Shares of Chipotle Mexican Grill and McDonald's were in motion on earnings news early Thursday. Domino's Pizza tracked toward its fifth straight weekly advance after delivering a mixed performance Monday. CMG stock and MCD stock are just below buy points.
Chipotle Mexican Grill posted mixed Q2 results late Wednesday. Adjusted earnings spiked 36% to $12.65 per share. That was well above expectations, but nevertheless marked a slowdown after four quarters of accelerating gains, . Revenue increased 13.6% to $2.5 billion.
Analysts expected the fast-casual food chain to report earnings of $12.31 per share on $2.53 billion in revenue.
Chipotle opened 47 new restaurants during the quarter, including 40 locations with "Chipotlane" drive throughs. Comparable restaurant sales increased 7.4% during the period while the company's operating margin increased to 17.2% from 15.3% last year.
For the third quarter, Chipotle guided comparable restaurant sales growth in the low to mid-single digit range. Full year comparable sales are expected to increase in the mid to high-single digits. The company plans to open 255 to 285 new restaurants this year, including up to 15 relocations to add drive throughs, depending on construction, permit and material delays.
CMG Stock
CMG stock fell 9.8% Thursday after easing lower Wednesday. Chipotle stock was trading below a 2139.88 buy point prior to diving, after topping that flat base entry on July 18. However, the fall after earnings triggered the 7% to 8% sell rule.
CMG stock has so far bolted about 36% in 2023.
McDonald's Earnings
Dow Jones burger behemoth McDonald's reported early Thursday its diluted, non-GAAP EPS jumped 24% to $3.17. Analysts had expected the world's largest fast food chain to announce a 9% earnings increase to $2.78 per share.
Revenue rose almost 14% to $6.498 billion. Analyst projected a 10% jump to $6.29 billion.
The quarter marked a sharp upturn for the Chicago-based chain, which has averaged 9% earnings growth and a 1.25% dip in revenue during over the past four quarters.
Promotional meals celebrating the 52nd birthday of the McDonald's character Grimace, originally introduced as the milkshake stealing "Evil Grimace," helped drive U.S. comparable store sales up 10.3% for the quarter. That is vs. a 3.7% gain a year ago. Global same-store sales rose 11.7%.
Analyst had forecast U.S. comparable sales of 9.1%, with a 9.4% gain globally.
MCD Stock
MCD stock rose 1.2% and was among the top movers in the Dow Jones Industrial Average in Thursday trade. Shares eased 0.2% to 291.75 Wednesday, closing even with their 50-day moving average.
McDonald's shares are trading below the 298.86 buy point for a flat base after earlier attempts to clear that entry. MCD stock is up 10.2% so far this year.
Domino's Earnings
Domino's earnings rose for the third consecutive quarter, increasing 9.2% to $3.08 per share. Revenue declined 3.8% to $1.02 billion, primarily driven by lower order volumes and a dip in the company's marketbasket pricing to stores. Analysts polled by FactSet expected the pizza delivery giant to report earnings of $3.06 per share on $1.07 billion in sales.
Domino's added a net 197 stores during the quarter with 253 openings and 56 closures. Same store sales rose 5.5% at company-owned stores in the U.S. while international same-store sales growth increased 3.6% during the quarter.
"We are executing our plan to restore delivery growth in the U.S.," CEO Russell Weiner said in the results, noting the company will benefit globally from its recently announced delivery partnership with Uber Technologies. More than two-thirds of Domino's stores worldwide will eventually take orders from the Uber Eats and Postmates apps. The rollout will go nationwide in the U.S. by the end of the year and expand to Domino's 27 international markets.
DPZ Stock
DPZ stock crept 0.3% higher Thursday. Shares are angling toward a fifth straight weekly advance, and has rallied 30% since a late-June rebound from 10-week support.
Domino's stock recovered to a 16.2% gain so far for the year.
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