Chipotle Earnings Lower Than Expected, Stock Drops
Chipotle Mexican Grill, Inc. has recently released it second quarter 2015 results. The said second quarter ended last June 30.
Chipotle’s revenue for the quarter actually increased by 14.1%, to $1.2 billion. However, Wall Street Journal reports that the company fell short of the average analyst estimate which is at $1.22 billion, reflecting a 16% increase, according to Thomson Reuters.
Meanwhile, Chipotle reported its sales for comparable restaurants to have increased by 4.3%. This reflects sales of Chipotle restaurants who have been open and in operation for at least 13 full calendar months. In contrast, analyst estimates pointed to a growth of around 6%. This was enough for the stock price of Chipotle to drop by 0.73% to $673.07.
Just the same, Chipotle founder, Chairman and co-CEO Steve Ells says he is still happy with the company’s second quarter result.
He said, “We feel good about our second quarter results, as our revenue, average restaurant sales, and comparable restaurant sales have continued to grow even comparing to a very strong 2014. The strength of our business is the product of our unique food culture and unique people culture, and we constantly find ways to improve, and overcome challenges we encounter – whether that means non-GMO ingredients, adding new pork suppliers to ensure food with integrity, or reinventing the way tortillas are made at scale. Our relentless focus on the key drivers of our business allows us to continue to change the way people think about and eat fast food.”
Chipotle’s second quarter net income is $140.2 million, relatively higher than its 2014 second quarter net income of $110.3 million. Moreover, the second quarter also saw Chipotle opening 48 new restaurants. This brings the company’s total number of restaurants to 1,878.
According to Chipotle co-CEO Monty Moran, “We consistently deliver this strong performance because of our amazing people culture, consisting of teams of top-performing employees who are empowered to achieve high standards. We are completely focused on strengthening this culture, by teaching people how to empower those around them to be at their best and developing leadership internally, and by making further investments in our teams, most recently by adding benefits for our hourly employees, including increased paid vacation and sick days and tuition reimbursement. Today, we have developed more top performing managers and crews than ever before, and our field leadership knows that their success arises only when they completely devote themselves to the betterment of the people around them.”
For the rest of 2015, the Chipotle management says they are expecting a low-to-mid single digit sales increase for their comparable restaurants. Meanwhile, it also expects to open anywhere between 190 to 205 restaurants.