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While the overall market has delivered an impressive return in 2024, the same can’t be said for all, particularly Starbucks (SBUX - Free Report) . Shares have faced consistent pressure amid worries surrounding China and declining same store sales.
However, shares popped following news that Chipotle Mexican Grill (CMG - Free Report) CEO Brian Niccol would be replacing Laxman Narasimhan as CEO of the company. Conversely, CMG shares fell following the news.
In addition, it's critical to note that Brian Niccol was previously served as CEO of Taco Bell, which is operated by Yum Brands ((YUM - Free Report) ).
But can the company turn around? Let’s take a closer look at how it currently stacks up.
Starbucks Steals Brian Niccol
Starbucks’ most recent quarterly release was met with modest positivity, with shares seeing an initial positive move before reversing lower in the days following. The company posted somewhat mixed top and bottom line results, meeting the Zacks Consensus EPS estimate but modestly falling short of sales expectations.
Earnings revisions have been taken modestly lower across the board over recent months.
Image Source: Zacks Investment Research
Sales fell 1% year-over-year, whereas EPS declined 7%. Global comparable store sales came in weak, falling 3% from the year-ago period alongside a 5% decline in comparable transactions. Higher prices have helped offset the slump, though, with its average ticket moving 2% higher.
The average ticket increase does raise some eyebrows, leaving some to wonder if consumers can increasingly pay higher prices after years of already doing so.
As mentioned previously, woes in China have been felt heavily by the company, with the recent quarterly print again confirming the trend – China comparable store sales fell 14% alongside a 7% decline in both average ticket and comparable transactions.
As shown below, the company’s sales recovered nicely post-pandemic but have slowed recently.
Image Source: Zacks Investment Research
Chipotle Shares Provide Stunning Returns
CMG shares have been considerably strong over the years, reflecting one of the top-performing restaurant stocks overall. Though its recent set of quarterly results brought about some profit-taking, the performance disparity has been immense over the past year, as shown below.
Image Source: Zacks Investment Research
Unlike SBUX, Chipotle has seen notable success in its established locations, seeing comparable restaurant sales growth of 11% throughout its latest period. Revenue growth, in general, was also strong, jumping nearly 20% higher to $3 billion.
Image Source: Zacks Investment Research
CMG has also enjoyed margin expansion over the years, unlocking higher profitability thanks to consistent cost efficiencies. Please note that the chart below tracks the company’s gross margin on a trailing twelve-month basis.
Image Source: Zacks Investment Research
All in all, CMG has been firing on all cylinders throughout recent periods, reflected by its bullish share movement.
Putting Everything Together
Starbucks (SBUX - Free Report) investors got much-needed relief following the announcement of a new CEO, who comes from none other than the highly successful Chipotle Mexican Grill (CMG - Free Report) .
Of course, time will tell if the CEO rotation ends up paying dividends for SBUX, but given Brian Niccol’s track record, the company certainly appears to be in good hands. Still, it's worth noting that SBUX's earnings outlook remains hazy, and investors should be instead waiting for positive earnings estimate revisions to hit the tape, signaling a bullish change in analyst sentiment.
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Starbucks Replaces CEO: Time to Buy?
While the overall market has delivered an impressive return in 2024, the same can’t be said for all, particularly Starbucks (SBUX - Free Report) . Shares have faced consistent pressure amid worries surrounding China and declining same store sales.
However, shares popped following news that Chipotle Mexican Grill (CMG - Free Report) CEO Brian Niccol would be replacing Laxman Narasimhan as CEO of the company. Conversely, CMG shares fell following the news.
In addition, it's critical to note that Brian Niccol was previously served as CEO of Taco Bell, which is operated by Yum Brands ((YUM - Free Report) ).
But can the company turn around? Let’s take a closer look at how it currently stacks up.
Starbucks Steals Brian Niccol
Starbucks’ most recent quarterly release was met with modest positivity, with shares seeing an initial positive move before reversing lower in the days following. The company posted somewhat mixed top and bottom line results, meeting the Zacks Consensus EPS estimate but modestly falling short of sales expectations.
Earnings revisions have been taken modestly lower across the board over recent months.
Image Source: Zacks Investment Research
Sales fell 1% year-over-year, whereas EPS declined 7%. Global comparable store sales came in weak, falling 3% from the year-ago period alongside a 5% decline in comparable transactions. Higher prices have helped offset the slump, though, with its average ticket moving 2% higher.
The average ticket increase does raise some eyebrows, leaving some to wonder if consumers can increasingly pay higher prices after years of already doing so.
As mentioned previously, woes in China have been felt heavily by the company, with the recent quarterly print again confirming the trend – China comparable store sales fell 14% alongside a 7% decline in both average ticket and comparable transactions.
As shown below, the company’s sales recovered nicely post-pandemic but have slowed recently.
Image Source: Zacks Investment Research
Chipotle Shares Provide Stunning Returns
CMG shares have been considerably strong over the years, reflecting one of the top-performing restaurant stocks overall. Though its recent set of quarterly results brought about some profit-taking, the performance disparity has been immense over the past year, as shown below.
Image Source: Zacks Investment Research
Unlike SBUX, Chipotle has seen notable success in its established locations, seeing comparable restaurant sales growth of 11% throughout its latest period. Revenue growth, in general, was also strong, jumping nearly 20% higher to $3 billion.
Image Source: Zacks Investment Research
CMG has also enjoyed margin expansion over the years, unlocking higher profitability thanks to consistent cost efficiencies. Please note that the chart below tracks the company’s gross margin on a trailing twelve-month basis.
Image Source: Zacks Investment Research
All in all, CMG has been firing on all cylinders throughout recent periods, reflected by its bullish share movement.
Putting Everything Together
Starbucks (SBUX - Free Report) investors got much-needed relief following the announcement of a new CEO, who comes from none other than the highly successful Chipotle Mexican Grill (CMG - Free Report) .
Of course, time will tell if the CEO rotation ends up paying dividends for SBUX, but given Brian Niccol’s track record, the company certainly appears to be in good hands. Still, it's worth noting that SBUX's earnings outlook remains hazy, and investors should be instead waiting for positive earnings estimate revisions to hit the tape, signaling a bullish change in analyst sentiment.