Chipotle Mexican Grill Inc. reported another disappointing
revenue increase, raising additional concerns about the restaurant
chain's growth prospects.
Sales rose 14% to $1.2 billion, but fell short of the average
analyst estimate of $1.22 billion, or 16% growth. Sales at
restaurants opened more than 13 months increased 4.3%, less than
analyst estimates of about 6%.
The company's share price, which fell more than $50 each after
the previous earnings report, dropped 6% to $633 in after-hours
trading. Momentum had been building in the stock, which has gained
about 12% this month.
Chipotle had been a highflying restaurant chain, securing
customers attracted to the restaurant's locally sourced food.
However, disappointing sales growth in the first quarter and
tougher year-to-year comparisons in 2015 raised concerns among
investors.
Chipotle warned in October that sales growth would slow to the
single digits in 2015 from double-digit gains in recent
periods.
Overall, Chipotle reported earnings of $140.2 million, or $4.45
a share, up from $110.3 million, or $3.50 a share, a year
earlier.
Food costs were 33.1% of revenue, a decrease of 1.5 percentage
points, as a result of the impact of increased menu prices, as well
as relief in dairy and avocado prices. Those results were partially
offset by increased beef and packaging costs, as compared with the
previous year.
The company opened 48 restaurants during the quarter, bringing
its total to 1,878.
Write to Neil Haggerty at neil.haggerty@wsj.com
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