Shares of Chipotle Mexican Grill Inc. rose 2.7% in extended trades Thursday after the company reported better-than-expected third-quarter earnings.
The restaurant chain reported net income of $313.2 million, or $11.32 a share, compared to $257.1 million, or $9.20 a share, in the prior year’s quarter. Excluding a 4-cent after-tax impact from expenses related to corporate restructuring, adjusted earnings were $11.36 a share, up from $9.51 a share in the same period last year, Analysts surveyed by FactSet were looking for adjusted earnings of $10.55 a share.
Chipotle’s
CMG,
comparable restaurant sales increased by 5%, better than the 4.5% increase forecast by analysts surveyed by FactSet.
Related: McDonald’s and Chipotle set to continue dominance amid consumer-spending worries, research shows
Third-quarter revenue was $2.472 billion, up from $2.22 billion in the same period last year, and in line with analysts’ forecast. Food and beverage revenue was $2.456 billion and delivery revenue was $15.9 million. Analysts surveyed by FactSet were looking for restaurant revenue of $2.465 billion and delivery revenue of $16 million.
For the fourth quarter and full year, Chipotle gave a comparable restaurant sales outlook of growth in the mid to high-single-digit range. Analysts surveyed by FactSet had forecast fourth-quarter comparable restaurant sales of 5.3% and full-year growth of 7.1%.
Chipotle’s results will be seen as a positive for the dining sector amid concerns about consumer spending. Speaking during a conference call to discuss the results, Chipotle CEO Brian Niccol said that the company’s transaction throughput showed improvement every month during the third quarter.
Also See: These two commentators who have been warning of a market crash say it’s now here
“We do love the fact that our growth is being driven by transactions,” he said. The CEO also highlighted the recent return of Carne Asada to Chipotle’s menu as a growth driver.
Chipotle is on track to open 255 to 285 new restaurants this year, according to the CEO. “We have a lot of opportunities ahead of us,” he said.
During the call, Niccol was also asked about the potential impact that anti-obesity drugs could have on Chipotle’s business. “We have not seem any material impact from it,” he said. “Our food is a good solution, because it’s clean, it’s not fried.”
See Now: These money and investing tips give your portfolio some needed muscle
“Whether they are on GLP-1 drugs, or whether they are on a keto diet, or a Whole30 diet,” he added. “Insert the lifestyle diet that they’re on, or the lifestyle drug that they might be on – the good news is we’re positioned to be able to customize that diet for you with clean food, done in a very healthy way.”
Shares of Chipotle have risen 30.2% in 2023, outpacing the S&P 500 index’s
SPX
gain of 7.8%.
Read the full article here