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Home / Business / Chipotle's earnings exceed estimates and increase sales prospects for the same businesses

Chipotle's earnings exceed estimates and increase sales prospects for the same businesses



Chipotle Mexican Grill reported gains and earnings that exceeded analysts' expectations on Wednesday after doubling digital revenue in the quarter.

9659006Here'swhatthecompanysaidcomparedtowhatWallStreetexpectedbasedonananalystsurveyfromRefinitiv:

  • Earnings per share: $ 3.40, adjusted, vs. $ 3.01 expected [19659008] Revenues: $ 1.31 billion vs. $ 1.27 billion expected
  • Revenue growth in the same business: 9.9% vs. 7.29%

Tax laws first reported Net income for the quarter was 88.1 Millions of dollars, or $ 3.13 per share, compared to $ 59.4 million, or $ 2.13 per share, in the previous year.

Excluding restaurant impairment charges, corporate restructuring, and other costs, the Mexican food chain earned $ 3.40 per act he share, which exceeds $ 3.01 per share, is expected by analysts surveyed by Refinitiv. Price increases at the end of 2018 helped reduce food, beverage and packaging costs, but were partially offset by increased demand for steaks.

Net sales [19659003] increased 13.9% to $ 1.31 billion, exceeding expectations of $ 1.27 billion.

In particular, the digital revenue increased in the quarter by 100.7%, which corresponds to 15.7% of total revenue. Executives would not disclose what percentage of digital revenue comes from supply contracts.

In March, Chipotle launched its nationwide points-based loyalty program. Less than a week later, the company outperformed its one millionth member, the one-year-old Chipotle. According to the Barclays note, the program has already helped to boost mobile app downloads. The company plans to use consumer data to better address the loyalty program members.

During the company's earnings conference call, Niccol said the reward program has grown to 3 million members.

The Loyalty Program is just part of Chipotle's digital engagement strategy. The company has a partnership with third-party DoorDash delivery service. In late 2018 and the first week of 2019, Chipotle offered a free delivery to promote the partnership. Niccol told investors that nearly half of the free delivery burrito bowls were new or decayed customers. Even after the end of the action, Chipotle saw increased customer loyalty.

Investments have also been made in the modification of its restaurants to facilitate delivery and digital pickup for customers, such as pick-up shelves and transit windows, called chipotlanes.

Sales in the same store increased by 9.9%, driven by a 5.8% increase in restaurant transactions. This is the fifth quarter in a row that Chipotle has grown in the same homes. The reported sales in the same store have a negative impact of 0.30% in anticipation that customers will be able to redeem loyalty programs.

The company increased its sales prospects for the same business for 2019. It now forecasts mid to high single-digit sales. Business growth is at least a year open. The company had previously anticipated mid-single-digit growth.

The company opened 15 stores and closed two locations, bringing the total number of restaurants to 2,504. Chipotle reiterated its forecast to open between 140 and 155 branches in 2019.

Investors were optimistic under Niccol's leadership. When he led Taco Bell, he was known for developing innovative products. For the first time since 2015, the company's share price reached $ 700 per share at the end of March, when a Chipotle-related E. coli outbreak with several states led to a collapse in equities. The share has so far increased by more than 64% in 2019.

"They are on their way back, but I think one of the key points [reasons] was the marketing and appreciation of the dollar towards national marketing versus local commercialization." BTIG analyst Peter Saleh said to CNBC's "Closing Bell."

In 2018, Chipotle launched the national advertising campaign "For Real", which focuses on its ingredients. Two months ago, they released "Behind the Foil," ads in documentary that show how the chain prepares its ingredients before they end up in a client's burrito.


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