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Must-know: Why Chipotle continues to beat estimates

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Must-know: Why Chipotle continues to beat estimates PART 1 OF 5

Must-know: Why Chipotle continues to beat estimates

Chipotle Mexican Grill

On January 30, 2014, Chipotle Mexican Grill (CMG), the largest player in the fast-casual restaurant industry, reported its 4Q13 earnings and summarized its performance for the fiscal year. Chipotle saw prices move 10.5% on January 31 after the previous day’s earnings call, as it continued to serve positive results in addition to delicious burritos. Chipotle experienced a similar 13.5% rally in price last October, after beating estimates the previous quarter.

Must-know: Why Chipotle continues to beat estimates

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Leading up to earnings call

Drops experienced in the week leading up to the earnings call were generally not indicative of sentiments about the company’s performance announcement. Rather, the movement reflected sell-offs from the overall market.

Chipotle’s rally can be attributed to a few factors: comparable restaurant sales growth, increased throughput, and new locations.

The company saw positive results for same-quarter sales revenue, with an increase of 20.7% and $844 million, while posting an increase of 17.7% and $3.21 billion for 2013. Growth was attributed to same-store sales growth, new restaurant openings, and throughput. We’ll take a closer look at these growth drivers in the next parts of this series.

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