Analysis: CMG

A big surge in restaurant sales this past quarter pushed Chipotle ( CMG) to a strong beat on the bottom line, but the restaurant chain did come up a bit short on the revenue line.
For the quarter, the company said sales rose a robust 35.9%; digital sales were about 39% of total revenue. Margins were up to 15.3%, higher than prior levels. Operating margins were healthy too, increasing by 70 basis points. The company expects to open up 235-250 new restaurants in 2022 and 10-15 relocations to add a chipotlane, a wildly popular concept for Chipotle fans.
The company sees comparable store sales in the mid- to high-single digits -- that is above estimates. Sales missed, however, 2.21 billion vs. the 2.24 billion estimate, but bottom-line earnings were a solid beat, $94.30 vs. $9.05. Chipotle stated that price increases helped shield the company from rising costs. We like the story here on Chipotle and would not be averse to adding more shares.

AAP is long CMG.