Popular restaurant chain Chipotle Mexican Grill (CMG) has been one of the most successful restaurant businesses in recent history, establishing more than 1,750 locations that produced over $4 billion in revenues in 2014, and helping to create the increasingly popular, quality concerned fast-casual restaurant category. The company's success has been seen on Wall Street as well, with CMG's share price currently trading over 1000% higher than its initial offering price from when the company went public in 2006.
CMG has a menu with a focus of burritos, tacos, burrito bowls and salads that are made with fresh, high quality ingredients, prepared using classic cooking methods. Through its "Food with Integrity" program, CMG is seeking better food not only created from a variety of fresh ingredients, but with ingredients that are sustainably grown and naturally raised with respect for the animals, land and farmers that are involved in the food production. CMG recently became the first national restaurant chain to use only ingredients that are GMO-free.
Just as many in the restaurant industry have, CMG has felt pressures from increased food costs, especially due to the company's fragmented nature of the organic supply chain it taps into. Just earlier this year CMG cut its ties with a pork supplier, and although they have found a new supplier, the effects are something investors are still looking for in this quarter's earnings report.
In addition to increased food costs, CMG has also had to face increased labor costs as of late, and investors will be looking for the effects of both on the company in its earnings report. Though the estimate for the company's earnings is lower than what it was 90 days ago, there has been 2 analysts that raised their estimates in the last 7 days, compared to 1 analysts lowering their estimate for the period. Also, CMG has a great history of beating earnings estimates, having positive beats in each of the last 4 quarters with an average surprise of 7.77%.
CMG is currently a Zacks Rank #3 (Hold), though that ranking has the potential to change after the release of the company's most recent earnings report. Below are some figures that have been highlighted from the recently released report:
Earnings: Chipotle was able to beat on earnings, reporting an EPS of $4.45, higher than the Zacks Consensus Estimate of $4.41.
Revenue: Chipotle was able to meet revenue estimates. The company was estimated to have, and did have, revenues of $1.2 billion for the second quarter.
Key Stat to Note: Chipotle had net income of $140.2 million, a 27.1% increase from Q2 of 2014. The company also saw year over year comparable restaurant sales growth of 4.3% during the quarter.
Stock Price: As of 4:15 PM ET, CMG's stock decreased by 5.51%, or $37.07, to $636.00 in after hour trading, shortly after the release of its earnings report.
Be sure to check back later for a full report on CMG 's most recent earnings report!