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Chipotle (CMG) to Report Q2 Earnings: What's in the Offing?
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Chipotle Mexican Grill, Inc. (CMG - Free Report) is scheduled to report second-quarter 2023 results on Jul 26. In the last reported quarter, the company delivered an earnings surprise of 18.1%.
How Are Estimates Placed?
The Zacks Consensus Estimate for second-quarter earnings is pegged at $12.21, indicating growth of 31.3% from $9.30 registered in the year-ago quarter.
For revenues, the consensus mark is pegged at nearly $2,522 million, suggesting an increase of 14% 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 second-quarter top line is expected to increase year over year, courtesy of its digital efforts, Chipotlane add-ons and new restaurant openings. This and the introduction of new menu items, a rise in delivery menu prices and lower marketing investments are likely to have driven comps improvement in the to-be-reported quarter.
Our model estimates comparable restaurant sales to increase 6.3% year over year. We expect food and beverage revenues to increase 13.5% year over year to $2,488.5 million. However, delivery service revenues are expected to be $20.3 million, down 1.1% year over year. Restaurant-level margin is estimated at 26.9% compared with 25.2% reported in the prior-year quarter.
Elevated costs concerning avocados and wage pressures are likely to have hurt margins in the second quarter. CMG anticipates cost of sales to remain in the low 29% range in the second quarter, while labor costs are expected to remain in the mid-24% range. Other operating costs are expected to be in the low-14% range.
Our model predicts, food, beverage and packaging costs to be $731.4 million, up 8.5% year over year. Per the model, labor costs are expected to increase 12.4% year over year to $618.1 million.
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 +1.01%. 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.
BJ's Restaurants, Inc. (BJRI - Free Report) has an Earnings ESP of +1.91% and a Zacks Rank #1.
Shares of BJ's Restaurants have gained 51.7% in the past year. BJRI’s earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 93%.
Yum China Holdings, Inc. (YUMC - Free Report) has an Earnings ESP of +7.69% and a Zacks Rank #3.
Shares of Yum China have increased 23.9% in the past year. YUMC’s earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 301.6%.
Domino's Pizza, Inc. (DPZ - Free Report) has an Earnings ESP of +0.08% and a Zacks Rank #3.
Shares of Domino's have declined 4.3% in the past year. DPZ’s earnings beat estimates in two of the trailing four quarters and missed twice, the average surprise being 3.9%.
Image: Bigstock
Chipotle (CMG) to Report Q2 Earnings: What's in the Offing?
Chipotle Mexican Grill, Inc. (CMG - Free Report) is scheduled to report second-quarter 2023 results on Jul 26. In the last reported quarter, the company delivered an earnings surprise of 18.1%.
How Are Estimates Placed?
The Zacks Consensus Estimate for second-quarter earnings is pegged at $12.21, indicating growth of 31.3% from $9.30 registered in the year-ago quarter.
For revenues, the consensus mark is pegged at nearly $2,522 million, suggesting an increase of 14% 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 second-quarter top line is expected to increase year over year, courtesy of its digital efforts, Chipotlane add-ons and new restaurant openings. This and the introduction of new menu items, a rise in delivery menu prices and lower marketing investments are likely to have driven comps improvement in the to-be-reported quarter.
Our model estimates comparable restaurant sales to increase 6.3% year over year. We expect food and beverage revenues to increase 13.5% year over year to $2,488.5 million. However, delivery service revenues are expected to be $20.3 million, down 1.1% year over year. Restaurant-level margin is estimated at 26.9% compared with 25.2% reported in the prior-year quarter.
Elevated costs concerning avocados and wage pressures are likely to have hurt margins in the second quarter. CMG anticipates cost of sales to remain in the low 29% range in the second quarter, while labor costs are expected to remain in the mid-24% range. Other operating costs are expected to be in the low-14% range.
Our model predicts, food, beverage and packaging costs to be $731.4 million, up 8.5% year over year. Per the model, labor costs are expected to increase 12.4% year over year to $618.1 million.
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 +1.01%. 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.
BJ's Restaurants, Inc. (BJRI - Free Report) has an Earnings ESP of +1.91% and a Zacks Rank #1.
Shares of BJ's Restaurants have gained 51.7% in the past year. BJRI’s earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 93%.
Yum China Holdings, Inc. (YUMC - Free Report) has an Earnings ESP of +7.69% and a Zacks Rank #3.
Shares of Yum China have increased 23.9% in the past year. YUMC’s earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 301.6%.
Domino's Pizza, Inc. (DPZ - Free Report) has an Earnings ESP of +0.08% and a Zacks Rank #3.
Shares of Domino's have declined 4.3% in the past year. DPZ’s earnings beat estimates in two of the trailing four quarters and missed twice, the average surprise being 3.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.