Why Chipotle Mexican Grill had strong earnings in 3Q14


Nov. 20 2020, Updated 5:06 p.m. ET

Earnings per share (or EPS)

Chipotle Mexican Grill’s (CMG) third quarter earnings were released on October 21, 2014. It reported an adjusted EPS of $4.15. It increased by 56%—compared to an EPS of $2.66 in the same quarter last year. The increase was due to strong top and bottom line growth of 31% and 57% year-over-year (or YoY), respectively.

The diluted weighted average shares outstanding increased slightly to 31.5 million—from 31.2 million shares in the same period last year.

Company overview

CMG operates restaurants under a fast-casual format. It serves burritos, burrito bowls, soft and crispy tacos, and salads. It has sides like chips and guacamole. It also serves a variety of beverages.

The company operates eight ShopHouse Southeast Asian Kitchen restaurants and one Pizzeria Locale restaurant. It operates these restaurants under the same fast-casual format. As of September 30, the company operated a total of 1,724 restaurants. 

An investor who would like to invest in the restaurant industry as a whole can invest in exchange-traded funds (or ETFs) like the Consumer Discretionary Select Sector SPDR Fund (XLY). XLY includes McDonald’s (MCD), Yum! Brands (YUM), CMG, and Starbucks (SBUX).

To understand growth or decline in EPS, it’s important to understand revenue drivers—like same-store sales and unit growth. Then, we’ll look at how efficient the company was at managing its costs of operations.

In this quarterly overview series for CMG, we’ll take a deeper look at all of these factors. We’ll also look at the earnings and strategic changes or tactics that management discussed during the earnings call. We’ll help investors understand the company and make better investment decisions.

In the next part in the series, we’ll discuss same-store sales growth.

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