" for 2013.
Chipotle also delivered 2014 guidance. It expects to slightly increase the pace of new restaurant openings, calling for a total of 180 to 195 for 2014. Chipotle says it expects low single-digit comparable restaurant sales for the year, excluding any menu price increases.
"Our unique food culture continues to resonate with our customers. We are proud of the investments we have made over the years to source sustainably raised ingredients, which allows us to serve delicious food. By sourcing the best possible ingredients and cooking them according to classic cooking techniques we continue to demonstrate that just because food is served fast, it doesn't have to be a typical fast food experience," said Steve Ells, founder, chairman and co-CEO of Chipotle.
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