One of the unsung heroes of the stock market last year was Chipotle Mexican Grill (NYSE:CMG), which gained a massive 49% compared to a loss of 6% for the S&P 500. There are signs that the company is finally ready to move past the food-borne illness incidents that have plagued it in recent years. The addition of CEO Brian Niccol to the fold early in 2018 was seen as a triumph, as he had overseen the successful turnaround of Taco Bell, a subsidiary of Yum! Brands.

Chipotle is scheduled to release its fourth-quarter financial results after the market closes on Wednesday, Feb. 6. Let's take a look at the third quarter and some recent developments to see if they provide any insight into what investors can expect when the company reports.

A Chipotle burrito with a side of guacamole and chips.

Image source: Chipotle.

An impressive quarter by nearly every metric

For the third quarter, Chipotle reported revenue of $1.2 billion, an increase of 8.6% year over year, while adjusted earnings per share of $2.16 jumped 62%. The company even scored on the closely watched metric of comparable-store sales, which increased 4.4% year over year, though bears would point out that traffic fell 1.1%

The most impressive thing about these numbers is that more than half of the company's revenue growth was driven by the growing comps, while the remainder was the result of higher menu prices. Chipotle also saw significant improvement in its digital sales, which soared 48% year over year, as the company's mobile ordering initiative is taking hold.

Chipotle's restaurant margins expanded to 18.7%, up from 16.1% in the prior-year period, helping fuel the bottom-line growth.

Will recent changes help?

Chipotle announced early this year that it would provide customers with a series of new "Lifestyle Bowls" designed to help meet the strict regimens required by a number of popular diets. Some consumers have long complained that the average meal at the burrito specialist can easily top 1,000 calories, making it a tough sell for those looking to lose weight. The new meals for health-conscious patrons include options for those on the Whole30, paleo, and keto diets, as well as a double protein option for those who follow high-protein diets. 

This move could help the company attract customers that have historically avoided Chipotle and help swing the needle back to positive traffic comps. It was also no coincidence that these bowls were released just as consumers are looking to fulfill their New Year's resolutions. 

A Chipotle ad showing three salad bowls, reading: "Your Goals. Our Bowls. Try our new Lifestyle bowls: Keto, Paleo, Whole30, and Double Protein."

Image source: Chipotle.

A look ahead

Chipotle was pretty vague regarding its 2019 outlook, saying only that the company expects comparable-store-sales increases for the full year in the low- to mid-single digits. Chipotle pegged new restaurant openings for 2018 to come in at the low end of its previously announced range of 130 to 150. The company offered only a peek into 2019, saying it planned to open between 140 and 155 new locations.

In the absence of more detailed guidance, we can look to Wall Street, with the caveat that we don't want to get caught up in its short-term mindset. Analysts' consensus estimates are calling for revenue of $1.19 billion, an increase of 7.4% year over year, and earnings per share (EPS) of $1.34, a decline from the $1.55 achieved in the prior-year quarter. It's important to note that EPS in Q4 2017 had a one-time benefit of $0.21 from changes to U.S. tax law. Adjusting for the benefit results in EPS estimates that are flat compared to last year. 

Niccol has certainly done a remarkable job in turning Chipotle around during his short tenure as CEO. The stock has more than doubled since the chain announced he would take the reins.

We'll get a better picture of how the turnaround is progressing and whether the company can continue its upward momentum when Chipotle reports earnings.

Check out the latest Chipotle Mexican Grill earnings call transcript.