Chipotle Mexican Grill, Inc. (NYSE: CMG) released its most recent quarterly results after markets closed Tuesday. Although these results do not reflect the time following Chipotle’s recent health scare, they are a welcome reprieve to the negative press that this company has been receiving.
The burrito chain posted $2.32 in earnings per share (EPS) and $1.17 billion in revenue. This compares with consensus estimates from Thomson Reuters that called for $2.18 in EPS and $1.19 billion in revenue. The same period from last year had $0.87 in EPS and $998.38 million in revenue.
During this quarter, comparable restaurant sales increased 8.1%.
Food costs were 34.1% of revenue, a decrease of 10 basis points as compared to the second quarter of 2016. Higher avocado costs were offset by lower costs from bringing the preparation of lettuce and bell peppers back into our restaurants
Restaurant level operating margin was 18.8% in the quarter, an improvement from 15.5% in the second quarter of 2016. The increase was driven primarily by sales leverage along with more efficient scheduling and deployment of our managers and crew.
In terms of the outlook for the remainder of 2017, Chipotle expects to see comparable restaurant sales increases in the high single digits, 195-210 new restaurant openings, and an estimated effective full year tax rate of roughly 38.4%.
Consensus estimates are calling for $7.90 in EPS and $4.6 billion in revenue for the 2017 full year.
Steve Ells, Founder, Chairman and CEO of Chipotle, commented:
We saw encouraging signs in our improved financial results during the first half of the year. Recent events, however, have shown that we still have a lot of opportunity to improve our operations and deliver the outstanding experience that our customers expect. We will continue to strengthen our teams, enhance our technology, and expand our menu offerings in order to delight every customer who visits us.
Shares of Chipotle closed Tuesday up 2.6% at $348.95, with a consensus analyst price target of $422.12 and a 52-week range of $336.52 to $499.00. Following the release of the earnings report, the stock was up 2.7% at $358.07 in the after-hours trading session.
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