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Chipotle (CMG) Q2 Earnings & Revenues Beat Estimates, Stock Up
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Chipotle Mexican Grill, Inc. (CMG - Free Report) released second-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. Following the earnings release, the company’s shares rose 4.3% during the after-hours trading session on Jul 24.
During the second quarter, the company benefited from successful promotions regarding Chicken Al Pastor driving significant engagement and sales. Also, the emphasis on throughput and staff training proved effective in meeting heightened demand and supported transaction growth in the quarter.
Chipotle completed a 50-to-1 stock split on Jun 26, one of the largest in New York Stock Exchange history. This split aims to make shares more accessible to employees and a wider range of investors, allowing them to purchase shares at more affordable prices.
The company's financial position remains strong, ending the quarter with $2.5 billion in cash, restricted cash and investments and no debt. During the second quarter, CMG repurchased $151.4 million worth of stock at an average price of $63.52. As of Jun 30, the company had approximately $647.7 million available under the buyback program.
Q2 Earnings & Revenue Discussion
Chipotle Mexican Grill, Inc. Price, Consensus and EPS Surprise
In the quarter under review, CMG reported adjusted earnings per share (EPS) of 34 cents, outpacing the Zacks Consensus Estimate of 31 cents. The bottom line increased 36% from 25 cents reported in the year-ago quarter.
Quarterly revenues of $2.97 billion surpassed the consensus mark of $2.94 billion by 1.3%. The top line rose 18.2% on a year-over-year basis. The upside was driven by strong comparable restaurant sales growth backed by increased transactions (8.7%) and average checks (2.4%).
Comparable restaurant sales during the second quarter rose 11.1% year over year compared with 7% growth reported in the previous quarter. Our estimate was pegged at 8.6%. Digital sales contributed 35.3% to total food and beverage revenues.
Strength in new restaurant openings aided the company’s performance in the second quarter. In the reported quarter, Chipotle opened 52 new restaurants with 46 locations, including a Chipotlane. It also opened an international licensed restaurant. The company reported solid performances of the new restaurant, thereby uplifting sales, margins and returns.
Costs, Operating Highlights & Net Income
During the second quarter of 2024, food, beverage and packaging costs, as a percentage of revenues, came in at 29.4%, flat year over year. During the quarter, the company stated that benefits from menu price increases (implemented last year) were partly negated by rising avocado costs, increased oil usage and high demand for beef (resulting from the Braised Beef Barbacoa marketing initiative). We suggested the metric to be 29.5%.
During the quarter under discussion, the restaurant-level operating margin reached 28.9%, up from 27.5% reported in the prior-year period. The benefit of sales leverage drove the uptick. However, this was partially mitigated by wage and ingredient inflation. We predicted the metric to be 28.1%.
Adjusted net income in the reported quarter amounted to $462.9 million, up 31.9% year over year. Our estimate for the metric was $426.9 million.
Balance Sheet
As of Jun 30, 2024, the company reported cash and cash equivalents of $806.5 million compared with $560.6 million as of Dec 31, 2023.
As of Jun 30, 2024, inventory totaled $35.6 million compared with $39.3 million as of Dec 31, 2023. Goodwill (as a percentage of total assets) reached 0.2% at the end of the second quarter of 2024.
Outlook
For 2024, management expects comps growth in the mid to high-single-digit range.
CMG anticipates to open 285-315 new restaurants in 2024. It suggests a 2024 tax rate in the range of 25-27%.
Zacks Rank & Key Picks
Chipotle currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for LOCO’s 2025 sales and EPS suggests growth of 3.8% and 9.9%, respectively, from the year-ago period’s levels.
Brinker International, Inc. (EAT - Free Report) sports a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 213.4%, on average. EAT’s shares have surged 66.1% in the past year.
The Zacks Consensus Estimate for EAT’s 2024 sales and EPS indicates 5.4% and 46.6% growth, respectively, from year-earlier actuals.
Texas Roadhouse, Inc. (TXRH - Free Report) carries a Zacks Rank #2 (Buy). TXRH has a long-term earnings growth rate of 17.2%. Shares of TXRH have gained 47.2% in the past year.
The Zacks Consensus Estimate for TXRH’s 2024 sales and EPS indicates a rise of 15.3% and 33.7%, respectively, from the year-ago period’s levels.
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Chipotle (CMG) Q2 Earnings & Revenues Beat Estimates, Stock Up
Chipotle Mexican Grill, Inc. (CMG - Free Report) released second-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. Following the earnings release, the company’s shares rose 4.3% during the after-hours trading session on Jul 24.
