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Chipotle Earnings: 6 Metrics You Must See

By Daniel Sparks – Updated Jul 21, 2021 at 9:08AM

Key Points

  • Chipotle's revenue growth rate was helped by an easy year-ago comparison.
  • Digital sales accounted for nearly half of total sales.
  • Management expects more double-digit comparable restaurant sales growth in Q3.

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There's a lot to like in the report. Revenue surged, new restaurant openings accelerated, and guidance looks robust.

Shares of fast-casual burrito chain Chipotle Mexican Grill (CMG 4.78%) jumped during after-market hours on Tuesday, rising more than 4%. The stock's big gain followed the company's strong second-quarter results, which featured soaring sales and a bullish outlook from management.

"Chipotle's second quarter results highlight the strength of our brand and our people, as we demonstrated growing momentum in the business," said Chipotle CEO Brian Niccol in the company's earnings release.

Here's a closer look at some of the impressive metrics from the quarter.

Chipotle online order bag.

Image source: Chipotle Mexican Grill.

1. Revenue soared

Chipotle's revenue surged 38.7% year over year to $1.9 billion. This was fueled by a 31.2% increase in comparable restaurant sales, or sales at restaurants open at least 13 full calendar months. 

Of course, Chipotle was up against an easy year-ago comparison. Sales at the fast-casual specialist decreased 4.8% year over year in the second quarter of 2020 as consumers suddenly started sheltering at home during the COVID-19 pandemic. 

2. Digital sales remain key

Chipotle's digital sales have been critical to the company's ability to be agile and return to growth during a pandemic. Even in the second quarter of 2020, when total revenue was down 4.8% year over year, digital sales soared 216% year over year and accounted for 60.7% of sales.

Despite facing such a tough comparison when it comes to digital sales, Chipotle is still bringing in record levels of demand from its digital flywheel. Digital sales rose 10.5% year over year during the second quarter of 2021, accounting for nearly half of sales.

3. A healthy restaurant-level operating margin

Capturing the company's scalable business model, Chipotle's restaurant-level operating margin was 24.5%, up from 22.3% in the first quarter of 2021 and 1,230 basis points over where it was in the year-ago quarter.

4. Skyrocketing earnings per share

Earnings per share came in at $6.60, up from $0.29 in the year-ago quarter and $4.45 in the first quarter of 2021.

In a nod to the company's increasingly lucrative business, Niccol said, "Strong restaurant level economics combined with significant restaurant growth should allow us to optimize earnings power for many years to come."

5. Accelerated growth in restaurant openings

Speaking of restaurant growth, Chipotle opened 56 new restaurants during the period while closing five. These new openings included one relocation.

This compared to 40 new restaurants and five closures in the first quarter of 2021.

6. Impressive guidance

As if this business strength wasn't enough to excite investors, management provided some impressive guidance for comparable restaurant sales to grow at a year-over-year rate that is in the low-to-mid double-digit range.

Overall, Chipotle's second-quarter results demonstrate both strong business momentum and an attractive business model.

Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Chipotle Mexican Grill. The Motley Fool has a disclosure policy.

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