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Chipotle serves another tasty quarter, stock jumps

DENVER (AP) -- Chipotle Mexican Grill Inc. showed Thursday that diners can't seem to get enough of its burritos, bowls and tacos.

The Denver-based casual dining chain reported after the market closed that its second-quarter revenue and net income rose as it added restaurants and lured more spending at established locations.

Chipotle earned $87.9 million, or $2.82 per share, for the quarter that ended June 30. That compares with $81.7 million, or $2.56 per share, earned in the same quarter last year. Its revenue increased 18 percent to $816.8 million from $690.9 million, due largely to the addition of 44 new stores during the period.

Analysts were anticipating earnings of $2.82 per share on revenue of $803.1 million, according to a poll by FactSet.

Chipotle said that its revenue from stores open at least a year increased 3.4 percent. This is considered a key indicator of performance as it strips way the impact of recently opened or closed stores.

The company, which opened 20 years ago this month, has grown from one restaurant serving burritos and tacos into a national brand with 1,502 stores as of the end of the most recent quarter.

Steve Ells, Chipotle's founder, chairman and co-CEO, believes the company has helped change the way people think about fast food with its focus on fresh ingredients. He said the company continues to evolve, including the addition of a vegan tofu entree at its restaurants in California during the quarter.

The company plans to expand the tofu test to its restaurants in the Pacific Northwest this month, and is considering adding it to additional markets this fall.

While the company has done well with its growth thus far, Chipotle still faces many of the same challenges as its peers.

Chipotle said that increased costs for chicken, dairy items and ingredients for salsa drove its costs higher, which was partially offset by lower avocado prices. It also had slightly higher legal and payroll costs during the period, partially offset by sales gains.

Additionally, a tax adjustment lowered its earnings for the period by 3 cents per share.

Chipotle did not give a full-year earnings forecast on Thursday but said it expects to open 165 to 180 new restaurants during the year.

Shares of the company rose $16.37, or 4.4 percent, to $393.12 in after-hours trading following the report. The stock added 98 cents to close regular trading at $376.75.

Chipotle shares have consistently outperformed the broader market since 2009.