Recent Posts
CMG: The Future Mix of Chipotlanes Relative to Chipotle’s Total Unit Count
On November 20th, Chipotle “announced today the opening of its 1,000th Chipotlane restaurant on Thursday, November 21. Located in the Kansas City metro area, the milestone restaurant will feature the company’s signature digital order drive thru pick-up lane. Of the company’s more than 3,600 restaurants in its real estate portfolio, nearly 30% feature a Chipotlane. ‘Chipotlanes are a critical piece of our long-term growth goal of reaching 7,000 restaurants in North America,’ said Chris Brandt, Chief Brand Officer. ‘This restaurant format is the fastest way for fans to get Chipotle and has proven to increase sales, margins, and returns.’”
CMG (Post-Call): A Heaping Portion of Sound Fundamentals
After today’s (Tuesday’s) market close, Chipotle Mexican Grill reported Q3 adjusted EPS of $0.27. This was above our $0.24 forecast and sell-side consensus (according to Consensus Metrix) of $0.25.
CMG (Post-Call): Q2 a Honey of a Quarter, But H2 Margin Pressure Anticipated
After today’s (Wednesday’s) market close, Chipotle Mexican Grill reported that its Q2 adjusted EPS reached $0.34. This came in two cents ahead of our $0.32 forecast as well as sell-side consensus (according to Consensus Metrix) of $0.32.
CMG: Updating Our Estimates to Reflect 50-for-1 Stock Split
Today (Wednesday, June 26, 2024) is the first day that shares of Chipotle Mexican Grill will trade following their historic, 50-for-1 stock split. For more information about Chipotle’s first-ever stock split, click on:
CMG: Adjusting Our Estimates (6/17/2024)
The fast-casual segment of the domestic restaurant industry continues to put up both: (1) the highest same-store sales growth numbers of any major segment of the industry, and (2) the highest net-unit growth rates of any major sector. However, these gains are not nearly equal across all fast-casual concepts – clearly, some are doing much better than others on both of these fronts.
CMG (Post-Call): Ignition Al Pastor
After today’s (Wednesday’s) market close, Chipotle Mexican Grill reported its Q1 adjusted EPS reached $13.37, notably above our $11.20 forecast and sell-side consensus (according to Consensus Metrix) of $11.67. The Q1 adjusted tax rate came to 22.1%, more favorable than our 25.5% forecast and consensus of 25.2%. Relative to consensus, the more favorable Q1 adjusted tax rate helped EPS by about +54 cents. This leaves +116 cents of the Q1 EPS beat attributable to other factors.
CMG: Details About Today’s Menu-Price Increases in California
Yesterday, we published a note detailing Starbucks’ menu-price increases at 20 of its stores in California. That note is available at:
CMG (Post-Call): Carne Get Better Than This?
After today’s (Tuesday’s) market close, Chipotle Mexican Grill reported Q4 2023 adjusted EPS of $10.36, ahead of our $9.49 forecast and sell-side consensus (according to Consensus Metrix) of $9.71. We attribute the earnings beat to leverage gained from better-than-expected same-store sales growth. Management indicates that at least part of the same-store sales robustness was achieved due to better throughput during key dayparts.
CMG (Post-Call): An Unflappable Q3, But Spooky Margin Challenges Loom in Q4 and 2024
After today’s (Thursday’s) market close, Chipotle Mexican Grill reported adjusted Q3 EPS of $11.36, coming in well ahead of our $10.50 forecast and sell-side consensus (according to Consensus Metrix) of $10.54.
CMG: Chipotle’s Next Nationwide New Menu Item Might be…
On its July 26th conference call, Chipotle Mexican Grill management commented that “As Chicken al Pastor wraps up in late August, we have a planned new menu item for later in the quarter.” Let us examine what we believe this new menu item will be.
