Chipotle (NYSE: CMG) delivered an earnings beat on Wednesday, smashing expectations as online sales overtook in-person orders for the first time.
The fast-casual chain posted adjusted earnings per share of $5.26, versus estimates for earnings of $4.89 per share, on revenue of $1.74 billion. Digital sales rose 134% in the quarter, while same-store sales grew 17.2%.
One thing that drove the surge in online sales was Chipotle’s new quesadilla, which CEO Brian Niccol said was ordered by 1-in-10 customers, helping the company see its highest number of new customers in March.
“We made sure we took the proper time to develop an excellent product that customers love,” Niccol said of the new quesadilla, adding that the digital-only item is creating a new eating occasion, like a mid-afternoon snack.
Looking ahead, Chipotle said it predicts second quarter comparable sales to be in the high-20% to 30% range.
Despite all that good news, the stock is down 4% for the week, which could be an opportunity for investors.
Miller Tabak chief market strategist Matt Maley argues that strength of Chipotle’s earnings could carry it to new highs.
“We’re looking at this $1,550 level,” Maley said. “That was the old high back in February.”
As of this writing, the stock is just 4.5% below the $1,550 level Maley is watching for.
“If it can break above that kind of double-top high in any kind of meaningful fashion,” Maley said, “it’s going to be incredibly bullish for the stock on a technical basis, so, you’ll definitely want to continue to buy the stock.”