When Chipotle Mexican Grill Inc. (NYSE: CMG) released its fourth-quarter financial results after the markets closed on Wednesday, the company posted $1.72 in earnings per share (EPS) on $1.2 billion in revenue. That compared with consensus estimates of $1.34 in EPS and revenue of $1.19 billion, as well as earnings of $1.34 per share and $1.11 billion posted in the same period of last year.
During the most recent quarter, comparable restaurant sales increased 6.1%. At the same time, digital sales grew 65.6% in the quarter and accounted for 12.9% of sales.
Restaurant level operating margin was 17.0%, an increase from 14.9%. The improvement was driven primarily by leverage from the comparable restaurant sales increase. This was partially offset by increased marketing and promotional costs and wage inflation at the crew level.
Food, beverage, and packaging costs were 33.2% of revenue, a decrease of 100 basis points compared to the fourth quarter of 2017.
Looking ahead to the 2019 full year, the company expects to see comparable restaurant sales increase in the mid-single digit range. Consensus estimates call for $11.97 in EPS and $5.22 billion in revenue for the year.
CEO Brian Niccol commented:
I’m very pleased to report strong fourth quarter results with 6.1% comparable restaurant sales growth that included 2% transaction growth. For the full year, Chipotle’s average unit volumes exceeded $2 million with digital sales surpassing half a billion dollars. The growth acceleration this quarter gives us confidence that our strategy is working. When we connect with guests through great operations, relevant marketing focused on Chipotle’s great taste and real ingredients, and provide more convenient access, they respond enthusiastically.
Shares of Chipotle closed Wednesday at $525.85, with a 52-week range of $247.52 to $543.90. The stock has a consensus analyst price target of $489.16. Following the announcement, the stock was up 6% at $558.40 in the after-hours session.