By
Ibukun Ogundare
April 26th, 2023
Chipotle expects to open approximately 200 new outlets by the end of the year.
Despite reporting profitable Q1 earnings, Chipotle Mexican Grill Inc (NYSE: CMG) stock did not respond equivalently during Wednesday’s after-hours and today’s pre-market trading session. At the time of reporting, Chipotle stock was trading around $1,520, having added approximately %0.8 from yesterday’s close. Notably, Chipotle stock closed Wednesday trading at $1,507, having dropped by1.60% by the end of the day.
Chipotle Q1 Earnings Report
During the first three months of 2021, Chipotle Mexican Grill reported adjusted earnings per share of $5.36 versus $4.89 per share as expected by analysts. On the side of revenues, Chipotle Mexican Grill recorded a revenue of $1.74 billion, meeting exactly what analysts estimated.
The lack of notable volatility in the Chipotle stock market could have been due to the company’s prospects that perhaps do not meet investors’ expectations. Notably, as a chain of casual restaurants, the company was significantly hit by the onset of the Covid pandemic. However, the company noted that several factors contributed to the higher profits the previous quarter. Among them were new menu orders, online orders, and also the Federal government’s stimulus check.
According to the Q1 report, Chipotle recorded a net income of $127.1 million during the first three months. Last year a time like now, the company reported a net income of $76.4 million.
According to Chipotle Chief Executive Officer Brian Niccol, one out of ten customers ordered quesadillas during the first quarter. As a result of the huge demand for quesadillas, the company recorded its highest number of new customers in March.
In a bid to counter the constraints brought forth by the pandemic, Chipotle raised its delivery prices by 4% during the first quarter. Besides, the company raised its menu prices by an average of 13% according to CFO Jack Hartung. According to the company, most of the customers understood the challenges for delivering premium products adhering to covid prevention measures. “We haven’t seen a large amount of resistance from that, so I think that customers understand that a premium convenience experience has a premium cost associated with it,” said Chief Technology Officer Curt Garner in an interview.
Reportedly, the company opened 40 new outlets during the first quarter, whereby more than half of them were drive-thru lanes.
CMG Stock and Company’s Prospects
According to metrics provided by MarketWatch, CMG stocks rallied approximately 74% last year. Additionally, they are up around 8% since the beginning of the year. A survey conducted by the same website indicates CMG stock received an average rating of Over from 34 ratings.
During the earnings call, the company did not provide sales guidance for the rest of the year. However, Chipotle expects to open approximately 200 new outlets by the end of the year. The company also reported that it anticipates conducting different market tests for the menu this year.
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