Chipotle Beats Sales Expectations and Pledges More Change Ahead

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Chipotle Mexican Grill
Inc.


CMG 1.93%

is lastly giving buyers one thing to really feel glad about.

The burrito maker’s shares rallied late Wednesday after the corporate posted better-than-expected revenue and gross sales for its first quarter.

Chipotle has struggled for greater than two years to win again prospects after a sequence of meals security scares. In February, the chain named

Brian Niccol,

previously chief government of Taco Bell, its new CEO, rather than founder Steve Ells.

Presiding over his first earnings name as Chipotle’s CEO, Mr. Niccol on Wednesday thanked Mr. Ells—who stays chairman of the board—for giving him the autonomy to call his personal group and make modifications to the chain’s technique. Mr. Niccol already has employed a brand new advertising chief and human sources head.

“The opportunity is clearly a recovery story in the U.S.,” Mr. Niccol stated. He wouldn’t elaborate on his plans. He stated he would maintain a name to debate his restoration plans with buyers in additional element earlier than Chipotle’s subsequent quarterly earnings report. Shares, down 28% over the previous 12 months, rose greater than 10% to $374.99 in after-hours buying and selling Wednesday.

Chipotle just lately launched ads showcasing the standard of its components. Analysts had criticized a earlier marketing campaign that didn’t deal with the chain’s meals, and Mr. Niccol stated the corporate will do extra testing of adverts to know what resonates.

“Since Brian’s arrival we’ve taken a fresh look at every part of our business,” Chief Financial Officer

Jack Hartung

stated on the decision.

Chipotle’s income rose 7.four% within the newest quarter after the quick-service restaurant chain raised menu costs. The firm additionally opened 35 new eating places and noticed a 2.2% enhance in comparable restaurant gross sales.

Analysts polled by FactSet had estimated a 1.three% enhance in same-store gross sales. First-quarter income rose to $1.15 billion from $1.07 billion a 12 months earlier.

The Denver-based firm reported a revenue of $59.four million, or $2.13 a share, up from $46.1 million, or $1.60 a share, a 12 months earlier. Analysts polled by Thomson Reuters had forecast earnings of $1.57 a share on $1.15 billion in income.

For 2018, the corporate stated it expects comparable restaurant gross sales to extend within the low-single digits. It additionally expects to open between 130 and 150 new eating places.

Write to Julie Jargon at [email protected] and Aisha Al-Muslim at [email protected]

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