Why investors cheered on Chipotle Mexican Grill’s earnings

Market Realist

Must-know: Chipotle Mexican Grill quarterly overview 2Q14 (Part 13 of 14)

(Continued from Part 12)

Share popped the day after the earnings

Chipotle Mexican Grill (CMG) reported its earnings on July 21 after the market closed. On July 22, shares began trading at $649.9, which was 10 % up from previous day’s closing of $589.93. The day’s high and low was $667.9 and $649.27, respectively.

Share volume was ~2.2 million shares. Chipotle Mexican Grill closed 11.8%, up at $659.97 according to NASDAQ.

 

Strong results

Same-store sales increased by 17.6% year-over-year. Also, revenues increased by 28.6% over the same period. The sales increase was primarily due to average transaction, which increased year-over-year by 9.4% during lunch and 13.3% during dinner on a year-over-year basis and average check. Average check grew due to a 2.5% average increase in menu prices. These strong results led to an above-expected earnings per share (or EPS) of $3.50. According to NASDAQ, Wall Street estimated an EPS of $3.05, which was 14.75% below the reported EPS.

Peers

Panera Bread (PNRA) reported company-operated same-store sales of 0.1% and an EPS of $1.82. Potbelly (PBPB) reported a 1.6% decrease in company-operated same-store sales and an EPS of $0.07. An investor can find and gain exposure to other Chipotle Mexican Grill’s peer through ETFs like the Consumer Discretionary Select Sector SPDR Fund (XLY) and the PowerShares Dynamic Food & Beverage ETF (PBJ).

Continue to Part 14

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