Shares of Chipotle Mexican Grill Inc. rose 2.7% in extended trades Thursday after the company reported better-than-expected third-quarter earnings.
The restaurant chain reported net income of $313.2 million, or $11.32 a share, compared to $257.1 million, or $9.20 a share, in the prior year’s quarter. Excluding a 4-cent after-tax impact from expenses related to corporate restructuring, adjusted earnings were $11.36 a share, up from $9.51 a share in the same period last year, Analysts surveyed by FactSet were looking for adjusted earnings of $10.55 a share.
Chipotle’s
CMG,
comparable restaurant sales increased by 5%, better than the 4.5% increase forecast by analysts surveyed by FactSet.
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Third-quarter revenue was $2.472 billion, up from $2.22 billion in the same period last year, and in line with analysts’ forecast. Food and beverage revenue was $2.456 billion and delivery revenue was $15.9 million. Analysts surveyed by FactSet were looking for restaurant revenue of $2.465 billion and delivery revenue of $16 million.
For the fourth quarter and full year, Chipotle gave a comparable restaurant sales outlook of growth in the mid to high-single-digit range. Analysts surveyed by FactSet had forecast fourth-quarter comparable restaurant sales of 5.3% and full-year growth of 7.1%.
Chipotle’s results will be seen as a positive for the dining sector amid concerns about consumer spending. Speaking during a conference call to discuss the results, Chipotle CEO Brian Niccol said that the company’s transaction throughput showed improvement every month during the third quarter.
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“We do love the fact that our growth is being driven by transactions,” he said. The CEO also highlighted the recent return of Carne Asada to Chipotle’s menu as a growth driver.
Chipotle is on track to open 255 to 285 new restaurants this year, according to the CEO. “We have a lot of opportunities ahead of us,” he said.
During the call, Niccol was also asked about the potential impact that anti-obesity drugs could have on Chipotle’s business. “We have not seem any material impact from it,” he said. “Our food is a good solution, because it’s clean, it’s not fried.”
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“Whether they are on GLP-1 drugs, or whether they are on a keto diet, or a Whole30 diet,” he added. “Insert the lifestyle diet that they’re on, or the lifestyle drug that they might be on – the good news is we’re positioned to be able to customize that diet for you with clean food, done in a very healthy way.”
Shares of Chipotle have risen 30.2% in 2023, outpacing the S&P 500 index’s
SPX
gain of 7.8%.
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