Chipotle Mexican Grill (NYSE: CMG) is one of the best-performing restaurant stocks of the past 15 years. While early investors have made a lot of money on even a small investment, newer investors should still be encouraged by Chipotle’s recent business performance and its impact on the stock’s return.
Earnings per share have increased by 540% over the past five years. That huge increase in profitability helped the stock price rise 346%, which would have turned a $10,000 investment into $44,670. Management’s focus on profitably expanding the store base means the stock run is unlikely to be over.
Chipotle can continue to grow
Chipotle just filed another impressive first-quarter report. Revenue rose 14% year over year, while adjusted profits rose 27%. Management expects full-year comparable restaurant sales to increase in the mid- to high-single-digit range, which should translate into double-digit revenue and profit growth.
Management’s focus is on driving profitable growth for shareholders. This is why investors should be excited about the company’s plan to accelerate store openings.
The company opened 47 new restaurants in the first quarter, bringing its total footprint to nearly 3,500 stores in the US, Canada, Great Britain, France and Germany. It plans to open between 285 and 315 new locations this year, on its way to reaching its long-term goal of 7,000 restaurants in North America.
Chipotle has proven to be a top restaurant company. It survived a major crisis in 2015 over foodborne illnesses linked to its restaurants, and most recently the pandemic and rising inflation.
If a restaurant can overcome these challenges, chances are it will continue to reward its shareholders for years to come.
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John Ballard has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Chipotle Mexican Grill. The Motley Fool has a disclosure policy.
If you invested $10,000 in Chipotle Mexican Grill Stock five years ago, here’s how much you’d have today. originally published by The Motley Fool
