Chipotle (CMG) Surges Even Higher On Strong Third Quarter Earnings

Shares of Chipotle (CMG), one of the highest-flying growth stocks in the restaurant industry, surged even higher recently after the company reported mixed third quarter earnings. Chipotleâ s earnings per share rose 17.2% to $2.66, missing the consensus estimate of $2.78. However, revenue climbed 18% to $826.9 million, topping the $820.3 million which analysts had forecast.

Same-store sales climbed 6.2%, well ahead of the 4.7% that analysts had expected. Daily Chart
Chipotleâ s revenue growth was fueled by the opening of 37 new restaurants, a strategy that the company has consistently used to keep its top line growing. In the first nine months of the year, Chipotle opened a total of 129 new restaurants, bringing its total store count to 1,539, including its first location in Germany. Restaurant level operating margin declined from 27.4% to 26.8%. Food costs surged from 32.6% to 33.6% -- mainly caused by higher prices for dairy products, chicken, tomatoes, corn, and more expensive, non-GMO cooking oils. Chipotle has struggled in this department over the past year, primarily because its entire business model is built upon its reputation of selling â

Published on Oct 24, 2013
By Leo Sun
Leo Sun
Leo Sun is a freelance finance writer and position trader. He focuses on a combination of value and momentum investing, with a strong interest in the trading philosophies of Warren Buffett and Peter Lynch. Leo also has experience writing articles to help small business owners acquire loans and manage their finances. He regularly contributes to the Stock of the Day analysis.

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