During the second quarter, the company benefited from successful promotions regarding Chicken Al Pastor driving significant engagement and sales. Also, the emphasis on throughput and staff training proved effective in meeting heightened demand and supported transaction growth in the quarter.
Chipotle completed a 50-to-1 stock split on Jun 26, one of the largest in New York Stock Exchange history. This split aims to make shares more accessible to employees and a wider range of investors, allowing them to purchase shares at more affordable prices.
The company's financial position remains strong, ending the quarter with $2.5 billion in cash, restricted cash and investments and no debt. During the second quarter, CMG repurchased $151.4 million worth of stock at an average price of $63.52. As of Jun 30, the company had approximately $647.7 million available under the buyback program.
Q2 Earnings & Revenue Discussion
Chipotle Mexican Grill, Inc. Price, Consensus and EPS Surprise
Chipotle Mexican Grill, Inc. price-consensus-eps-surprise-chart | Chipotle Mexican Grill, Inc. Quote
In the quarter under review, CMG reported adjusted earnings per share (EPS) of 34 cents, outpacing the Zacks Consensus Estimate of 31 cents. The bottom line increased 36% from 25 cents reported in the year-ago quarter.
Quarterly revenues of $2.97 billion surpassed the consensus mark of $2.94 billion by 1.3%. The top line rose 18.2% on a year-over-year basis. The upside was driven by strong comparable restaurant sales growth backed by increased transactions (8.7%) and average checks (2.4%).
Comparable restaurant sales during the second quarter rose 11.1% year over year compared with 7% growth reported in the previous quarter. Our estimate was pegged at 8.6%. Digital sales contributed 35.3% to total food and beverage revenues.
Strength in new restaurant openings aided the company’s performance in the second quarter. In the reported quarter, Chipotle opened 52 new restaurants with 46 locations, including a Chipotlane. It also opened an international licensed restaurant. The company reported solid performances of the new restaurant, thereby uplifting sales, margins and returns.
Costs, Operating Highlights & Net Income
During the second quarter of 2024, food, beverage and packaging costs, as a percentage of revenues, came in at 29.4%, flat year over year. During the quarter, the company stated that benefits from menu price increases (implemented last year) were partly negated by rising avocado costs, increased oil usage and high demand for beef (resulting from the Braised Beef Barbacoa marketing initiative). We suggested the metric to be 29.5%.
During the quarter under discussion, the restaurant-level operating margin reached 28.9%, up from 27.5% reported in the prior-year period. The benefit of sales leverage drove the uptick. However, this was partially mitigated by wage and ingredient inflation. We predicted the metric to be 28.1%.
Adjusted net income in the reported quarter amounted to $462.9 million, up 31.9% year over year. Our estimate for the metric was $426.9 million.
Balance Sheet
As of Jun 30, 2024, the company reported cash and cash equivalents of $806.5 million compared with $560.6 million as of Dec 31, 2023.
As of Jun 30, 2024, inventory totaled $35.6 million compared with $39.3 million as of Dec 31, 2023. Goodwill (as a percentage of total assets) reached 0.2% at the end of the second quarter of 2024.
Outlook
For 2024, management expects comps growth in the mid to high-single-digit range.
CMG anticipates to open 285-315 new restaurants in 2024. It suggests a 2024 tax rate in the range of 25-27%.
Zacks Rank & Key Picks
Chipotle currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail – Restaurants industry include:
El Pollo Loco Holdings, Inc. (LOCO - Free Report) sports a Zacks Rank #1 (Strong Buy). LOCO has a trailing four-quarter earnings surprise of 19.4%, on average. The stock has moved up 11% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LOCO’s 2025 sales and EPS suggests growth of 3.8% and 9.9%, respectively, from the year-ago period’s levels.
Brinker International, Inc. (EAT - Free Report) sports a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 213.4%, on average. EAT’s shares have surged 66.1% in the past year.
The Zacks Consensus Estimate for EAT’s 2024 sales and EPS indicates 5.4% and 46.6% growth, respectively, from year-earlier actuals.
Texas Roadhouse, Inc. (TXRH - Free Report) carries a Zacks Rank #2 (Buy). TXRH has a long-term earnings growth rate of 17.2%. Shares of TXRH have gained 47.2% in the past year.
The Zacks Consensus Estimate for TXRH’s 2024 sales and EPS indicates a rise of 15.3% and 33.7%, respectively, from the year-ago period’s levels.