Chipotle Surges After Hours on Earnings Beat
NEW YORK (TheStreet) -- Chipotle Mexican Grill
The Denver-based company said Thursday that net income for the June-ending quarter rose 7.6% to $87.9 million compared to the year-earlier period. Chipotle's diluted earnings per share came in at $2.82, a penny higher than what Wall Street was expecting and 10.2% higher than the year before.
Revenue for the quarter rose 18.2% to $816.8 million, surpassing analysts' expectations of $803 million. The company attributed the strong revenue growth to new stores opened -- a total of 92 for the first half of the year and 1,502 overall.
Comparable restaurant sales of 5.5% came in a little higher than Wall Street expected. Chipotle said sales growth was driven by increased traffic and from the benefit of one additional trading day in the quarter (Easter, which the restaurant is typically closed for was in March this year) as compared to the second quarter of 2012.
The company reaffirmed that it plans 165 to 180 new restaurant openings this year as well as low to mid-single digit comparable restaurant sales for the year.
Shares closed up 0.3% to $376.75 during regular trading hours, however the stock surged 6.4% to cross the $400 mark in after-hours trading.
"This month marks Chipotle's 20th anniversary," Steve Ells, Founder, Chairman and co-CEO of Chipotle, said in the earnings statement. "What started out as one restaurant serving burritos and tacos, has evolved into a national brand which is changing the way people think about and eat fast food. Our vision has connected with our loyal customers, who visit Chipotle to enjoy great tasting food made from premium ingredients. It's rewarding to look back and see what we've accomplished, but it's even more inspiring to think about what lies ahead over the next twenty years."
As expected, operating margins declined 160 basis points to 27.6%, driven by higher food and marketing expenses. Food costs were 33.1% of revenue, an increase of 100 basis points driven by higher commodity costs, the company said.
"Higher commodity costs were driven by increased prices for all of our salsa ingredients, as well as for dairy items and chicken. These increases were partially offset by lower avocado prices," Chipotle said in the release.
-- Written by Laurie Kulikowski in New York.
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