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Chipotle's (CMG) Q4 Earnings And Revenues Miss Estimates
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Chipotle Mexican Grill, Inc. (CMG - Free Report) reported fourth-quarter 2022 results, with earnings and revenues missing the Zacks Consensus Estimate. However, the top and the bottom line increased on a year-over-year basis.
Q4 Earnings & Revenue Discussion
In the quarter under review, Chipotle reported adjusted earnings per share (EPS) of $8.29, missing the Zacks Consensus Estimate of $8.88. The bottom line improved 48.6% from the $5.58 reported in the year-ago quarter.
Chipotle Mexican Grill, Inc. Price, Consensus and EPS Surprise
Quarterly revenues of $2,180.6 million missed the consensus mark of $2,229 million. The top line increased 11.2% on a year-over-year basis. The upside can primarily be attributed to robust comparable restaurant sales and new restaurant openings. In the quarter under review, Chipotle opened 100 new restaurants.
Digital sales contributed 37.4% of total food and beverage revenues. During the third quarter, comparable restaurant sales increased 5.6% year over year, following growth of 7.6% (in third-quarter 2022), 10.1% (in second-quarter 2022), 9% (in first-quarter 2022) and 15.2% (in fourth-quarter 2021).
Costs, Operating Highlights & Net Income
During fourth-quarter 2022, food, beverage and packaging costs, as a percentage of revenues, came in at 29.3%, down 230 basis points (bps) year over year. In the fourth quarter, the benefit of menu price increases was overshadowed by inflation across the menu, mainly due to higher costs for dairy and tortillas.
During the reported quarter, the restaurant-level operating margin came in at 24%, up from 20.2% reported in the year-ago quarter. The uptick was primarily backed by sales leverage benefits and lower delivery fees. However, this was partially offset by wage inflation and higher food costs.
Adjusted net income in the reported quarter amounted to $231.4 million compared with $159.1 reported million in the prior-year quarter.
Balance Sheet
As of Dec 31, 2022, the company reported cash and cash equivalent of $384 million compared with $815.4 million as of Dec 31, 2021.
Inventory totaled $35.7 million as of Dec 31, 2022, compared with $32.8 million as of Dec 31, 2021. Goodwill (as a percentage of total assets) came in at 0.3% at the end of the fourth quarter of 2022.
During the fourth quarter, the company repurchased $198.9 million worth of stock at an average price of $1,486.7. Management approved an additional $200 million (exclusive of commissions) to repurchase shares. As of Dec 31, the company had approximately $413.9 million available for the buyback program.
2022 Highlights
Total revenues in 2022 amounted to $8,634.7 million compared with $7,547.1 million in 2021.
Adjusted Net Income in 2022 totaled $919.8 million compared with $724.8 million in 2021.
In 2022, diluted EPS came in at $32.78 per share compared with $25.42 reported in the previous year.
2023 Outlook
For first-quarter 2023, the company expects comps growth in the high single digits.
The company expects to open 255 to 285 new restaurants in 2023. It expects a 2023 tax rate in the range of 25-27%.
Arcos Dorados sports a Zacks Rank #1. ARCO has a long-term earnings growth of 11.6%. Shares of the company have increased 19.6% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests growth of 8.1% and 4.2%, respectively, from the year-ago period’s levels.
Brinker carries a Zacks Rank #2 (Buy). EAT has a long-term earnings growth rate of 7.1%. The stock has declined 3.3% in the past year.
The Zacks Consensus Estimate for Brinker’s 2024 sales and EPS suggests growth of 4.1% and 37.6%, respectively, from the year-ago period’s reported levels.
Darden carries a Zacks Rank #2. DRI has a long-term earnings growth rate of 9.8%. Shares of DRI have gained 1.2% in the past year.
The Zacks Consensus Estimate for Darden’s 2023 sales and EPS suggests growth of 7.9% and 5.4%, respectively, from the year-ago period’s reported levels.
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Chipotle's (CMG) Q4 Earnings And Revenues Miss Estimates
Chipotle Mexican Grill, Inc. (CMG - Free Report) reported fourth-quarter 2022 results, with earnings and revenues missing the Zacks Consensus Estimate. However, the top and the bottom line increased on a year-over-year basis.
