Chipotle Earnings: What To Look For From CMG

Mexican fast-food chain Chipotle (NYSE:CMG) will be announcing earnings results tomorrow afternoon. Here's what you need to know.

Last quarter Chipotle reported revenues of $2.52 billion, up 15.4% year on year, beating analyst revenue expectations by 1.1%. It was a very strong quarter for the company, with an impressive beat of analysts' gross margin estimates and a decent beat of analysts' revenue estimates.

Is Chipotle buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Chipotle's revenue to grow 12.7% year on year to $2.67 billion, slowing down from the 17.2% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $11.65 per share.

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company missed Wall St's revenue estimates five times over the last two years.

Looking at Chipotle's peers in the restaurants segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. Darden delivered top-line growth of 6.8% year on year, missing analyst estimates by 1.7% and Kura Sushi reported revenues up 30.4% year on year, exceeding estimates by 1.1%. Darden traded down 5.5% on the results, and Kura Sushi was up 5.7%.

Read our full analysis of Darden's results here and Kura Sushi's results here.

Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, and while some of the restaurants stocks have fared somewhat better, they have not been spared, with share price declining 3.6% over the last month. Chipotle is down 0.6% during the same time, and is heading into the earnings with with analyst price target of $2,947.4, compared to share price of $2,887.

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