NEW YORK (TheStreet) - Chipotle Mexican Grill (CMG) ticked higher after reporting solid third-quarter earnings, driven by higher traffic and new restaurant openings. The burrito maker, however, fell short of Wall Street profit expectations as a result of rising food costs.
The Denver-based restaurant company reported net income rose 15.3% compared the same period last year, reaching $83.4 million, or $2.66 a share, for the September-ending quarter. Revenue climbed higher 18% to $826.9 million.
Analysts, according to Thomson Reuters, expect earnings growth of 22% from last year's third quarter, to $2.78 a share. Revenue was expected to climb 17%, to $820 million.
Comparable restaurant sales - an important metric for measuring store sales which excludes new restaurant openings -- rose 6.2% year over year, driven by increased traffic, Chipotle said. The number surpassed even the most bullish analysts' predictions for the quarter. Chipotle opened 37 restaurants in the quarter, bringing its total count to 1,539, including its first in Germany. The number was slightly below the 44 restaurants opened in the second quarter.
However, the company said restaurant level operating margin fell 60 basis points to 26.8%, as food costs as a percentage of revenue rose 100 basis points to 33.6%.
"Higher ingredient costs were driven by increased produce prices for tomatoes, corn and tomatillos in our salsas as well as higher costs for dairy and chicken, and finally, more expensive oils as we began converting from GMO soy oil to non-GMO sunflower and rice bran oils," the company said in the earnings release.
Shares were ticking 1.8% higher in post-market trading to $447.