Unpacking Q4 Earnings: Chipotle (NYSE:CMG) In The Context Of Other Modern Fast Food Stocks

Earnings results often indicate what direction a company will take in the months ahead. With Q4 now behind us, let’s have a look at Chipotle (NYSE:CMG) and its peers.

Modern fast food is a relatively newer category representing a middle ground between traditional fast food and sit-down restaurants. These establishments feature an expanded menu selection priced above traditional fast food options, often incorporating fresher and cleaner ingredients to serve customers prioritizing quality. These eateries are capitalizing on the perception that your drive-through burger and fries joint is detrimental to your health because of inferior ingredients.

The 6 modern fast food stocks we track reported a strong Q4; on average, revenues beat analyst consensus estimates by 1.6%, while next quarter's revenue guidance was 2.8% above consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, but modern fast food stocks have shown resilience, with share prices up 5.3% on average since the previous earnings results.

Chipotle (NYSE:CMG)

Born from a desire to offer quick meals with fresh, flavorful ingredients, Chipotle (NYSE:CMG) is a fast-food chain known for its healthy, Mexican-inspired cuisine and customizable dishes.

Chipotle reported revenues of $2.52 billion, up 15.4% year on year, topping analyst expectations by 1.1%. It was a very strong quarter for the company, with revenue, same-store sales, and EPS exceeding estimates. The company's outperformance was driven by strong year-on-year unit growth of 7.4%.

"2023 was an outstanding year where we delivered strong transaction growth driven by throughput and menu innovation, opened a record number of new restaurants, surpassed $3 million in AUVs and formed our first international partnership," said Brian Niccol, Chairman and CEO, Chipotle.

The stock is up 15% since the results and currently trades at $2,867.99.

Read why we think that Chipotle is one of the best modern fast food stocks, our full report is free.

Best Q4: Shake Shack (NYSE:SHAK)

Started as a hot dog cart in New York City's Madison Square Park, Shake Shack (NYSE:SHAK) is a fast-food restaurant known for its burgers and milkshakes.

Shake Shack reported revenues of $286.2 million, up 20% year on year, outperforming analyst expectations by 2.2%. It was a stunning quarter for the company: Shake Shak beat across the board on all key metrics from same-store sales to revenue to profits to EPS. FCF even came in higher than expected and was positive rather than the loss projected by Wall Street analysts.

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The stock is up 21.5% since the results and currently trades at $94.74.

Is now the time to buy Shake Shack? Access our full analysis of the earnings results here, it's free.

Weakest Q4: Noodles (NASDAQ:NDLS)

Offering pasta, mac and cheese, pad thai, and more, Noodles & Company (NASDAQ:NDLS) is a casual restaurant chain that serves all manner of noodles from around the world.

Noodles reported revenues of $124.3 million, down 8.9% year on year, falling short of analyst expectations by 0.8%. It was a weak quarter for the company, with revenue and EPS falling below expectations thanks to worse-than-expected same-store sales performance (4.2% system-wide declines compared to estimates of 3.9%).

Noodles had the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. The stock is down 50.3% since the results and currently trades at $1.22.

Read our full analysis of Noodles's results here.

Potbelly (NASDAQ:PBPB)

With a unique origin story where the company actually started as an antique shop, Potbelly (NASDAQ:PBPB) today is a chain known for its toasty sandwiches.

Potbelly reported revenues of $125.7 million, up 4.7% year on year, in line with analyst expectations. It was a mixed quarter for the company, with an impressive beat of analysts' gross margin estimates but a miss of analysts' earnings estimates.

The stock is down 22.6% since the results and currently trades at $10.44.

Read our full, actionable report on Potbelly here, it's free.

Sweetgreen (NYSE:SG)

Founded in 2007 by three Georgetown University alum, Sweetgreen (NYSE:SG) is a casual quick service chain known for its healthy salads and bowls.

Sweetgreen reported revenues of $153 million, up 29.1% year on year, in line with analyst expectations. It was a strong quarter for the company, with an impressive beat of analysts' gross margin estimates. Next quarter's revenue and adjusted EBITDA guidance came in higher than Wall Street's estimates. Finally, while full year revenue guidance was in line, adjusted EBITDA was better than Wall Street estimates.

Sweetgreen scored the fastest revenue growth and highest full-year guidance raise among its peers. The stock is up 61.8% since the results and currently trades at $20.65.

Read our full, actionable report on Sweetgreen here, it's free.

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