CMG (Post-Call): Cost Outlook Weighs on Shares in the After-Market
After today’s (Wednesday’s) market close, Chipotle Mexican Grill reported adjusted second-quarter EPS of $12.65, surpassing our $11.85 forecast and sell-side consensus (according to Consensus Metrix) of $12.27.
CMG (Post-Call): Burritos Smothered in Cheese are a Best Queso Scenario
After today’s (Tuesday’s) market close, Chipotle Mexican Grill reported Q1 EPS of $10.50, coming in well above our $8.95 estimate, as well as sell-side consensus (according to Consensus Metrix) that had moved up to $8.95 in recent days.
CMG: Updating Our Forecasts for Chipotle Mexican Grill
We look for Chipotle Mexican Grill to release its first-quarter earnings after the market close on Tuesday, April 25th. For more information, please click on:
CMG: An Opportunity re: Stored Value Cards?
The most recent 10-K for Starbucks (SBUX; Buy, $102.50) lists, as a deferred tax asset, about $1,662.6 million for “Stored value card liability and deferred revenue.” In other words, Starbucks has sold nearly $1.7 billion worth of Starbucks Cards for which the dollar value stored on those cards has not been redeemed. This is effectively an interest-free loan from those who have not used those funds yet, to Starbucks. A nice piece of business, indeed.
CMG: Chipotle Appears to be Hiring for a New Restaurant Concept
Chipotle Mexican Grill appears to be starting up a new restaurant concept, with the first location to be a part of the Kitchen United Mix food hall located on the popular Third Street Promenade in Santa Monica, California.
CMG (Post-Call): Q4 Falls Short, But Q1 Off to a Tasty Start
After today’s (Tuesday’s) market close, Chipotle Mexican Grill reported adjusted Q4 EPS of $8.29, falling short of our $9.09 projection and sell-side consensus (according to Consensus Metrix) of $8.91. We’d note that Q4 Labor Costs/Revenues, at 25.6%, was higher than our 24.5% forecast. On today’s conference call, management noted that there was a lower-than-expected benefit from Q4’s Garlic Guajillo Steak limited-time offering. Management adds that it anticipated Q4 restaurant-level margins would be in the 25% range, as opposed to the 24.0% actual.
CMG: A $3,460+ Stock Price by Year-End 2027?
Back in September 2014, we published a note (for a former employer) entitled “CMG: A $1,300+ Stock by Decade’s End?” At the time, CMG shares traded at about $671 per share. As it turns out, despite highly challenging food-safety issues that led to five straight quarters of negative same-store sales over Q4 2015-Q4 2016, CMG stock ended 2020 at $1,480 per share – meaningfully above $1,300. What might a similar analysis today suggest about where CMG shares might end up in about five years’ time, at year-end 2027?
CMG (Post-Call): Spicy Growth in a Difficult Consumer Environment
After today’s (Tuesday’s) market close, Chipotle Mexican Grill reported adjusted Q3 EPS of $9.51, ahead of our $9.20 forecast as well as sell-side consensus (according to Consensus Metrix) of $9.19. We attribute the earnings beat primarily to a more favorable-than-forecasted adjusted tax rate (23.4% actual vs. 26.0% projected). By our calculations, if the Q3 adjusted tax rate had been 26.0% (which was also consensus heading into today), then Q3 adjusted EPS would have been $9.18.
CMG: Updating Our Projections
Chipotle Mexican Grill plans to announce its Q3 earnings after the market close on Tuesday, October 25th. For more info, click on:
CMG (Post-Call): Menu Pricing Helps to Power Q2 EPS Above Expectations
After today’s (Tuesday’s) market close, Chipotle Mexican Grill reported Q2 adjusted EPS of $9.30. This came in above our $8.90 forecast and ahead of sell-side consensus (according to Consensus Metrix) of $9.04.
