Chipotle Mexican Grill, Inc. (NYSE: CMG) stock surged over 13% on 22nd April, 2020 (As of 1:52 pm GMT-4 ; Source: Google finance)on better than expected results. CMG in the first quarter of FY 20 has reported the adjusted earnings per share of $3.08, beating the analysts’ estimates for the adjusted earnings per share of $2.90, according to analysts by Refinitiv. The company had reported the adjusted revenue growth of 7.8 percent to $1.41 billion in the first quarter of FY 20, which is in line with the analysts’ estimates for revenue of $1.41 billion. Same-store sales increased 3.3%, although overall transactions fell 1.4%. CMG’s digital sales posted growth 81% during the first quarter, with March digital sales more than doubling as the company shifted its marketing once states began advising residents to stay at home. The company has been offering free delivery since March 15. The company has also shifted advertising spending from live sports to more online and streaming platforms. Online sales formed 26.3% of the company’s quarterly revenue.
The stock reported fiscal first-quarter net income of $76.39 million, down from $88.13 million, a year earlier. The company’s digital sales have more than doubled in March, which helped the company to report positive same-store sales growth even as social-distancing measures roil the restaurant industry. The company withdrew its outlook for 2020, on the back of the volatility and uncertainty of Covid-19 on the U.S. economy. The company has also suspended its share buyback program on March 20 to preserve liquidity. The company intended to add between 150 to 165 new restaurants, about half of which will include a drive-thru lane for only digital orders. The company’s cash and cash equivalents stood at $500.32 million at the end of March, 2020.
Meanwhile, about 100 Chipotle restaurants are temporarily closed due to the pandemic. The majority of those locations are inside malls and shopping centers, as well as 17 European locations. Further, the company has responded to the COVID-19 outbreak by increasing hourly employee pay by 10% and handing out first-quarter bonuses, despite the low sales in March. The company has delivered 100,000 free burritos to health-care workers and is matching 10% of e-gift card purchases and donating the proceeds.
March same-store sales had fallen by whopping 16% after two months of double-digit growth. The chain hit its low point during the week ended March 29, with same-store sales plummeting 35%. However, the company’s sales had improved in April, adjusting for the Easter holiday.