Outdoing analyst earnings expectations, fast casual Mexican-style restaurant chain Chipotle Mexican Grill (NYSE:CMG) reported strong first-quarter results yesterday for the period ended March 31. Besides strong gains, the company says its digital sales are flourishing, and noted a positive reception to several new items added to its menu.
The company narrowly missed Wall Street's revenue forecast based on the consensus estimate data provided by Zacks Equity Research, delivering a 0.27% negative surprise with its $1.74 billion top line. However, revenue still surged 23.4% year over year compared to Q1 2020's $1.41 billion. Adjusted earnings per share, or EPS, surprised positively by almost 9%, beating analyst predictions of $4.92 with an actual result of $5.36. This is also a 74% rise from last year's $3.08 EPS.
Comparable-store sales, or comps, jumped 17.2%. Notably, digital orders have now overtaken in-person orders, edging up to 50.1% of total sales and expanding 133.9% year over year. Chipotle says some digital growth comes from "the added convenience of more Chipotlanes" and that "more than half of the digital sales were from order-ahead transactions."
This data lends support to Chipotle's decision to emphasize digital development after initial reluctance to explore this sales avenue. With its new digital focus, Chipotle recently invested in a privately held robotic delivery vehicle company, Nuro. The company also highlights how 26 of the 40 new restaurants it opened in Q1 feature the highly popular "Chipotlanes."
While Chipotle's results look strong overall, the company's shares were down in Thursday morning trading. This may from the company's lack of firm sales guidance due to ongoing COVID-19 uncertainty, alongside its conservative guidance for 200 new restaurant openings for all of 2021.