Chipotle Q4 Earnings Top Estimates, Revenues Lag, Stock Slips 5%

Chipotle Mexican Grill, Inc. CMG posted fourth-quarter 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Following the results, shares of the company declined 5% in the after-hours trading session yesterday. Negative investor sentiments were witnessed as CMG announced tepid annual comparable sales growth for 2025.The company remains cautious of higher costs of raw materials (including avocados) and potential tariffs on Mexican imports. If the recently announced tariffs go into full effect, they could impose an ongoing impact of about 60 basis points on the company's cost of sales, potentially adding further margin pressures.CMG’s Q4 Earnings & Revenue DiscussionIn the quarter under review, CMG reported adjusted earnings per share (EPS) of 25 cents, outpacing the Zacks Consensus Estimate of 24 cents. The bottom line increased 19% from 21 cents reported in the year-ago quarter.Chipotle Mexican Grill, Inc. Price, Consensus and EPS Surprise Chipotle Mexican Grill, Inc. price-consensus-eps-surprise-chart | Chipotle Mexican Grill, Inc. QuoteQuarterly revenues of $2.8 billion missed the consensus mark by 0.2%. However, the top line rose 13.1% on a year-over-year basis. This upside was driven by new restaurant openings and strong comparable restaurant sales growth.Comparable restaurant sales in the fourth quarter rose 5.4% compared with 6% growth in the previous quarter. Our estimate was pegged at 6.5%. During the quarter, comps were backed by higher transactions of 4% as well as a 1.4% rise in average checks.During the fourth quarter, digital sales contributed 34.4% to total food and beverage revenues.Chipotle’s Restaurant OpeningsStrength in new restaurant openings aided the company’s performance in the fourth quarter. In the reported quarter, Chipotle opened 119 new restaurants in 95 locations, including a Chipotlane. It also opened an internationally licensed restaurant.CMG’s Costs, Operating Highlights & Net IncomeIn the fourth quarter of 2024, food, beverage and packaging costs, as a percentage of revenues, came in at 30.4% compared with 29.7% reported in the prior-year quarter. The rise in costs was driven by inflationary costs across avocados and dairy and increased ingredient usage (aimed at delivering consistent, generous portions). Additionally, a shift in protein mix, spurred by the popularity of the Smoked Brisket limited-time offering, contributed to the cost uptick. This was partly offset by the positive impact of menu price hikes. We expected the metric to be 30.9%.In the quarter under discussion, the restaurant-level operating margin reached 24.8%, down from 25.4% reported in the prior-year period. We predicted the metric to be 24.6%.Adjusted net income in the reported quarter amounted to $340 million, up 18.8% year over year. Our estimate for the metric was $322.8 million.Balance Sheet of ChipotleAs of Dec. 31, 2024, the company reported cash and cash equivalents of $748.5 million compared with $560.6 million as of Dec. 31, 2023.As of Dec. 31, 2024, inventory totaled $48.9 million compared with $39.3 million as of Dec. 31, 2023. Goodwill (as a percentage of total assets) reached 0.23% at the end of the fourth quarter of 2024.CMG 2024 HighlightsTotal revenues in 2024 amounted to $11.3 billion compared with $9.87 billion in 2023.Adjusted net income in 2024 came in at $1.54 billion compared with $1.24 billion reported in 2023.In 2024, adjusted diluted EPS came in at $1.12 compared with 90 cents reported in the previous year.CMG’s 2025 OutlookFor 2025, management continues to expect comps growth in the low to mid-single-digit range. The management expects to open between 315 and 345 new company-operated restaurants in 2025, with more than 80% featuring a Chipotlane. It expects a tax rate in the range of 25-27% in 2025.CMG’s Zacks Rank & Other Key PicksChipotle currently has a Zacks Rank #2 (Buy).Some other better-ranked stocks in the Zacks Retail – Restaurants industry are:Brinker International, Inc. EAT presently sports a Zacks Rank #1 (Strong Buy). EAT has a trailing four-quarter earnings surprise of 24.7%, on average. The stock has surged 322% in the past year. You can see the complete list of today’s Zacks Rank #1 stocks here.The consensus estimate for EAT’s fiscal 2025 sales and EPS indicates growth of 17.2% and 92.9%, respectively, from the year-ago period’s levels.Kura Sushi USA, Inc. KRUS currently sports a Zacks Rank of 1. KRUS has a trailing four-quarter negative earnings surprise of 70.8%, on average. The stock has declined 18.9% in the past year.The Zacks Consensus Estimate for KRUS’ 2025 sales and EPS indicates a rise of 18.3% and 237.5%, respectively, from the year-ago period’s levels.Potbelly Corporation PBPB currently carries a Zacks Rank #2. PBPB has a trailing four-quarter earnings surprise of 67.5%, on average. The stock has gained 4.5% in the past year.The consensus estimate for PBPB’s 2025 sales and EPS indicates growth of 4.3% and 12.5%, respectively, from the year-ago period’s levels.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Chipotle Mexican Grill, Inc. (CMG): Free Stock Analysis Report Brinker International, Inc. (EAT): Free Stock Analysis Report Potbelly Corporation (PBPB): Free Stock Analysis Report Kura Sushi USA, Inc. (KRUS): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks