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Chipotle (CMG) to Report Q3 Earnings: What's in the Offing?
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Chipotle Mexican Grill, Inc. (CMG - Free Report) is scheduled to report third-quarter 2022 results on Oct 25. In the last reported quarter, the company delivered an earnings surprise of 3%.
How Are Estimates Placed?
The Zacks Consensus Estimate for third-quarter earnings is pegged at $9.09, indicating growth of 29.5% from $7.02 registered in the year-ago quarter.
For revenues, the consensus mark is pegged at nearly $2,233 million, suggesting an increase of 14.4% from the prior-year quarter’s figure.
Chipotle Mexican Grill, Inc. Price and EPS Surprise
Let’s discuss the factors that are likely to get reflected in the quarter to be reported.
Factors at Play
Chipotle's third-quarter performance is likely to have benefitted from its digital efforts, Chipotlane add-ons and new restaurant openings. During the previous quarter, the company initiated new customer-facing pin pads that offer faster and contact-free payment options. It emphasized on exploring an automated real-time kitchen production system that ensures high-quality food to support customer needs. It made progress with respect to updating its POS hardware and DML enhancements to boost guest experience and accuracy. With increased focus on in-flight programs, the initiatives are likely to have aided the company’s performance in the to-be-reported quarter.
Chipotle's third-quarter top line is likely to reflect an improvement in comps on the back of new menu innovations, a rise in delivery menu prices and lower marketing investments. The company expects third-quarter comps in the mid- to high single-digit.
This and solid contributions from the food and beverage and delivery revenues are likely to have aided the company’s top line in the third quarter. The Zacks Consensus Estimate for food and beverage revenues is pegged at $2.2 billion, indicating a growth of 15% from $1.9 billion reported in the prior-year quarter. On the other hand, the consensus estimate for delivery revenues stands at $21.9 million compared with $19.9 billion reported in the prior-year quarter.
Elevated costs across dairy, tortillas, beef and packaging and wage pressures are likely to have hurt margins in the third quarter. In the third quarter, the company expects the cost of sales to be about 30% (of sales). Other operating costs are expected to be in the mid-14% range.
What Our Model Says
Our proven model predicts an earnings beat for Chipotle this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Chipotle has an Earnings ESP of +2.11%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other stocks from the Zacks Retail-Wholesale sector that investors may consider, as our model shows that these also have the right combination of elements to post an earnings beat this quarter:
Texas Roadhouse, Inc. (TXRH - Free Report) currently has an Earnings ESP of +2.30% and a Zacks Rank #3.
Shares of Texas Roadhouse have increased 8.7% in the past year. TXRH’s earnings surpassed the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 7.7%.
Foot Locker, Inc. (FL - Free Report) has an Earnings ESP of +16.94% and a Zacks Rank #3.
Shares of Foot Locker have declined 32.5% in the past year. FL’s earnings beat the consensus mark in each of the last four quarters. The company has a trailing four-quarter earnings surprise of 28.6% on average.
Costco Wholesale Corporation (COST - Free Report) currently has an Earnings ESP of +0.53% and a Zacks Rank #3.
Shares of Costco have increased 0.8% in the past year. COST’s earnings beat the consensus mark in each of the last four quarters. The company has a trailing four-quarter earnings surprise of 7.7% on average.
Image: Bigstock
Chipotle (CMG) to Report Q3 Earnings: What's in the Offing?
Chipotle Mexican Grill, Inc. (CMG - Free Report) is scheduled to report third-quarter 2022 results on Oct 25. In the last reported quarter, the company delivered an earnings surprise of 3%.
How Are Estimates Placed?
The Zacks Consensus Estimate for third-quarter earnings is pegged at $9.09, indicating growth of 29.5% from $7.02 registered in the year-ago quarter.
For revenues, the consensus mark is pegged at nearly $2,233 million, suggesting an increase of 14.4% from the prior-year quarter’s figure.
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 third-quarter performance is likely to have benefitted from its digital efforts, Chipotlane add-ons and new restaurant openings. During the previous quarter, the company initiated new customer-facing pin pads that offer faster and contact-free payment options. It emphasized on exploring an automated real-time kitchen production system that ensures high-quality food to support customer needs. It made progress with respect to updating its POS hardware and DML enhancements to boost guest experience and accuracy. With increased focus on in-flight programs, the initiatives are likely to have aided the company’s performance in the to-be-reported quarter.
Chipotle's third-quarter top line is likely to reflect an improvement in comps on the back of new menu innovations, a rise in delivery menu prices and lower marketing investments. The company expects third-quarter comps in the mid- to high single-digit.
This and solid contributions from the food and beverage and delivery revenues are likely to have aided the company’s top line in the third quarter. The Zacks Consensus Estimate for food and beverage revenues is pegged at $2.2 billion, indicating a growth of 15% from $1.9 billion reported in the prior-year quarter. On the other hand, the consensus estimate for delivery revenues stands at $21.9 million compared with $19.9 billion reported in the prior-year quarter.
Elevated costs across dairy, tortillas, beef and packaging and wage pressures are likely to have hurt margins in the third quarter. In the third quarter, the company expects the cost of sales to be about 30% (of sales). Other operating costs are expected to be in the mid-14% range.
What Our Model Says
Our proven model predicts an earnings beat for Chipotle this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Chipotle has an Earnings ESP of +2.11%. 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 #2. 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 sector that investors may consider, as our model shows that these also have the right combination of elements to post an earnings beat this quarter:
Texas Roadhouse, Inc. (TXRH - Free Report) currently has an Earnings ESP of +2.30% and a Zacks Rank #3.
Shares of Texas Roadhouse have increased 8.7% in the past year. TXRH’s earnings surpassed the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 7.7%.
Foot Locker, Inc. (FL - Free Report) has an Earnings ESP of +16.94% and a Zacks Rank #3.
Shares of Foot Locker have declined 32.5% in the past year. FL’s earnings beat the consensus mark in each of the last four quarters. The company has a trailing four-quarter earnings surprise of 28.6% on average.
Costco Wholesale Corporation (COST - Free Report) currently has an Earnings ESP of +0.53% and a Zacks Rank #3.
Shares of Costco have increased 0.8% in the past year. COST’s earnings beat the consensus mark in each of the last four quarters. The company has a trailing four-quarter earnings surprise of 7.7% on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.