Chipotle Earnings Show the Polar Vortex Didn’t Freeze Out Sales
Chipotle (NYSE:CMG) shares were surging Thursday during morning trading after the fast food chain posted its first-quarter earnings and proved to investors that consumers still visited its restaurants this winter, despite the frigid temperatures and intense competition from rivals. Shares jumped about 5 percent in premarket trading and sat at $552.40 as of 9:20 a.m. Eastern on Thursday.
The good news for Chipotle is that its sales rose 24 percent to $904.2 million in the first quarter of 2014, reflecting the restaurant’s largest quarterly gain in two years. Chipotle’s figure also beat analyst expectations, as they predicted revenue of $873.5 million. The number for sales at stores open at least 13 months was also impressive, jumping 13.4 percent, while analysts estimated an 8.8 percent increase. Chipotle’s profit figure wasn’t as favorable, on account of higher food and operational costs limiting its profit gains. First-quarter net income increased 8.5 percent to $83.1 million, or $2.64 per share, from $76.6 million, or $2.45 per share, a year ago. Analysts estimated $2.87 per share.
But despite the disappointing income figures, Chipotle still impressed investors and analysts with its 2014 projections. The company raised its forecast for 2014 comparable-store sales growth to the high single-digit range; it had anticipated a low- to mid-single digit range improvement. Steve Ells, chairman and co-CEO of Chipotle, demonstrated satisfaction with the Mexican chain’s promising progress in the first quarter of the year, and he said in a statement following the earnings release, “We are delighted that more and more people are choosing to visit our restaurants every day allowing us to deliver double digit comps during the quarter.”