The stock of Chipotle Mexican Grill (CMG) is marching higher after the restaurant chain posted better-than-expected second-quarter financial results.
The Newport Beach, California-based company reported earnings per share (EPS) of $0.34 U.S. compared to $0.32 U.S. that had been the consensus forecast of analysts.
Revenue in the quarter amounted to $2.97 billion U.S. versus $2.94 billion U.S. that had been expected on Wall Street. Sales were up 18.2% from a year earlier.
Chipotle also announced that its same-store sales rose 11.1% in Q2, beating estimates of 9.2%.
The company’s stock is up 4% on news of the latest financial results. In after hours trading, the share price rose as much as 14% before paring gains.
As has been the case over the last two years, Chipotle attributed the earnings beat to higher prices that it has used to offset ingredient costs for items such as avocados and oil.
The latest earnings beat comes at a time of upheaval at Chipotle Mexican Grill. In June, the company executed a 50-for-1 stock split.
At the same time, the company’s stock has declined more than 15% on concerns about the health of the restaurant industry and amid a social media backlash over perceptions that Chipotle has reduced its portion sizes. Management denies that portions have been cut.
The company noted in its earnings report that, despite the controversy, foot traffic at its restaurants increased 8.7% during Q2.
Management also stressed that the company continues to gain market share and restaurant transactions are growing across every income level – affluent to low-income.
Chipotle opened 52 new domestic restaurant locations and one new international outlet during the quarter.
The company reiterated its full-year outlook that same-store sales will grow by a mid- to high-single-digit percentage and that it plans to open 285 to 315 new restaurants this year.
Prior to today, Chipotle’s stock had increased 24% in the last 12 months and was trading at $51.78 U.S. per share.
