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Chipotle Mexican Grill up in premarket trade after better-than-expected second quarter earnings

Last updated: 04:46 27 Jul 2017 AEST, First published: 17:46 26 Jul 2017 AEST

Chipotle store
Chipotle said it was still too early to know the full impact of the norovirus outbreak

Chipotle Mexican Grill Inc (NYSE:CMG) shares rose in premarket trade on Wednesday, extending gains recorded yesterday after the gourmet burrito chain recorded better-than-expected earnings.

Chipotle shares rose 2.55% at $357.50 in premarket trade but then fell in the regular session 1.43% to $343.65.

In the second quarter, the company announced earnings rose to US$66.7mln, or US$2.32 a share, from US$25.6mln, or 87 US cents a share, a year ago.

Revenue grew 17.1% to US$1.17bn while same-store sales rose 8.1%. Analysts had targeted earnings of US$2.18 a share on revenue of US$1.19bn.

A sick worker blamed for norovirus outbreak at store

On Tuesday, the company blamed a worker who came into work while sick for the spread of norovirus around a suburban Washington DC store, resulting in more than 130 customers falling ill.

News about the outbreak sent Chipotle’s shares on a five day slide, erasing more than US$1bn off its market cap.

Chipotle founder and CEO Steve Ells during a second-quarter earnings conference call on Tuesday said: “We believe someone was working while sick.”

The company said it was still too early to know the full impact of the outbreak but was still moving ahead with plans to raise prices across the 2,300 restaurant chain.

However, chief financial officer John Hartung said that same-store sales at the 30 to 40 stores in the vicinity of the Sterling, Va., restaurant were off.

 

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