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Chipotle (CMG) to Report Q4 Earnings: What's in the Offing?
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Chipotle Mexican Grill, Inc. (CMG - Free Report) is scheduled to report fourth-quarter 2023 results on Feb 6. In the last reported quarter, the company delivered an earnings surprise of 8.6%.
How Are Estimates Placed?
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $9.71, indicating growth of 17.1% from $8.29 registered in the year-ago quarter.
For revenues, the consensus mark is pegged at nearly $2.5 billion, suggesting an increase of 14.2% from the prior-year quarter’s figure.
Chipotle Mexican Grill, Inc. Price and EPS Surprise
Let’s discuss the factors that are likely to be reflected in the quarter to be reported.
Factors at Play
Chipotle's fourth-quarter performance is likely to have benefited from strategic menu pricing, Chipotlane add-ons and marketing initiatives. This and strength in digital sales, value proposition and new restaurant openings are likely to have aided the company’s performance in the to-be-reported quarter.
Our model predicts fourth-quarter food and beverage revenues to increase 13.9% year over year to $2.5 billion. Delivery service revenues are expected to be $17.6 million, suggesting an increase of 5.6% year over year.
Strong comps growth backed by transaction growth and pricing efforts are likely to have aided the company’s top line in the fourth quarter. The company anticipates fourth-quarter comps to be in the high-single-digit range. Our model predicts fourth-quarter comps growth to be at 6.3% year over year.
Elevated costs concerning cheese and avocados and wage pressures are likely to have hurt margins in the fourth quarter. CMG anticipates the cost of sales to be around the 30% range in the fourth quarter, while labor costs are expected at the 25% range. Other operating costs are expected to be in the low-15% range.
Our model predicts food, beverage and packaging costs to be $745.7 million, up 16.7% year over year. Per the model, labor costs are expected to increase 13.5% year over year to $634.2 million. Our model predicts a restaurant-level margin of 23.9%.
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 +1.30%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other stocks worth considering from the Zacks Retail-Wholesale sector that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat.
Jack in the Box Inc. (JACK - Free Report) has an Earnings ESP of +1.40% and a Zacks Rank #3.
The company's shares have increased 18.9% in the past three months. JACK’s earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 10.1%.
The Cheesecake Factory Incorporated (CAKE - Free Report) has an Earnings ESP of +0.22% and a Zacks Rank #3.
Shares of CAKE have gained 13.8% in the past three months. CAKE’s earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 1.2%.
Papa John's International, Inc. (PZZA - Free Report) has an Earnings ESP of +0.04% and a Zacks Rank of 3.
Shares of PZZA have gained 11.4% in the past three months. It reported better-than-expected earnings in three of the trailing four quarters and missed on the remaining one occasion, the average surprise being 1.7%.
Image: Bigstock
Chipotle (CMG) to Report Q4 Earnings: What's in the Offing?
Chipotle Mexican Grill, Inc. (CMG - Free Report) is scheduled to report fourth-quarter 2023 results on Feb 6. In the last reported quarter, the company delivered an earnings surprise of 8.6%.
How Are Estimates Placed?
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $9.71, indicating growth of 17.1% from $8.29 registered in the year-ago quarter.
For revenues, the consensus mark is pegged at nearly $2.5 billion, suggesting an increase of 14.2% 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 be reflected in the quarter to be reported.
Factors at Play
Chipotle's fourth-quarter performance is likely to have benefited from strategic menu pricing, Chipotlane add-ons and marketing initiatives. This and strength in digital sales, value proposition and new restaurant openings are likely to have aided the company’s performance in the to-be-reported quarter.
Our model predicts fourth-quarter food and beverage revenues to increase 13.9% year over year to $2.5 billion. Delivery service revenues are expected to be $17.6 million, suggesting an increase of 5.6% year over year.
Strong comps growth backed by transaction growth and pricing efforts are likely to have aided the company’s top line in the fourth quarter. The company anticipates fourth-quarter comps to be in the high-single-digit range. Our model predicts fourth-quarter comps growth to be at 6.3% year over year.
Elevated costs concerning cheese and avocados and wage pressures are likely to have hurt margins in the fourth quarter. CMG anticipates the cost of sales to be around the 30% range in the fourth quarter, while labor costs are expected at the 25% range. Other operating costs are expected to be in the low-15% range.
Our model predicts food, beverage and packaging costs to be $745.7 million, up 16.7% year over year. Per the model, labor costs are expected to increase 13.5% year over year to $634.2 million. Our model predicts a restaurant-level margin of 23.9%.
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 +1.30%. 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.
Other Stocks Poised to Beat on Earnings
Here are some other stocks worth considering from the Zacks Retail-Wholesale sector that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat.
Jack in the Box Inc. (JACK - Free Report) has an Earnings ESP of +1.40% and a Zacks Rank #3.
The company's shares have increased 18.9% in the past three months. JACK’s earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 10.1%.
The Cheesecake Factory Incorporated (CAKE - Free Report) has an Earnings ESP of +0.22% and a Zacks Rank #3.
Shares of CAKE have gained 13.8% in the past three months. CAKE’s earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 1.2%.
Papa John's International, Inc. (PZZA - Free Report) has an Earnings ESP of +0.04% and a Zacks Rank of 3.
Shares of PZZA have gained 11.4% in the past three months. It reported better-than-expected earnings in three of the trailing four quarters and missed on the remaining one occasion, the average surprise being 1.7%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.