While many restaurants are struggling to remain profitable in the wake of the coronavirus pandemic, one food provider seems to prove resilient: Chipotle.
Chipotle Mexican Grill reported its first-quarter financial results on Tuesday after the market closed and the stock is climbing steeply in extended session trading, rallying 3.6%.
The company’s revenue in the first three months of 2020 increased 7.8% to $1.4 billion from a year earlier and was more or less in line with analysts’ expectations.
Chipotle said that digital sales were over twice as much in March, aiding the company to generate positive same-store sales growth despite increasingly stringent social-distancing measures that are hammering the foodservice and restaurant industry.
Chipotle reported earnings per share of $3.08 adjusted versus the $2.90 expected, and revenue of $1.41 billion versus the $1.41 billion anticipated by analysts, based on a survey of analysts by Refinitiv.
The Mexican chain released a fiscal first-quarter net income of $76.39 million, or $2.70 per share, down from $88.13 million, or $3.13 per share, a year prior, while net sales spiked 7.8% to $1.41 billion, and same-store sales climbed 3.3%, even though overall transactions slipped 1.4%.
Much of the company’s success may be due to its concentration on digital consumers, who are more likely to place orders for pickup in the era of quarantine and mandated shelter-in-place regulations.
Under CEO Brian Niccol, Chipotle has started growing its digital sales by enhancing the mobile app and exclusively partnering with DoorDash for delivery, and in March, it added Uber Eats as a delivery partner as well.
Financial expert Jim Cramer is a fan of the company as well, and advised on CNBC, “I think Chipotle’s good if you can get it under $800. Remember: this is a stock that is kind of impervious. Why? Because it’s got a great balance sheet and that’s what we’re looking at is balance sheets.”
For investors looking at ETFs that contain the Mexican restaurant, there are several to choose from. In addition to more common names like the SPDR S&P 500 ETF (NYSEArca: SPY), the Invesco Dynamic Leisure and Entertainment ETF (PEJ) and the Invesco DWA Consumer Cyclicals Momentum ETF (PEZ) are two of the ETFs with larger allocations of the stock.
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