Strong 1Q results fuel Chipotle stock surge

NEW YORK (AP) -- Shares of Chipotle Mexican Grill Inc., are rising Friday, a day after the burrito maker reported first-quarter results that beat Wall Street expectations.

THE SPARK: Denver-based Chipotle reported that it earned $76.6 million, or $2.45 per share in the first quarter ended March 31. That's up from $62.7 million, or $1.97 per share, a year ago. Total revenue rose 13 percent to $726.8 million, primarily as the result of new locations. The figures were announced after regular trading.

The company said it expects flat to low-single-digit sales growth at established locations. That's not counting any potential hikes it makes to menu prices. The company declined to say when it might raise prices but said it likely wouldn't be around the middle of the year, as it had previously suggested.

THE BIG PICTURE: Chipotle Mexican Grill was once a market darling as customers flocked to its fast-casual format for tacos, bowls and burritos, More recently, it has faced intensifying competition and extending its streak of outsized results has proven more difficult.

THE ANALYSIS: Nick Setyan, an analyst at Wedbush, wrote in a report that he believes that "current expectations are poised for upward revisions" because of increased marketing investments, added sales from a nationwide catering rollout by the end of August and the possibility of a price increase beyond the expected 3 percent. He noted that he's not concerned about the slight delay in price increases given that prices are easing for some commodities.

THE SHARES: Chipotle's shares rose 8 percent, or $26.42, to $354.78 in morning trading Friday. The stock has been trading anywhere from $233.82 to $433.30 in the past 52 weeks.