Chipotle surges after crushing earnings thanks to cheaper avocados (CMG)

Avocado


Chipotle surged more than 6% in after-hours trading Thursday after the burrito chain posted earnings that topped Wall Street expectations.

For the second quarter, Chipotle said it earned an adjusted $2.87 per share, while analysts had expected $2.76. It also posted revenue of $1.267 billion, compared to the consensus Wall Street estimate of $1.261.

Cheaper avocado prices were to thank for the extra earnings power, the company said, citing food costs that were down 150 basis points to 32.6% of revenue.

Same-store sales, a closely watched metric for restaurant chains, increased 3.3% over the same quarter in 2017.

“I’m pleased to report a solid second quarter with sales and restaurant margins ahead of expectations,” Brian Niccol, Chipotle’s CEO, said in a press release. “While we made progress during the quarter with particular strength in digital sales, I firmly believe we can accelerate that progress by executing our reorganization and our strategy to win today and cultivate tomorrow.”

Shares of Chipotle are up 60% since the beginning of the year, but are still well off their high of more than $750 set in 2015 before a spate of food poisoning outbreaks sent the stock spiraling as low as $247.

Chipotle stock price

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Read the full article from it’s original source: http://uk.businessinsider.com/chipotle-stock-price-surges-on-earnings-report-cheaper-avocados-2018-7

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