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Chipotle Stock Rose over 10% after Hours on Strong 1Q18 Earnings

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1Q18 performance

Chipotle Mexican Grill (CMG) posted its 1Q18 earnings after the market closed on April 25. The company posted adjusted EPS (earnings per share) of $2.13 on revenues of $1.2 billion. Compared to 1Q17, the company’s EPS rose 33.0%, while its revenue grew 7.4%.

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Stock performance

Analysts were expecting the company to post adjusted EPS of $1.57 on revenues of $1.2 billion. Also, the company’s SSSG (same-store sales growth) of 2.2% outperformed analysts’ estimates of 1.3%. The strong SSSG, the improvement in restaurant margin, and higher earnings appear to have increased investor confidence, leading Chipotle’s stock price to rise 10.7% to $375.97 in aftermarket hours.

Year-to-date performance

Since the beginning of 2018, the stock price of Chipotle has risen 17.8%. After posting its 4Q17 earnings on February 8, 2018, the stock price of the company fell on its weak outlook. The stock fell to as low as $250.63 on February 13. However, the appointments of Brian Niccol as its CEO and Chris Brandt as its chief marketing officer appear to have increased investor confidence, leading to a rise in Chipotle’s stock price.

During the same period, peers Shake Shack (SHAK) and the Cheesecake Factory (CAKE) have returned 0.2%, and 5.8%, respectively. The S&P 500 (SPX) and the Consumer Discretionary Select Sector SPDR ETF (XLY) have returned -1.3% and 3.3%, year-to-date, respectively.

Series overview

In this series, we’ll look at Chipotle’s 1Q18 performance in comparison to analyst expectations. We’ll also look at the management’s guidance for 2018.

Let’s start by looking at Chipotle’s 1Q18 revenue.

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