Chipotle Beats Earnings And Revenue Expectations
REUTERS/Lucy Nicholson
Chipotle Mexican Grill's second quarter financial results are out.
The fast food chain reported earnings of $2.82 per share, slightly above estimates for $2.81 EPS.
Revenues also came in above expectations, at $816.8 million versus $802.77 million.
The company said same-store sales increased 5.5% during the second quarter.
Shares are up nearly 6% in after-hours trading.
Below is the full text from the release.
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DENVER--(BUSINESS WIRE)--
Chipotle Mexican Grill, Inc. (CMG) today reported financial results for its second quarter ended June 30, 2013.
Highlights for the second quarter of 2013 as compared to the second quarter of 2012 include:
Revenue increased 18.2% to $816.8 million
Comparable restaurant sales increased 5.5%
Restaurant level operating margin was 27.6%, a decrease of 160 basis points
Net income was $87.9 million, an increase of 7.6%
Diluted earnings per share was $2.82, an increase of 10.2%
Opened 44 new restaurants
Highlights for the six months ended June 30, 2013 as compared to the prior year include:
Revenue increased 15.9% to $1.54 billion
Comparable restaurant sales increased 3.4%
Restaurant level operating margin was 27.0%, a decrease of 130 basis points
Net income was $164.4 million, an increase of 13.9%
Diluted earnings per share was $5.27, an increase of 16.3%
Opened 92 new restaurants
“This month marks Chipotle’s 20th anniversary. What started out as one restaurant serving burritos and tacos, has evolved into a national brand which is changing the way people think about and eat fast food. Our vision has connected with our loyal customers, who visit Chipotle to enjoy great tasting food made from premium ingredients. It's rewarding to look back and see what we've accomplished, but it's even more inspiring to think about what lies ahead over the next twenty years.” said Steve Ells, Founder, Chairman and co-CEO of Chipotle.
Second quarter 2013 results
Revenue for the quarter was $816.8 million, up 18.2% from the prior year period. The growth in revenue was the result of new restaurants not in the comparable base and a 5.5% increase in comparable restaurant sales. Comparable restaurant sales growth was driven by increased traffic and from the benefit of one additional trading day in the quarter as compared to the second quarter of 2012.
During the quarter we opened 44 new restaurants, bringing the total restaurant count to 1,502.
Food costs were 33.1% of revenue, an increase of 100 basis points driven by higher commodity costs. Higher commodity costs were driven by increased prices for all of our salsa ingredients, as well as for dairy items and chicken. These increases were partially offset by lower avocado prices.
Restaurant level operating margin was 27.6% in the quarter, a decrease of 160 basis points from the prior year period. The decrease was primarily driven by higher food and marketing costs.
General and administrative expenses were 6.2% of revenue, an increase of 10 basis points due to higher legal and payroll costs partially offset by favorable sales leverage.
Net income for the first quarter of 2013 was $87.9 million, or $2.82 per diluted share, compared to $81.7 million, or $2.56 per diluted share, in the second quarter of 2012. Income taxes were negatively impacted by non-recurring tax adjustments that reduced earnings by $0.03 per share.
Results for the six months ended June 30, 2013
Revenue for the first six months of 2013 was $1.54 billion, up 15.9% from the prior year period. The growth in revenue was the result of new restaurants not in the comparable base and a 3.4% increase in comparable restaurant sales. Comparable restaurant sales growth was primarily driven by increased traffic.
During the first six months of the year, we opened 92 new restaurants, bringing the total restaurant count to 1,502.
Restaurant level operating margin was 27.0% for the first six months, a decrease of 130 basis points from the prior year period. The decrease was primarily from higher food costs and higher marketing costs.
General and administrative expense for the first six months of 2013 was 6.2% of revenue, or a decrease of 70 basis points from the prior year period. The decrease was from lower stock based compensation expense and lower employee related payroll taxes.
Net income for the first six months of 2013 was $164.4 million, or $5.27 per diluted share, compared to $144.3 million, or $4.53 per diluted share, in the first six months of 2012.
“We are delighted with our strong financial performance during the second quarter. We know that empowered cultures create excellent teams, who deliver a special dining experience for each customer who visits Chipotle. They attract great employees and develop them to be the very best leaders from within the organization, which not only supports our great operations, but also makes our strong performance sustainable as we add more restaurants,” said Monty Moran, co-CEO
Outlook
For 2013, management expects the following:
165 – 180 new restaurant openings
Low to mid single digit comparable restaurant sales
An effective full year tax rate of approximately 38.9% (39.4% for the remainder of 2013).
Definitions
The following definitions apply to these terms as used throughout this release:
Comparable restaurant sales represent the change in period-over-period sales for the comparable restaurant base. A restaurant becomes comparable in its 13th full calendar month of operation.
Average restaurant sales refers to the average trailing 12-month sales for restaurants in operation for at least 12 full calendar months.
Restaurant level operating margin represents total revenue less restaurant operating costs, expressed as a percent of total revenue.
Conference Call
Chipotle will host a conference call to discuss the second quarter 2013 financial results on Thursday, July 18, 2013 at 4:30 PM Eastern time.
The conference call can be accessed live over the phone by dialing 1-888-337-8192 or for international callers by dialing 1-719-325-2284. A replay will be available one hour after the call and can be accessed by dialing 1-877-870-5176 or 1-858-384-5517 for international callers; the password is 6035922. The replay will be available until July 25, 2013. The call will be webcast live from the company's website at chipotle.com under the investor relations section. An archived webcast will be available one hour after the end of the call.
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