Chipotle Mexican Grill Inc (NYSE:CMG) Q3 2020 Earnings Conference Call - Final Transcript
Oct 21, 2020 • 04:30 pm ET
being open for to-go services.
Since sales troughed in late March, we've been able to retain 80% to 85% of our digital sales gains while recovering 50% to 55% of our in-store sales. The stickiness of digital is a key factor in allowing us to deliver strong results, and we'll continue to invest in making the digital experience as easy and frictionless as possible as illustrated by the recent launch of our group ordering feature on the Chipotle app. For the quarter, we reported sales of $1.6 billion, representing 14% year-over-year growth, which was fueled by 8.3% comparable restaurant sales growth. Restaurant level margins of 19.5%, which is a 130 basis points lower than last year and earnings per share adjusted for unusual items of $3.76, representing a decline of 1.6% year over year. Comparable restaurant sales were strong in each month of Q3, with August being the high point.
Sales trends remained strong in September, even though beginning mid-month we rolled over the successful 2019 Carne Asada program. Beginning mid-September, comparable restaurant sales impressively delivered mid-single digits and this trend has continued in October. The two-year compounded comp stack is a healthy 20.2%, which is similar to the 20.4% pre-COVID level we delivered in Q4 2019 and highlights that our digital system along with running great restaurants with the right leaders and the right culture can deliver outstanding performance despite external challenges. As you can see from the Q3 results, our key strategies continue to resonate with guests and position us to win today while we create the future. In fact, they give us confidence in ultimately having more than 6,000 restaurants and expanding AUVs above $2.5 million with margins at or above 25%.
Let me provide a brief update on each of these strategies which are: number one, making the brand visible, relevant and loved; number two, utilizing a disciplined approach to creativity and innovation; number three, leveraging digital capabilities to drive productivity and expand access, convenience and engagement; number four, engaging with customers through our loyalty program; and number five, running successful restaurants with a strong culture that provide great Food with Integrity while delivering exceptional in-restaurant and digital experiences. Beginning with marketing where the goal remains to increase awareness, expand access and grow sales by driving culture, driving a difference and ultimately driving a purchase. Our team has shown a heightened sense of urgency since the beginning of COVID.
They quickly adapted to the evolving environment and experimented with creative social and digital media initiatives designed to help enhance Chipotle's brand and purpose. Most recently demonstrated by our round up for change feature that has raised over $2.1 million for organizations supporting underserved communities. We also connected and engaged with guests through our Behind the Foil TV campaign, highlighting real ingredients, real cooking techniques and real employees. Innovation is a core component of Chipotle, and our stage-gate process is a key tool in which we test, listen and learn from customers and operations before moving to