Disney Posts Big Beat, Chipotle Disappoints

Two toasts of the market for the past year or so -- The Walt Disney Co. (DIS -Analyst Report) and Chipotle Mexican Grill (CMG - Analyst Report) -- posted quarterly earnings and sales after the bell Tuesday. Disney typically impressed the market with a 19 cent earnings beat at $1.27 per share, whereas Chipotle posted a 5-cent beat that sent shares tumbling in the after-market.

Disney not only posted a bottom-line positive surprise of 17.6 percent, but blew the doors off sales expectations of $13 billion by posting $13.39 billion in the company's fiscal Q1 2015. All major segments of Disney grew as well, with operating income up 7 percent for Media Networks, 20 percent for Parks and Resorts, and Studio Entertainment up more than 100 percent year over year. Aside from a Cable TV Network operating income fall of 2 percent, largely based on a new contract with the NFL, Disney looks to be continuing to fire on all cylinders.

Chipotle's numbers would likely have not resulted in an almost 7-percent drop in after-hours trading had the stock not already been priced for perfection. Chipotle's revenue numbers in the quarter were pretty much in-line, but the company, which had made it a habit to post double-digit sales growth for about as long as Chipotle has been publicly traded, posted a rather uninspiring $1.07 billion. Same-store sales growth of 16.1 percent is also nothing to sneeze at, but it's down from Q3's 19.8 percent comps and expectations for 16.5 percent in Q4.

Disney has now posted and earnings beat in its past 5 quarters, by an average of more than 10 percent per quarter. And with new developments regarding things like the first film under Disney's Star Wars franchise, investors clearly have a lot to look forward to, even at current valuations. Shares are up nearly 3 percent in the after-market and roughly 30 percent from this time last year.

Operating margins for Chipotle of 26.6 percent also look rather strong, but again are lower than the previous quarter's 28.8 percent. Higher beef, dairy and avocado prices helped food costs move up 120 basis points to 34.6 percent of revenue in the quarter. Chipotle expects to open between 190 and 205 new stores in 2015, within range of the 192 restaurant openings from full year 2014.

Chipotle's share price increases from Q2 2014 are now officially a thing of the past, at least in the near term. Thus, big moves in margin and comps may be expected to slow from here, especially considering the potential impact a suspension of pork sales in some stores may have for the March quarter.