Last 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.
