We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Chipotle (CMG) Up 0.9% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
It has been about a month since the last earnings report for Chipotle Mexican Grill (CMG - Free Report) . Shares have added about 0.9% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Chipotle due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Chipotle Q4 Earnings & Revenue Beat
Chipotle released fourth-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis. Earnings surpassed the consensus estimate for the fourth consecutive quarter.
Q4 Earnings & Revenue Discussion
In the quarter under review, Chipotle reported adjusted earnings per share (EPS) of $10.36, outpacing the Zacks Consensus Estimate of $9.73. The bottom line improved 25% from $8.29 in the year-ago quarter.
Quarterly revenues of $2,516.3 million surpassed the consensus mark of $2,492 million. The top line jumped 15.4% on a year-over-year basis on the back of strong comparable restaurant sales growth and new restaurant openings. In the reported quarter, Chipotle opened 121 new restaurants with 110 locations including a Chipotlane.
Digital sales contributed 36.1% to total food and beverage revenues.
Comparable restaurant sales grew 7.9% year over year compared with 5% in the previous quarter. Our estimate was pegged at 6.3%.
Costs, Operating Highlights & Net Income
During fourth-quarter 2023, food, beverage and packaging costs, as a percentage of revenues, came in at 29.7%, up 40 basis points year over year. Increased cost across the board, most notably beef produce as well as queso, was marginally overshadowed by menu price increases and lower paper costs. We suggested the metric to be 30%.
During the quarter under discussion, the restaurant-level operating margin reached 25.4%, up from 24% a year ago. The uptick was primarily driven by sales leverage. We predicted the metric to be 23.9%.
Adjusted net income in the reported quarter amounted to $286.2 million, up 23.7% year over year.
Balance Sheet
As of Dec 31, 2023, the company reported cash and cash equivalents of $560.3 million compared with $384 million as of Dec 31, 2022.
As of Dec 31, 2023, inventory totaled $39.3 million compared with $35.7 million as of Dec 31, 2022. Goodwill (as a percentage of total assets) reached 0.3% at the end of the fourth quarter of 2023.
During the fourth quarter, CMG repurchased $144.3 million worth of stock at an average price of $1,938.8.
Outlook
For 2024, management expects comps growth in the mid-single-digit range.
CMG anticipates to open 285-315 new restaurants in 2024. It suggests 2024 tax rate in the range of 25-27%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Chipotle has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Chipotle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Chipotle is part of the Zacks Retail - Restaurants industry. Over the past month, McDonald's (MCD - Free Report) , a stock from the same industry, has gained 2%. The company reported its results for the quarter ended December 2023 more than a month ago.
McDonald's reported revenues of $6.41 billion in the last reported quarter, representing a year-over-year change of +8.1%. EPS of $2.95 for the same period compares with $2.59 a year ago.
For the current quarter, McDonald's is expected to post earnings of $2.72 per share, indicating a change of +3.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.6% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for McDonald's. Also, the stock has a VGM Score of F.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Chipotle (CMG) Up 0.9% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Chipotle Mexican Grill (CMG - Free Report) . Shares have added about 0.9% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Chipotle due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Chipotle Q4 Earnings & Revenue Beat
Chipotle released fourth-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis. Earnings surpassed the consensus estimate for the fourth consecutive quarter.
Q4 Earnings & Revenue Discussion
In the quarter under review, Chipotle reported adjusted earnings per share (EPS) of $10.36, outpacing the Zacks Consensus Estimate of $9.73. The bottom line improved 25% from $8.29 in the year-ago quarter.
Quarterly revenues of $2,516.3 million surpassed the consensus mark of $2,492 million. The top line jumped 15.4% on a year-over-year basis on the back of strong comparable restaurant sales growth and new restaurant openings. In the reported quarter, Chipotle opened 121 new restaurants with 110 locations including a Chipotlane.
Digital sales contributed 36.1% to total food and beverage revenues.
Comparable restaurant sales grew 7.9% year over year compared with 5% in the previous quarter. Our estimate was pegged at 6.3%.
Costs, Operating Highlights & Net Income
During fourth-quarter 2023, food, beverage and packaging costs, as a percentage of revenues, came in at 29.7%, up 40 basis points year over year. Increased cost across the board, most notably beef produce as well as queso, was marginally overshadowed by menu price increases and lower paper costs. We suggested the metric to be 30%.
During the quarter under discussion, the restaurant-level operating margin reached 25.4%, up from 24% a year ago. The uptick was primarily driven by sales leverage. We predicted the metric to be 23.9%.
Adjusted net income in the reported quarter amounted to $286.2 million, up 23.7% year over year.
Balance Sheet
As of Dec 31, 2023, the company reported cash and cash equivalents of $560.3 million compared with $384 million as of Dec 31, 2022.
As of Dec 31, 2023, inventory totaled $39.3 million compared with $35.7 million as of Dec 31, 2022. Goodwill (as a percentage of total assets) reached 0.3% at the end of the fourth quarter of 2023.
During the fourth quarter, CMG repurchased $144.3 million worth of stock at an average price of $1,938.8.
Outlook
For 2024, management expects comps growth in the mid-single-digit range.
CMG anticipates to open 285-315 new restaurants in 2024. It suggests 2024 tax rate in the range of 25-27%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Chipotle has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Chipotle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Chipotle is part of the Zacks Retail - Restaurants industry. Over the past month, McDonald's (MCD - Free Report) , a stock from the same industry, has gained 2%. The company reported its results for the quarter ended December 2023 more than a month ago.
McDonald's reported revenues of $6.41 billion in the last reported quarter, representing a year-over-year change of +8.1%. EPS of $2.95 for the same period compares with $2.59 a year ago.
For the current quarter, McDonald's is expected to post earnings of $2.72 per share, indicating a change of +3.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.6% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for McDonald's. Also, the stock has a VGM Score of F.