CMG: An Update on Unionization Efforts at Chipotle
In late June, employees of a Chipotle Mexican Grill restaurant in Augusta, Maine became the first to officially seek to unionize. On June 22nd, the Kennebec Journal (of Maine) reported that “Workers at the Augusta Chipotle Mexican Grill are forming a union that could make it the first such unionized restaurant in the nation if the effort succeeds. A majority of workers at the restaurant located at the Marketplace at Augusta signed union cards expressing their intent to join a to-be-formed new union, Chipotle United, according to Brandi McNease, one of the crew members at the restaurant and leader of efforts to unionize her fellow workers.” For more info:
CMG: Unionization Risks Tick Up as First Chipotle Restaurant Seeks to Unionize
Employees of a Chipotle Mexican Grill restaurant in Augusta, Maine are apparently the first to officially seek to unionize. The Kennebec Journal (of Maine) reports that “Workers at the Augusta Chipotle Mexican Grill are forming a union that could make it the first such unionized restaurant in the nation if the effort succeeds. A majority of workers at the restaurant located at the Marketplace at Augusta signed union cards expressing their intent to join a to-be-formed new union, Chipotle United, according to Brandi McNease, one of the crew members at the restaurant and leader of efforts to unionize her fellow workers. A letter was signed by several employees who in a show of solidarity were on hand to deliver it together to an onsite manager Wednesday morning, a copy of which was also sent to Chipotle’s corporate offices. It states that a majority of the Augusta location’s crew ‘wish to be represented by Chipotle United for the purposes of collective bargaining.’” For more info:
CMG (Post-Call): Same-Store Sales Trends Improve; Tax Rate Helps Q1 EPS
After today’s market close, Chipotle reported adjusted Q1E EPS of $5.70. This was slightly below our $5.75 estimate, but slightly above sell-side consensus (according to Consensus Metrix) of $5.66. However, the adjusted Q1 tax rate came to 16.7%. This was meaningfully more favorable than our 25.0% forecast and consensus of 25.0%. We calculate that this difference between the actual adjusted tax rate and our 25.0% forecast helped Q1 EPS by about +59 cents.
CMG: Dear Chipotle Mexican Grill, Will You Be Our Valentine?
Shares of CMG are down by -10.7% year-to-date, modestly underperforming the S&P 500’s -7.3% decline. Since we initiated coverage of Chipotle Mexican Grill on November 15, 2021, CMG shares have declined by -15.1%, versus the S&P 500’s -5.6% decrease. This provides some context for the following fundamental items that, in our view, have improved since mid-November:
CMG (Post-Call): Chipotle Unlocks “Faster Unit Growth Mode”
After today’s (Tuesday’s) market close, Chipotle Mexican Grill reported adjusted Q4 EPS of $5.58, coming in above our $5.25 forecast and sell-side consensus (according to Consensus Metrix) of $5.25.
CMG: How Does Chipotle Trade Heading Into, and After, Earnings?
Chipotle Mexican Grill plans to release its Q4 2021 earnings after the market close on Tuesday, February 8th. How do CMG shares tend to trade heading into earnings, and the day after an earnings release?
CMG: Kalinowski Equity Research Initiates Coverage of Chipotle Mexican Grill
Amongst the positives and opportunities for Chipotle Mexican Grill (CMG) are its great-tasting food that is responsibly sourced, (2) its speedy service, (3) Chipotle’s status as the largest concept in the fastest-growing major segment (fast-casual) of the U.S. restaurant industry, (4) the company’s growing use of “Chipotlanes,” units with drive-thrus that feature a Chipotle take on that method of service, (5) Chipotle’s digital capabilities, which are amongst the very best in the restaurant industry (and which also include over 24.5 million loyalty-program users as of the end of Q3), (6) the pace of menu innovation, which is quicker than it usually has been in Chipotle’s history, (7) Chipotle’s status as a highly-desirable tenant for prime real-estate locations, (8) Chipotle’s high (and growing) degree of cultural relevancy, and (9) Chipotle’s “Real Foodprint” sustainability impact tracker, which resonates in particular with younger folks.