Chipotle beats Street on new items, digital

• Chipotle

Mexican Grill Inc. reported higher-than-expected quarterly comparable store sales growth on Tuesday, boosted by healthier meals and expanded delivery.

Sales at restaurants open for at least 13 months rose 11 per cent in the third quarter ended Sept. 30, beating analysts’ estimate of 9.27 per cent, according to IBES data from Refinitiv.

Net income rose to US$98.6 million, or US$3.47 per share, from US$38.2 million, or US$1.36 per share, a year earlier. The chain also reported adjusted earnings per share of US$3.82, a full 60 cents above a mean forecast of US$3.22, according to Refinitiv data.

CEO Brian Niccol struck a modest tone about the positive news. “We are still in the early stages of our journey, and we need to stay focused on our priorities,” he said during a call with investors.

Since Niccol took over as CEO in February 2018, the company’s turnaround plan has gained traction, putting behind it the E. Coli bacteria outbreaks that sickened customers in 14 states through early 2016.

Chipotle is getting results from digital and delivery, along with increased traditional advertising. It also has been investing in pick-up shelves to speed up to-go orders. Digital sales increased 88 per cent, the firm said.

The stock rose as much as 3.5 per cent in New York trading before paring much of the gain. It ended the day at US$831.07, down 2.4 per cent. Chipotle’s share price has nearly doubled since the start of this year.