Chipotle Soars 10 Percent on Earnings Beat Driven By More Locations

Michael Teague |

Chipotle Soars 10 Percent on Earnings Bump Driven By More LocationsLast week, DoubleLine CEO Jefferey Gundlach was especially harsh on Chipotle Mexican Grill (CMG) during a presentation to investors, saying that a “gourmet burrito is an oxymoron,” and suggesting to his audience that the company would be a good target for a short. The gourmet fast-food restaurant chain’s stock price took a sharp near-three percent dive in response.

On Friday, however, shares for Chipotle shot up over ten percent, to $361.30, on enthusiasm generated by a strong earnings statement that was released late the previous day.

New restaurant openings have boosted net income for the first quarter to $76.6 million, or $2.45 per share on revenue of $726.8 million, up from the prior year period during which the company earned $62.7 million, or $1.97 per share. This was also a significant increase over analyst expectations of $2.13 per share on revenue of $725.4 million.

During Q1, the company opened 48 new locations, and said it is planning to open between 165 and 180 more before the end of the year, bringing the total number of restaurants well over 1,500.

While Chipotle reported a 1 percent sales increase at locations open for at least a year during the quarter due to an increase in customer traffic, it expects little in the way of sales growth from those locations for the rest of 2013. However, the increased cost of basic ingredients like chicken and dairy over the first three months of the year could result in a hike in menu prices, though the company has not specified when that may happen.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
BMRN BioMarin Pharmaceutical Inc. 95.87 -1.53 -1.57 823,786
CMG Chipotle Mexican Grill Inc. 419.88 6.07 1.47 1,070,845

Comments

Emerging Growth

Reliq Health Technologies Inc.

Moseda Technologies Inc provides mobile and IT cloud computing to increase operational efficiency and security. It develops SmartFleet, a solution designed for commercial use, as well as SmartCare, a mHealth…

Private Markets

GoCoin

Blockchain currencies (e.g. Bitcoin) provide a new disruptive way to transfer value between parties over the internet as opposed to going through banks. GoCoin provides online merchants with a suite…

Trustify

Trustify provides trust and safety in both the digital and physical worlds through our vast network of on-demand Private Investigators.By removing the large retainers and high hourly rates that traditional…