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Chipotle Could Benefit By Having 99% Of Stores Here

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Chipotle Could Benefit By Having 99% Of Stores Here
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Chipotle Mexican Grill, Inc. (NYSE: CMG) is scheduled to report after the closing bell on Tuesday and all indications point to another huge quarter. 

Chipotle has defied conventional wisdom and turned the quick service restaurant industry on its head. Instead of catering to the drive-through crowd with an expansive list of standardized options, Chipotle and other fast-casual leaders have redefined lunch time with short customizable menus engineered for streamlined production.

This quarter, Chipotle has a unique opportunity to blow the competition out of the water.

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Assembly line style burrito production at Chipotle has allowed the company to outperform expectations consistently. In the last two quarters specifically Chipotle has topped expectations from Wall Street and Estimize thoroughly, fueling a 22 percent stock return over the last 6 months.

Chipotle's rising store count and increasing productivity have resulted in 4 consecutive quarters of rising year over year revenue growth. 

In the third quarter, Chipotle increased its total sales 31 percent from FQ3 2013. Contributing analysts on Estimize are looking for $1.087 billion in revenue this period which would be a 29 percent gain compared to last year. On the bottom line the Estimize community is looking for EPS of $3.86, just north of Wall Street's projection for $3.79 per share.

If there's one soft area in Chipotle's fundamental growth story, it's entering international markets. As it's played out that's creating a huge short term advantage for the burrito shop. 

At the end of last quarter only 17 of Chipotle's 1724 locations were located outside the US. Since Chipotle has a much higher percentage of its stores located domestically its insulated against foreign exchange risk. Chipotle's multinational competitors including McDonald's are hurting due to the high cost of repatriating foreign revenue to US dollars.

Given Chipotle's track record of success and its protection against currency headwinds, the company has an opportunity to shine this quarter.

Image credit: Punctuated, Flickr

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

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