Fast-casual restaurant chain operator Chipotle Mexican Grill, Inc. (NYSE: CMG) recently posted mixed results for the second quarter ended June 30, 2022. Revenues increased from the year-ago quarter but failed to surpass the street expectations. However, the bottom line numbers surpassed the consensus estimate of $9.04.
Following the results, shares of the company rocketed 9% to close at $1,435 in yesterday’s extended trade.
Revenue and Earnings Soar
Chipotle reported total revenues of $2.21 billion in the quarter. This signifies a growth of 17% from the previous year. The overall growth in revenues can be primarily attributed to the 10.1% and 35.9% year-over-year growth witnessed in comparable restaurant sales and in-restaurant sales, respectively. Yet, the figure failed to surpass the consensus estimate of $2.24 billion.
The company’s earnings per share (EPS) for the quarter came in at $9.30, up 24.7% from the prior year.
A Look at the Operating Metrics
During the quarter, the company opened 42 restaurants in 39 locations. With these openings, the company’s total restaurant count at the end of the quarter stood at 3,052 compared to 2,853 in the previous year.
Average restaurant sales at the end of the quarter came in at $2.7 million, up 11.4% from the prior year.
The company’s operating margin also improved from 13% in the previous year to 15.3%. the restaurant-level operating margin was 25.2%, compared to 24.5% in the prior year.
Chipotle’s Expectations for 2022
Chipotle expects to see third-quarter comparable restaurant sales growth in the mid to high-single digits, including planned price increases in August.
In terms of restaurant openings, the company expects to open 235 to 250 new restaurants in 2022.
Management’s Commentary
CEO of Chipotle, Brian Niccol said, “We are pleased with our second quarter performance during a period of inflation and consumer uncertainty. Our pricing power and value proposition remain strong as our culinary and food with integrity commitment continues to be a key point of differentiation.”
Wall Street’s Take
Consensus among analysts is a Strong Buy based on 17 Buys and 3 Holds. The CMG average price target of $1,771.65 implies upside potential of 34.6% from current levels. Shares have declined 28.3% over the past year.
TipRanks Website Traffic
TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Chipotle’s performance this quarter.
According to the tool, the Chipotle website recorded a 236.65% monthly rise in global visits in June, compared to the same period last year. Moreover, year-to-date, Chipotle website traffic increased by 88.62%, compared to the previous year.
The burgeoning website traffic of Chipotle rightly pointed out the company’s strong results for the quarter. The rising website traffic indicates that the company’s products and restaurants are a hit with the consumers and demand for the same remains solid.
Learn how Website Traffic can help you research your favorite stocks.
Key Takeaways
Chipotle’s year-over-year revenue growth for the quarter remained impressive, despite the prevailing economic headwinds. Moreover, the company’s rise in profitability is a testament to its prudent cost management.
Read full Disclosure
