Chipotle Mexican Grill’s Spicy Q1 Results Beat Wall Street’s EPS Forecasts

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Outdoing analyst earnings expectations, fast casual Mexican-style restaurant chain Chipotle Mexican Grill (NYSE:CMG) reported strong first-quarter results yesterday for the period ended March 31. Besides strong gains, the company says its digital sales are flourishing, and noted a positive reception to several new items added to its menu.

The company narrowly missed Wall Street’s revenue forecast based on the consensus estimate data provided by Zacks Equity Research, delivering a 0.27% negative surprise with its $1.74 billion top line. However, revenue still surged 23.4% year over year compared to Q1 2020’s $1.41 billion. Adjusted earnings per share, or EPS, surprised positively by almost 9%, beating analyst predictions of $4.92 with an actual result of $5.36. This is also a 74% rise from last year’s $3.08 EPS.

A Chipotle restaurant on Sunset Boulevard, California.

Image source: Getty Images.

Comparable-store sales, or comps, jumped 17.2%. Notably, digital orders have now overtaken in-person orders, edging up to 50.1% of total sales and expanding 133.9% year over year. Chipotle says some digital growth comes from “the added convenience of more Chipotlanes” and that “more than half of the digital sales were from order-ahead transactions.”

This data lends support to Chipotle’s decision to emphasize digital development after initial reluctance to explore this sales avenue. With its new digital focus, Chipotle recently invested in a privately held robotic delivery vehicle company, Nuro. The company also highlights how 26 of the 40 new restaurants it opened in Q1 feature the highly popular “Chipotlanes.”

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While Chipotle’s results look strong overall, the company’s shares were down in Thursday morning trading. This may from the company’s lack of firm sales guidance due to ongoing COVID-19 uncertainty, alongside its conservative guidance for 200 new restaurant openings for all of 2021.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.



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