Chipotle Mexican Grill Q3 Results 2018
Pricier burrito dishes and several mobile orders helped Chipotle Mexican Grill beat earnings expectations Thursday, despite fewer customers going through the door in the third quarter.
Brian Niccol, CEO of Brian Niccol, said in a busy earnings call that the company had a decline to give a certain fourth quarter earnings forecast, but it experienced already a boost in sales from the new marketing that started in September.
In October, the same retail sales have grown by 4 percent, the company says, and assigns a portion of the win for the "For Real" campaign.
Here's what the company reported compared to what Wall Street expected, based on a survey by analysts of Refinitive:
- Adjusted earnings: $ 2.1[ads1]6 per share vs. $ 2.00 per share
- Revenue: $ 1.23 billion in thread with estimates
- Same store sales: 4.4 percent growth overall versus 5 percent growth
The ads highlight the company's 51 ingredients everyone can recognize and the roof line "The only ingredient that is difficult to pronounce on Chipotle is" Chipotle. " "" The TV ads will run through November, while the online and social media ads will run through the end of the year. [19659003] The Chipotle shares were whipsawing in aftershore trading. Immediately after the report was released, the shares fell more than 2 percent, just to spike as high as an 8 percent gain when investors analyzed the report. More recently, the stock has increased more than 1 per cent. Shares have achieved more than 46 percent since January.
Net profit increased by 3.1 percent to $ 38.2 million, or $ 1.36 per share, up from $ 19.6 million, or 69 percent per share a year ago. Excluding items, including the cost of the company moving its headquarters to California, Chipotle earned $ 2.16 per share, topping estimates of $ 2.00 per share, according to Refinitive.
Revenues rose 8.6 percent to $ 1.23 billion, in line with what Wall Street had expected.
Same store sales rose 4.4 percent, weaker than 5 percent analysts have expected. A 3.8 per cent menu price increase and new marketing helped boost sales in the quarter, the company said. However, traffic during the period fell 1.1 percent.
In particular, an outbreak of food security in Ohio occurred early in the quarter, "without lasting impact" on the brand, said John Hartung, CFO of Chipotle on an earnings call Thursday.
The company said it expects sales in the same store for the whole year to increase by a low to the middle of a digit rate.
Digital sales, an important initiative for Niccol, grew 48.3 percent, now representing 11.2 of total sales.
This blow up comes about five months after the company announced that it invested $ 135 million to boost its mobile and online orders, launch an ad campaign and close to 65 underperforming sites.
Food, drink and packaging costs were about 1.6 percent lower than a year ago.
Chipotle saw its margins better in the quarter, driven by gains in same retail sales and lower marketing and sales costs, partly offset by an increase in repair and maintenance quarter.
In order to increase productivity, Chipotle has updated its kitchens with a brand new line. These are buffets that are similar to the front of the store, but only for digital orders. Employees no longer use paper receipts to fill the orders, but instead, a flat screen TV shows which ingredients will be included in the order. So far, there are 750 restaurants equipped with this new line, with the plan to refurbish all premises by the end of 2019.
In addition, digital order shelves that intend to show online bookings prominent once filled have now been at 350 Chipotle places. The company expects these shelves to be in all restaurants in mid 2019.
The company, which has 2,450 restaurants nationwide, reduces the number of new stores it expects to open this year. Earlier it said that it would open 130-150 restaurants in 2018, but it now expects that the actual figure will be at the low end of this area. By 2019, it plans to open 140 to 155 new restaurants.
Niccol attributes the slower pace of growth to the need to find strong leadership.
"You have to take it at a measured pace," Niccol said. . "Because the last thing you want to do is open restaurants in front of your ability to drive them."