Q4 Earnings & Revenue Discussion
In the quarter under review, Chipotle reported adjusted earnings per share (EPS) of $8.29, missing the Zacks Consensus Estimate of $8.88. The bottom line improved 48.6% from the $5.58 reported in the year-ago quarter.
Chipotle Mexican Grill, Inc. Price, Consensus and EPS Surprise
Chipotle Mexican Grill, Inc. price-consensus-eps-surprise-chart | Chipotle Mexican Grill, Inc. Quote
Quarterly revenues of $2,180.6 million missed the consensus mark of $2,229 million. The top line increased 11.2% on a year-over-year basis. The upside can primarily be attributed to robust comparable restaurant sales and new restaurant openings. In the quarter under review, Chipotle opened 100 new restaurants.
Digital sales contributed 37.4% of total food and beverage revenues. During the third quarter, comparable restaurant sales increased 5.6% year over year, following growth of 7.6% (in third-quarter 2022), 10.1% (in second-quarter 2022), 9% (in first-quarter 2022) and 15.2% (in fourth-quarter 2021).
Costs, Operating Highlights & Net Income
During fourth-quarter 2022, food, beverage and packaging costs, as a percentage of revenues, came in at 29.3%, down 230 basis points (bps) year over year. In the fourth quarter, the benefit of menu price increases was overshadowed by inflation across the menu, mainly due to higher costs for dairy and tortillas.
During the reported quarter, the restaurant-level operating margin came in at 24%, up from 20.2% reported in the year-ago quarter. The uptick was primarily backed by sales leverage benefits and lower delivery fees. However, this was partially offset by wage inflation and higher food costs.
Adjusted net income in the reported quarter amounted to $231.4 million compared with $159.1 reported million in the prior-year quarter.
Balance Sheet
As of Dec 31, 2022, the company reported cash and cash equivalent of $384 million compared with $815.4 million as of Dec 31, 2021.
Inventory totaled $35.7 million as of Dec 31, 2022, compared with $32.8 million as of Dec 31, 2021. Goodwill (as a percentage of total assets) came in at 0.3% at the end of the fourth quarter of 2022.
During the fourth quarter, the company repurchased $198.9 million worth of stock at an average price of $1,486.7. Management approved an additional $200 million (exclusive of commissions) to repurchase shares. As of Dec 31, the company had approximately $413.9 million available for the buyback program.
2022 Highlights
Total revenues in 2022 amounted to $8,634.7 million compared with $7,547.1 million in 2021.
Adjusted Net Income in 2022 totaled $919.8 million compared with $724.8 million in 2021.
In 2022, diluted EPS came in at $32.78 per share compared with $25.42 reported in the previous year.
2023 Outlook
For first-quarter 2023, the company expects comps growth in the high single digits.
The company expects to open 255 to 285 new restaurants in 2023. It expects a 2023 tax rate in the range of 25-27%.
Zacks Rank & Key Picks
Chipotle currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Retail-Wholesale sector are Arcos Dorados Holdings Inc. (ARCO - Free Report) , Brinker International, Inc. (EAT - Free Report) and Darden Restaurants, Inc. (DRI - Free Report) .
Arcos Dorados sports a Zacks Rank #1. ARCO has a long-term earnings growth of 11.6%. Shares of the company have increased 19.6% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests growth of 8.1% and 4.2%, respectively, from the year-ago period’s levels.
Brinker carries a Zacks Rank #2 (Buy). EAT has a long-term earnings growth rate of 7.1%. The stock has declined 3.3% in the past year.
The Zacks Consensus Estimate for Brinker’s 2024 sales and EPS suggests growth of 4.1% and 37.6%, respectively, from the year-ago period’s reported levels.
Darden carries a Zacks Rank #2. DRI has a long-term earnings growth rate of 9.8%. Shares of DRI have gained 1.2% in the past year.
The Zacks Consensus Estimate for Darden’s 2023 sales and EPS suggests growth of 7.9% and 5.4%, respectively, from the year-ago period’s reported levels.