Stock in Chipotle Mexican Grill Inc. jumped more than 5 percent on Tuesday after the fast-casual chain reported unexpectedly strong same-store sales and margins.
Same-store sales increased 17.8 percent in the first quarter ended March 31, as the burrito chain continued to recover from a year long sales slump after a series of foodborne illness outbreaks in 2015.
Higher sales also meant higher margins, a key element to investors eager to see the company return to its highly profitable ways. Restaurant level operating margins increased 6.8 percent to 17.7 percent.
“2017 is off to a strong start, as our restaurant managers and teams are energized by our renewed focus on the customer,” company founder and CEO Steve Ells said in a statement.
Investors had been expecting a comeback at Chipotle, which made Ells the sole CEO following the departure of former co-CEO Monty Moran, and which unleashed a major ad campaign in April. The stock had been up 26 percent on the year before the Tuesday evening jump.
Revenues in the quarter increased 28.1 percent in the quarter, to $1.07 billion.
Net income in the period was $46.1 million, or $1.60 per share, up from a loss of $26.4 million, or 88 cents, a year ago.
The company expects full-year same-store sales to be in the “high single digits for the year. It also expects to open 195 to 210 new restaurants in 2017.
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