Chipotle Mexican Grill, Inc. (NYSE:CMG) released the results from its most recently completed quarter, posting earnings of $3.50 per share on revenue of $1.05 billion. Analysts had been expecting the fast casual chain to report earnings of $3.09 per share on $988.13 million in revenue.
In the same quarter a year ago, the company posted earnings of $2.82 per share on $816.8 million in revenue in the same quarter a year ago.
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Breaking down Chipotle’s earnings
Chipotle Mexican Grill’s revenue increased 28.6% year over year, while comparable restaurant sales rose 17.3%. The company’s net income of $110.3 million was a 25.5% improvement since last year. Chipotle reported that increased traffic and a small increase in average check size drove growth in comparable restaurant sales. The fast casual chain noted a benefit from its recent price increases, which it finished rolling out by the end of the quarter.
“We’re pleased that we continued to drive excellent results in the second quarter, including one of our strongest sales comps as a public company,” said Chipotle Founder, Chairman, and Co-CEO Steve Ells in a statement. “These extraordinary results are made possible by our special food culture, innovative people culture, and strong business model that are not only creating significant shareholder value, but also helping us realize our vision to change the way people think about and eat fast food.”
Food costs made up 34.6% of Chipotle’s revenue, a 150 basis point increase. The company said the menu price increase and lower tomatillo prices partially offset higher prices for beef, dairy products and avocados. The fast casual chain recorded a 27.3% operating margin at the restaurant level, a decline of 30 basis points.
During the quarter, Chipotle Mexican Grill also opened 45 new restaurants, bringing the total count of restaurants to 1,681.
Chipotle guides for 2014
This year, Chipotle Mexican Grill management said they expect to open between 180 and 195 new restaurants. They’re looking for comparable restaurant sales to increase by a rate in the middle teams and projecting about a 39.1% effective full year tax rate.