(By Salman - iStockAnalyst Writer)Chipotle Mexican Grill (NYSE:
CMG) is scheduled to report third-quarter results after the market close on Thursday, October 22, 2009. Analysts, on average, currently expect the company to report earnings of 87 cents a share on revenue of $388.83 million. In the year ago quarter, the company reported earnings of 59 cents per share on revenue of $340.5 million.
Chipotle Mexican Grill, Inc. engages in the development and operation of fast-casual, fresh Mexican food restaurants in the United States and Canada. As of June, 2009, the company operated 886 restaurants in 33 states throughout the United States and in the District of Columbia; and Toronto, Canada. The company has topped analyst expectations in recent quarters. The company has been able to weather global economic recession rather well despite the fact that the chain is higher-priced than most quick-service restaurant. It is primarily because it serves premium-priced, naturally raised meats and locally grown produce. The company has a healthy balance sheet and strong cash position.
The Denver, Colorado based-company in July reported that its second-quarter net income jumped 44.7%, helped by new restaurant openings and an increase in menu prices. The company's net income for the quarter was $35.4 million or $1.10 per share, compared to $24.5 million, or $0.74 per share, in the prior year period. Quarterly revenue increased to $388.8 million from $340.8 million in the comparable quarter a year before. Analysts, on average, expected the company to report earnings of 88 cents per share on revenue of $391.19 million.
In the second-quarter of 2009, comparable restaurant sales were up 1.7% and restaurant level operating margins were 26% -- an increase of 360 basis points primarily due to menu price increases, more efficient labor staffing, and a decrease in marketing and promotional spend. Looking ahead, the company expects full-year comparable restaurant sales increases in the low single digits and 120-130 new restaurant openings.
The company has chalked out very aggressive and focused expansion plan. During the second quarter of 2009, Chipotle opened 24 new restaurants. The company expects to open between 120 and 130 restaurants in 2009, representing a growth of 14.3 to 15.5%. The company expects its first restaurant in London will open in 2010.
Last month, the restaurant chain warned that its third-quarter profit and sales would be hurt by reduced consumer spending and surging food costs. Chipotle said that it expects third-quarter net income to fall slightly below the year-ago figure of 62 cents a share. The company said sales at restaurants open at least a year would grow by a percentage in the low to middle single digits. Its previous comparable-restaurant sales forecast called for sales to grow by a middle-single-digit percentage. The company said further that in order to combat the rising cost of ingredients, it plans to implement a national pricing strategy for its menu.
Late in August, Chipotle released mobile ordering app, giving iPhone and iPod touch users the ability to create their favorite Chipotle order, place it at the Chipotle location of their choice, and also pay for their food direct from their device.
In terms of stock performance, Chipotle shares are up almost 50% since the beginning of the year. The Shares are trading at 89.14 (down 2.53%) 1:01pm ET Tuesday afternoon.
Disclosure: Author doesn't own any of the stocks discussed here.
