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Chipotle reports strong Q1 sales, withdraws guidance

·Reporter
·3-min read
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Chipotle’s (CMG) first-quarter revenue was boosted by strong digital sales amid the coronavirus pandemic. Shares of the burrito giant opened more than 8% higher Wednesday morning.

Here were the main numbers for Chipotle’s first quarter, compared to Bloomberg estimates:

  • Revenue: $1.4 billion vs. $1.4 billion expected

  • Adj. earnings per share: $3.08 vs. $2.70 expected

  • Same-store sales: +3.3% vs. +1.8% expected

MIAMI, FL - MARCH 05:  Guacamole sits on a dish at a Chipotle restaurant on March 5, 2014 in Miami, Florida. The Mexican fast food chain is reported to have tossed around the idea that it would temporarily suspend sales of guacamole due to an increase in food costs.  (Photo by Joe Raedle/Getty Images)
Guacamole sits on a dish at a Chipotle restaurant on March 5, 2014 in Miami, Florida. (Photo by Joe Raedle/Getty Images)

Along with its fast-casual peers, Chipotle closed its dining rooms in mid-March and shifted strictly to takeout and delivery as social-distancing measures across the country kept people indoors. Digital sales during the first quarter grew 80.8% and represented approximately 26.3% of revenue. During March, digital sales grew 102.6% year-over-year and represented 37.6% of sales.

"I am grateful to all our employees for their commitment and efforts in providing guests access to our safe, delicious, high-quality food made from real ingredients during this unprecedented time," CEO Brian Niccol said in a statement. "Investing in digital over the last several years has allowed us to quickly pivot our business with Q1 digital sales reaching our highest ever quarterly level of $372 million.”

The burrito chain reported same-store sales growth of 12% in January, a 17% jump in February and same-store sales decline of 16% in March. During the week ending March 29, same-store sales plunged 35%, according to the company. Chipotle noted that sales have improved in April.

Management revealed on the earnings conference call that Chipotle went from having 8 million rewards members to 11.5 million during the first quarter.

Chipotle withdrew its prior fiscal 2020 guidance. In early February, Chipotle forecasted mid-single-digit comparable restaurant sales growth and planned to open 150 to 165 new restaurants in 2020.

As of the end of Q1, Chipotle had $909 million of cash, restricted cash and short-term investments and no debt.

Chipotle shares are down about 6% this year and have outperformed the broader market’s 15% decline during the same time period.

In addition, Chipotle agreed Tuesday to pay a $25 million criminal fine and put in place a food safety program to resolve adulterated food charges brought against the company by the U.S. Justice Department. The charges were brought against Chipotle after more than 1,100 people fell ill between 2015 to 2018 due to food-borne illness. According to the U.S. Attorney’s office of the Central District of Columbia, it was the largest fine ever for a food safety cause.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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