Chipotle Mexican Grill (NYSE: CMG) reported its third quarter financial results on Tuesday during extended trading hours. The mexican fast food chain crushed earnings estimates, but shares fell by 5% on Wednesday.
For the quarter, Chipotle reported earnings of USD 3.82 per share on revenue of USD 1.4 Billion. Refinitiv analysts expected earnings of USD 3.22 per share on revenue of USD 1.4 Billion.
The Company reported comparable restaurant sales of 11%, which also beat estimates of 9.3%.
Chipotle reported that revenue increased by 14.6% year-over-year as a result of its revenue from the Chipotle Rewards loyalty program. Comparable restaurant sales improved due to a nearly 7.5% increase in comparable restaurant transactions and a 3.5% increase in the average check, which includes the benefits from menu price increases implemented during 2018.
During the quarter, Chipotle opened 25 new locations, including one relocation and one closure, bringing the total restaurant count to 2,546.
Due to the success of Chipotlanes, the Company is adding the drive-thru lanes and bringing the total to about 60 Chipotlanes by the end of 2019. Chipotlanes is a drive-thru pickup where customers can place their orders on their mobile phones and come pick up their food at a specific time.
Given the number of Chipotlanes under construction, the Company said some of the new openings will shift from the fourth quarter into early 2020. As a result, Chipotle is expecting total openings for 2019 to fall at or slightly below the low end of its fiscal 2019 guidance range of 140 to 155 openings. As for 2020, Chipotle is expecting to open a total of 150 to 165 restaurants with more than half including a Chipotlane.
"We're pleased with our overall results in the quarter, which reflects further progress on our key strategic initiatives to provide a great guest experience and position Chipotle to deliver above industry growth for many years to come," said Brian Niccol, Chief Executive Officer. "These strong results reinforce that running great restaurants with a purpose of cultivating a better world is a compelling proposition."
For remainder of the year, Chipotle is expecting comparable restaurant sales growth at the top end of its prior high single digit guidance.