Chipotle shares surge after strong quarter

Chipotle Mexican Grill shares surge after another strong quarter

Associated Press

NEW YORK (AP) -- Chipotle's popularity isn't showing any signs of fading, with the Mexican food chain reporting a fourth-quarter profit and sales that beat Wall Street expectations.

For the last three months of the year, the Denver-based company said sales rose 9.3 percent at locations open at least a year. By contrast, McDonald's had reported a decline of 1.4 percent for the same period. Even Starbucks, which has enjoyed strong growth, reported growth of 5 percent.

The figure is a key metric because it strips out the impact of newly opened and closed locations.

Chipotle Mexican Grill Inc. has surged in popularity in recent years, in part because people see it as being a step up from traditional fast-food chains such as Burger King and Wendy's. The chain's "Food with Integrity" slogan is intended to underscore the higher quality of its ingredients. In coming weeks, Chipotle is even introducing a series called "Farmed and Dangerous" on Hulu that satirizes the industrial farming system.

It's not just the messaging over its ingredients, however. Many customers simply like that they can walk down a line and customize the toppings they get on their burritos, bowls or tacos. The ability to dictate exactly what they want is also what has helped make Subway so popular.

Chipotle earned $79.6 million, or $2.53 per share, for the quarter. That's a penny more than analysts expected. A year earlier, the company earned $61.4 million, or $1.95 per share.

Revenue rose to $844.1 million, topping the $826.5 million Wall Street expected.

Its shares were up 11 percent at $55.20 in after-hours trading.

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