News

Chipotle reports positive Q3 earnings

October 26, 2018

Chipotle Mexican Grill reported this week that revenue increased 8.6 percent to $1.2 million and that comparable restaurant sales increased 4.4 percent.

"Chipotle's strategy to win today and cultivate a better future is taking hold and I'm pleased to report our third quarter results with strong sales growth and restaurant margin expansion over last year," said CEO Brian Niccol. "We made important progress during the quarter with the introduction of our 'For Real' marketing strategy and I'm encouraged by the progress we are making in building a pipeline of customer-focused innovation, driving digital sales, elevating our restaurant operations and effectively executing our reorganization."

Other highlights included:

• Revenue increased 8.6 percent to $1.2 billion.
• Digital sales grew 48.3 percent in the quarter and accounted for 11.2 percent of sales.
• Restaurant-level operating margin was 18.7 percent, an increase from 16.1 percent.
• Net income was $38.2 million, including the after-tax impact of $22.4 million in expenses related to restaurant asset impairment, corporate restructuring, and certain other costs, a 94.8 percent increase from $19.6 million; excluding those items, adjusted net income was $60.7 million, a 60.3 percent increase from $37.8 million.
• Diluted earnings per share was $1.36, net of an $0.80 after-tax impact from expenses related to restaurant asset impairment, corporate restructuring, and certain other costs, a 97.1 percent increase from $0.69. Adjusted diluted earnings per share excluding these charges was $2.16, a 62.4 percent increase from $1.33.1.
• Opened 28 new restaurants and closed or relocated 32

Overview for the nine months ended September 30, 2018 as compared to the nine months ended Sept 30, 2017

• Revenue increased 8.1 percent to $3.6 billion.
• Comparable restaurant sales increased 3.3 percent, which includes 20 basis points of deferred revenue.
• Digital sales grew 34.4 percent and accounted for 10.2 percent of sales .
• Restaurant level operating margin was 19.3 percent, an increase from 17.6 percent.
• Net income was $144.5 million, including the after-tax impact of $60.8 million in expenses related to restaurant asset impairment, corporate restructuring, and certain other costs, a 9.1 percent increase from net income of $132.5 million; excluding those items, adjusted net income was $205.4 million, a 36.3 percent increase from $150.7 million.
• Diluted earnings per share was $5.17, net of a $2.17 after-tax impact from expenses related to restaurant asset impairment, corporate restructuring, and certain other costs, an 11.9 percent increase from $4.62. Adjusted diluted earnings per share excluding these charges was $7.34, a 39.8 percent increase from $5.25. 
• Opened 97 restaurants and closed or relocated 42.

For 2018, management is anticipating the following:

• Comparable restaurant sales increases for the full year in the low- to mid-single digits.
• Restaurant openings at the lower end of the previously announced range of 130 to 150 for the full year.

For 2019, management is anticipating the following:

•  140 to 155 restaurant openings.