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%.
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.
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.
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.