Chipotle jumps after profits more than double
Hollis Johnson
CMG Chipotle Mexican
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LOS ANGELES, July 25 (Reuters) - Chipotle Mexican Grill Inc's profit more than doubled on stronger sales, fewer giveaways and lower labor costs as the burrito seller tries to win back customers after food safety lapses tarnished its brand.
The company's shares rose nearly 3 percent in after-hours trading on Tuesday, a turnaround from last week when the Denver-based chain suffered yet another setback after it had to briefly close a restaurant in Virginia due to a health scare and a separate cleanliness issue at a Dallas venue.
"Recent events ... have shown that we still have a lot of opportunity to improve our operations and deliver the outstanding experience that our customers expect," Chipotle Chief Executive Steve Ells said in a statement.
Net income for the quarter was $66.7 million, or $2.32 per diluted share, compared with the year earlier profit of $25.6 million, or 87 cents per diluted share.
Restaurant-level operating margins improved to 18.8 percent from 15.5 percent a year earlier, helped by improved sales and reduced use of labor. Marketing and promotional expenses also declined as the company cuts back on giveaways aimed at luring back customers.
Revenue rose 17.1 percent to $1.17 billion.
Sales at restaurants open at least 13 months were up 8.1 percent increase in sales at restaurants open at least 13 months, less than the 9.5 percent gain expected by analysts polled by Consensus Metrix.
The company's stock had flirted around $750 before sales-crushing food safety issues in 2015, where outbreaks of E. coli, Salmonella and Norovirus linked to its restaurants, sickened hundreds of customers in the United States.
Chipotle shares were up 2.7 percent at $357.90 in extended trading.
(Reporting by Lisa Baertlein in Los Angeles; Editing by Bernard Orr)
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