Chipotle Earnings Rocket 84% On Digital Sales Spike; McDonald's Serves Up Strong Results | Investor's Business Daily - Investor's Business Daily

Chipotle Mexican Grill served up a major first-quart surprise late Tuesday after fast-food giant McDonald's comfortably topped earnings views in the morning. CMG stock rose after hours following the results, trending near the top of a buy zone. MCD stock fell after briefly hitting a record high.

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Chipotle Earnings

Newport Beach, Calif.-based Chipotle Mexican Grill (CMG) clocked an earnings hot streak last year, averaging 28.75% quarterly growth and accelerating to 49% gains in Q4. Revenue growth for the fast-casual Mexican food chain wasn't quite as spectacular, averaging 14.5% growth in quarterly gains.

Results: Chipotle earnings rocketed 84% to $10.50 per share on a 17.2% revenue jump to $2.4 billion.

Expectations: Wall Street expected Chipotle to serve up a massive 57% earnings spike to $8.95 per share on 15.8% revenue growth to $2.34 billion.

Comparable restaurant sales increased 10.9%, beating FactSet estimates of 8.6% growth. In-store restaurant sales surged 22.9% while digital sales represented 39.3% of all food and beverage revenue.

Chipotle expects to open 255 to 285 new restaurants this year after opening 41 new locations in Q1. The company forecasts Q2 and full-year comparable sales growth in the mid to high-single digits.

CMG Stock

CMG stock jumped 5.2% in post-market trading to 1872.29 following results. Chipotle stock fell about 1% to 1,780 Tuesday after briefly hitting it highest level since November 2021. Shares are trading in the buy zone for a cup base after surpassing the 1,724.81 buy point on April 7. The current buy zone extends to 1,811.05.

CMG stock is trending toward its all-time high of 1,958.55 set in September 2021.

Chipotle's relative strength line is at 52-week highs and the stock has a 91 RS Rating. CMG stock has a near-perfect 98 EPS Rating. It has a perfect 99 Composite Rating, which combines a number of technical indicators into one easy-to-read score.

McDonald's Earnings

Results: McDonald's adjusted earnings leapt 15% to $2.63 per share. Revenue rose 4.1% to $5.89 billion, ending three quarters of year-over-year declines. GAAP earnings spiked 66% to $2.45 per share and included $180 million in restructuring charges.

Expectations: Analysts polled by FactSet expect McDonald's (MCD) adjusted earnings to rise 2.2% to $2.33 per share, while revenue edged down 1.4% to $5.585 billion. Sales stalled over the past three quarters, averaging a 3% decline during that time.

Comparable sales surged 12.6% for the quarter, topping estimates of  an 8.7% increase. McDonald's reported 11.8% comparable sales growth in Q1 2022 and 12.6% growth during Q4, respectively. All three of McDonald's business divisions reported 12.6% same-store sales growth for the quarter.

Traffic rose despite higher menu prices.

McDonald's Stock Action

A six-week advance has put MCD stock in a buy zone above its most recent consolidation. Shares broke out on April 3 after clearing the 281.77 buy point as shown in MarketSmith. The current buy zone, which extends 5% beyond the buy point, stretches to 295.85.

MCD stock rose to a record 295.16 early Tuesday, but reversed slightly lower, down 0.6% to 291.51. McDonald's stock gained more than 10% so far in 2023.

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