The stock price of Chipotle Mexican Grill, Inc. (NYSE:CMG) surged 10% to $649.40 per share during the extended hours trading after the company reported strong second-quarter financial results.
Details of financial performance
According to restaurant chain operator said its earnings for the second quarter increased 24% to $3.50 per share and its revenue rose more than 28% to $1.05 billion.
Its financial result beat the $3.09 in earnings per share and $989 million in revenue estimated by Wall Street analyst.
During the quarter, Chipotle Mexican Grill, Inc. (NYSE:CMG) said its comparable restaurant sales climbed 17.3% primarily due to increased traffic and partly from menu price increases. The company fully implemented its menu price increases by the end of the quarter.
Chipotle Mexican Grill, Inc. (NASDAQ:CMG) said food costs account 34.6% of its revenue, an increase of 150 basis points due to the increase in the prices for beef, avocados and dairies, but partially offset by its menu price increases and lower tomatillo prices.
Its restaurant level operating margin declined 30 basis points to 27.3% due to higher food and marketing costs, but partially offset by favorable sales leverage in labor and occupancy costs.
Chipotle Mexican Grill, Inc. (NYSE:CMG) opened 45 new restaurants during the period.
In a statement, Steve Ells, co-founder, chairman and co-CEO of the company said, “These extra-ordinary results are made possible by our special food culture, innovative people culture and strong business model that are not only creating shareholder value, but also helping us realize our vision to change the way people think about and eat fast food.”
Chipotle organic produce, grass-fed, antibiotic-free meat
Chipotle Mexican Grill, Inc. (NYSE:CMG) is well-known for serving organic produce and meats that are free from antibiotic. According to Ells, the company started buying grass-feed, antibiotic free beef from Australia to help ease tight supplies.
The company is also attracting investors because it is delivering sales growth without increasing costs.
Business outlook
For the full year 2014, Chipotle Mexican Grill, Inc. (NASDAQ:CMG) expects its comparable restaurant sales to increase in the mid-teen and its effective tax rate to be around 39.1%. The company also expected to open around 180 to 195 new restaurants.
