Chipotle's Pricing Power

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Chipotle's Pricing Power Helps With Earnings

Shares of Chipotle (NYSE: CMG) jumped 6.62% in after-hours trading on Tuesday after the fast-casual restaurant chain posted positive earnings.

Financials: Chipotle reported earnings of $5.58 per share and revenue of $2 billion; both were better than expected.

Overcoming: Despite inflation resulting in increased costs for food, beverage, and packaging (as well as wage inflation), Chipotle’s pricing power prevailed. The company passed on these costs to consumers and hit profitability.

Going Digital: It was Chipotle’s digital sales that propelled company revenue. Digital sales grew 3.8% in the quarter and accounted for 41.6% of sales. For the full year, digital sales grew 24.7% and accounted for 45.6% of sales.

Final Thoughts: Chipotle expects to open 235 to 250 new restaurants in 2022, depending on the state of the pandemic.

Notables

Notable Earnings Today: Walt Disney (NYSE: DIS), CVS Health (NYSE: CVS), Uber Technologies (NYSE: UBER), Canopy Growth (Nasdaq: CGC), Teva Pharmaceutical Industries (NYSE: TEVA), Twilio (NYSE: TWLO), Yum! Brands (NYSE: YUM), Annaly Capital Management (NYSE: NLY), Madison Square Garden Entertainment (NYSE: MSGE), Zynga (Nasdaq: ZNGA), Lithia Motors (NYSE: LAD), Mattel (Nasdaq: MAT), Cameco (NYSE: CCJ), Sonos (Nasdaq: SONO), Performance Food (NYSE: PFGC), MGM Resorts International (NYSE: MGM), Honda Motor (NYSE: HMC), iRobot (Nasdaq: IRBT), Perion (Nasdaq: PERI), Lumen (NYSE: LUMN), American Financial Group (NYSE: AFG), Ares Capital (Nasdaq: ARCC), Bunge (NYSE: BG), Chefs' Warehouse (Nasdaq: CHEF), CME Group (Nasdaq: CME), CoreCivic (NYSE: CXW), Equifax (NYSE: EFX), Forward Air (Nasdaq: FWRD), Fox (Nasdaq: FOX), GlaxoSmithKline (NYSE: GSK), Golub Capital (Nasdaq: GBDC), II-VI (Nasdaq: IIVI), Mesa Air Group (Nasdaq: MESA), Molina Healthcare (NYSE: MOH), Motorola Solutions (NYSE: MSI), NGL Energy Partners (NYSE: NGL), O'Reilly Automotive (Nasdaq: ORLY), Penske Automotive Group (NYSE: PAG), Pilgrim's Pride (Nasdaq: PPC), Radware (Nasdaq: RDWR), Seagen (Nasdaq: SGEN), Sonos (Nasdaq: SONO), Toyota Motor (NYSE: TM), Trimble (TRMB).

Notable IPOs Today: Evergreen Corporation Unit (Nasdaq: EVGRU), Counter Press Acquisition Corporation Unit (Nasdaq: CPAQU), byNordic Acquisition Corporation Units (Nasdaq: BYNOU), TC BioPharm (Holdings) plc (Nasdaq: TCBP), The tru Shrimp Companies, Inc. Common Stock (Nasdaq: BTRU).

Notable Equity Crowdfunding Campaigns Ending Today: K-9 Power Products (StartEngine), AquirPor (StartEngine), Hexanika (StartEngine), Genie Lens (NetCapital), IZO Spirits (StartEngine), Arowana Media Holdings (NetCapital), ONE ROQ Spirits (StartEngine), Transportation 4 Life (StartEngine).

Notable Economic Events Today: Wholesale Inventories (10:00 a.m. ET), Crude Oil Inventories (10:30 a.m. ET).

Lyft’s Active Riders Total Falls Short

Shares of Lyft (Nasdaq: LYFT) fell 5.46% during after-hours trading on Tuesday after the ride-sharing company posted mixed earnings.

Financials: Lyft reported earnings of 9 cents per share and revenue of $970 million; both were better than expected.

Ridership: Active riders in the quarter hit 18.73 million, which was below expectations.

Final Thoughts: Shares of Lyft are down 23% in the past year. In fact, the stock is down 47% since its initial public offering in 2019.

Economic Trends Influencing the Fed

With an interest rate hike next month, what economic trends will the Federal Reserve look at?

Consumer Prices: How much are people spending on goods and services? Keep an eye on the consumer price index report, which will be released on Thursday.

Unemployment: A surprisingly positive unemployment report last week showed that payrolls increased by 467,000 last month. This is a good sign for the economy.

Final Thoughts: Productivity will be another key economic indicator that the Fed will look at.

Trends to Watch

I’m Lovin’ It: Relentless Wall Street Billionaire Has a Secret Cause (The Wall Street Journal)

Tap to Pay: Apple announces a way to buy stuff by tapping iPhones together (CNBC)

Now is the Time: Why the SEC should approve a spot bitcoin ETF (Yahoo! Finance)

Later This Year: Return-to-office will boost demand for personal care products in the spring and summer, Edgewell CEO says (CNBC)

Better: Betterment Adds Crypto Capability Through Makara Acquisition (Crowdfund Insider)

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