Chipotle Mexican Grill
Second-quarter net income increased 9%, to $50.7 million, or $1.59 per share. More hearteningly, Chipotle's second-quarter sales surged 22.4%, to $571.6 million, and same-store sales skyrocketed by 10%.
Unfortunately, the high price of foodstuffs forced Chipotle to skimp on the prices. Its restaurant-level operating margin plunged 110 basis points to 25.8%.
As a result, Chipotle missed analysts' estimates by $0.09 per share. Legal expenses related to a federal probe into the company's hiring of illegal immigrants also dragged down Chipotle's bottom line.
As far as other drags go, rising food prices and a difficult consumer climate will hurt plenty of restaurants besides Chipotle. For example, higher beef costs this year could seriously squeeze weakened stocks like Ruth's Hospitality
In short, investors should cut Chipotle a break for its profit miss, given its robust sales and comps figures. Customer traffic isn't Chipotle's problem, even though fewer people have the disposable cash to eat out. That says a lot.
Still, potential investors craving a bite of Chipotle shares probably wish the stock had sold off far more significantly than it has today. After all, it would be nice to get this high-quality stock at a cheaper price than a whopping 54 times earnings.