Chipotle Mexican Grill (CMG, Financial) furnished its quarterly earnings data on Tuesday. It has reportedly $3.84 earnings per share (EPS) for the quarter, ruling out the consensus estimate of $3.77 by $0.07. However, the company’s revenue was comparable to the consensus estimate of $1.07 billion and reported a very same amount of revenue. In the previous year, during the same quarter, the company posted $2.53 earnings per share. On a year-over-year basis, the company’s revenue for the quarter was above 26.8%.
Basic highlights of the quarterly report:
- The company traded above 1.98% on Tuesday which hits $726.63 amount.
- The stock had a trading volume of 1,257,815 shares.
- Chipotle Mexican Grill has a 52-week low of $472.41 and a 52-week high of $727.97.
- The stock has a 50-day moving average of $691.0 and a 200-day moving average of $667.5.
- The price-to-earnings ratio remains 55.53.
- Chipotle has a market cap of $22.534 billion.
Issues that triggered its earnings this quarter
In expense of the poor performance of McDonald’s (MCD, Financial), the restaurant chain’s profit has gained a new pedestal. McDonald’s has been facing a cut-throat competition for quite some time from this chain of restaurants. Say it to be weak financial performance or high-end competition, McDonald’s has succumbed to its maladies and Chipotle became the flavour of the season. After divesting itself of noncore holdings in Boston Market and Donatos Pizza, McDonald’s owned a minority stake in Chipotle from 1998 to 2006.
The sales “fast casual,” a format selling food prepared from high-quality ingredients in an assembly-line procedure to match the customer’s expectations , has been clamped up by Chipotle together with chains like Boston Market and La Madeleine, restaurants that magnet particular customers between the ages of 18 and 34, who inspire the customization, simplicity and intense savor in the eatables.
There are reasons why Chipotle has been rewarded with maximum growth this year. One of them is the increased beef burritos prices from 4%-6%, passing on the higher cost of the meat to the customers who happily accepted. That seems to have pushed the profit envelop. There were also 200 new stores launched last year and this year, as they claim, the pace will continue which is likely to help the overall revenue growth soar.
The company’s outlook for future quarters
Chipotle is expecting maximum growth in the profit next quarter as it is considering a price hike in some of its products although within the affordable budget still. The price hike will be carried on considerably on the steaks and Barbacoa product. The move is planned in line with the price hike in the second quarter which escalated their sales.
Chipotle expects the growth ratio of the low to mid-single digit comparable restaurants to hit a high. The company has been longing to spread the restaurant chain which seems to materialise in the coming quarter as there will be 190 to 205 new restaurants joining the bandwagon. The company currently operates in more than 1,780 locations.
What analysts have to say about Chipotle’s latest earnings?
In the year ahead, the company projects a slowing growth as the stock is having its worst day in two years after closing at a record high of $726.63 Tuesday. Chipotle has been held in high regard by the analysts for last two consecutive years which right on presented the full-year same-restaurant sales view Tuesday, holding high hopes for expansion in the low-to mid-single digits, which was followed by the chain posting comparable restaurant sales of 16.8% in 2014.
Traders still have positive outlook towards the company’s growth story whose shares raised 79% and 28% in 2013 and 2014, respectively with the momentum traders piling in. The revenues pulled a ditch on the expectations as the fourth-quarter earnings leave past the consensus. Momentum traders too held back from investing in view of the company’s slowing growth outlook. However, the market watchers are still buoyant about the stock.
There are also possibilities that companies dish out disappointing results under high hopes by the analysts. Analysts expect that the company will have its day in the sun through 2016 even though the near-term estimates disappointed a bit due to higher food costs.
