Investopedia: Chipotle Still Smokin'

Like the smoked jalapeno it's named after, Chipotle Mexican Grill (NYSE:CMG) offers more than just heat. Chipotle continues to post eye-popping traffic growth and strong margins, and there still looks to be plenty of expansion potential. It is also worth noting, though, that Chipotle sports a valuation that may be too spicy for even the boldest growth investors.


Another Great Quarter
Chipotle once again delivered impressive growth, exceeding the high end of the analyst range with 24% overall growth and nearly $510 million in revenue. While new store openings continue to be an important part of the story, the existing outlets are doing exceptionally well too - same-store sales growth was 12.4% for the first quarter, with higher pricing chipping in less than 1%. (For more, see Should Investors Ignore Monthly Sales?)

Profitability was a little more mixed, but still good news for the most part. Store-level margins contracted almost a full point, but still stand at an impressive 25.2%. Similarly, operating margin contracted a bit (from 15% to 14.7%), but operating income growth was still 22%. Growth was restrained a bit by promotional expenses tied to a buy-one-get-one-free offer, as well as higher food costs. 



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