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Chipotle (CMG) to Report Q1 Earnings: What's in the Offing?

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Chipotle Mexican Grill, Inc. (CMG - Free Report) is scheduled to report first-quarter 2022 results on Apr 26. In the last reported quarter, the company delivered an earnings surprise of 7.7%.

How Are Estimates Placed?

The Zacks Consensus Estimate for first-quarter earnings is pegged at $5.65, indicating growth of 5.4% from $5.36 registered in the year-ago quarter.

For revenues, the consensus mark is pegged at nearly $2,008 million, suggesting an increase of 15.3% from the prior-year quarter’s figure.

Chipotle Mexican Grill, Inc. Price and EPS Surprise

 

Chipotle Mexican Grill, Inc. Price and EPS Surprise

Chipotle Mexican Grill, Inc. price-eps-surprise | Chipotle Mexican Grill, Inc. Quote

 

Let’s discuss the factors that are likely to get reflected in the quarter to be reported.

Factors at Play

Chipotle's first-quarter performance is likely to have benefited from the introduction of new menu items, solid marketing activities that include a combination of brand-building efforts and transaction-driven promotions and advertisements. During the previous quarter’s earnings call, the company displayed major success related to its limited-time offering of plant-based Chorizo. Backed by the emphasis on vegetarian protein servings supported by its health and environmental benefits, the momentum is likely to have continued in the first quarter.

Increased focus on Chipotlane add-ons, alternative store formats and increased technological investments (to amplify innovation, enhance the customer experience, optimize efficiencies and improve operational execution) are likely to have driven the company’s performance in the to-be-reported quarter.

Chipotle's first-quarter top line is likely to reflect an improvement in comps on the back of healthy demand for Carne Asada, a rise in delivery menu prices and normalizing elevated marketing spend. The company expects first-quarter comps to be mid to high single-digit range.  

However, wage inflation and costs associated with beef, avocado and freight are likely to have hurt margins in the first quarter. For the quarter, the company anticipates labor costs to be in the low 26% range, while food costs are expected in the range of 30-30.5%.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Chipotle this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. But that's not the case here.

Earnings ESP: Chipotle has an Earnings ESP of -1.20%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Poised to Beat Earnings Estimates

Here are some other stocks from the Zacks Retail-Wholesale space that investors may consider as our model shows that these also have the right combination of elements to post an earnings beat:

Shake Shack Inc. (SHAK - Free Report) has an Earnings ESP of +6.85% and a Zacks Rank #3.

Shares of Shake Shack have declined 9.2% so far this year. SHAK’s earnings beat the consensus mark in each of the trailing four quarters. The company has a trailing four-quarter earnings surprise of 89.2%, on average.

Cracker Barrel Old Country Store, Inc. (CBRL - Free Report) has an Earnings ESP of +11.33% and a Zacks Rank #3.

Shares of Cracker Barrel have declined 28.5% in the past year. CBRL’s earnings topped the consensus mark twice but missed the same on two occasions. The company has a trailing four-quarter earnings surprise of 350.5%, on average.

Groupon, Inc. (GRPN - Free Report) has an Earnings ESP of +23.91% and a Zacks Rank #3.

Shares of Groupon have declined 56.2% in the past year. GRPN earnings beat the consensus mark in each of the trailing four quarters. The company has a trailing four-quarter earnings surprise of 396.7%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.