Summary
Chipotle Mexican Grill Inc. (CMG) reported solid revenue growth of 7.4% to $1.15 billion for the first quarter of 2018, driven by comparable restaurant sales increases of 2.2% and the addition of new units. Despite a slight decrease in transactions, an increase in average check, attributed partly to menu price increases, helped boost sales. The company also saw a favorable shift in restaurant operating costs as a percentage of revenue to 80.5% from 82.3% in the prior year, primarily due to reduced marketing spend. While net income rose to $59.4 million from $46.1 million in the prior year, and diluted EPS increased to $2.13 from $1.60, investors should note the ongoing legal proceedings and investigations, particularly those related to the 2017 data security incident. The company also announced a new $100 million share repurchase authorization, indicating a commitment to returning capital to shareholders. Management expects full-year comparable restaurant sales to be in the low single digits.
Financial Highlights
46 data points| Revenue | $1.15B |
| Operating Expenses | $1.06B |
| Operating Income | $92.81M |
| Net Income | $59.45M |
| EPS (Basic) | $0.04 |
| EPS (Diluted) | $0.04 |
| Shares Outstanding (Basic) | 1.40B |
| Shares Outstanding (Diluted) | 1.40B |
Key Highlights
- 1Revenue increased by 7.4% to $1.15 billion for the first quarter of 2018.
- 2Comparable restaurant sales increased by 2.2%, driven by higher average checks (4.9% from menu price increases) partially offset by fewer transactions.
- 3Restaurant operating costs as a percentage of revenue improved to 80.5% from 82.3% in the prior year, aided by lower marketing and promotional spending.
- 4Net income grew to $59.4 million, or $2.13 per diluted share, from $46.1 million, or $1.60 per diluted share, in the first quarter of 2017.
- 5The company opened 35 new restaurants and expects to open between 130-150 new locations in 2018.
- 6Chipotle announced an additional $100 million share repurchase authorization, bringing the total available for repurchase to $50.2 million as of March 31, 2018.
- 7The company is facing ongoing litigation related to the 2017 data security incident, with an estimated accrual of $30 million as of March 31, 2018.