Chipotle misses estimates on revenue, earnings, same-store sales

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This story is breaking and is being updated.

Chipotle Mexican Grill (cmg) reported quarterly results that missed expectations on Tuesday, sending shares down more than 5% in after-hours trading.

In its fourth-quarter results, Chipotle posted same-store that missed expectations as the company navigated a “challenging and fluid macro environment,” CEO Brian Niccol said in the release.

Here’s how the California-based burrito chain compared to Wall Street’s estimates, according to Bloomberg:

  • Income: $2.2 billion vs $2.23 billion

  • Adjusted Earnings Per Share: $8.29 vs $8.91 per share

  • Same-Store Sales: 5.6% vs 7.04%

For the quarter ending December 31, 2022, total revenue grew by 11.25% to $2.2 billion. The increase was driven by same-store sales of 5.6% and the opening of new locations.

Last quarter, Chipotle opened 100 new restaurants with 90 including its drive-thru concept, a Chipotleón. In the earnings release, the company said that these formats typically provide “increased new restaurant sales, margins and returns.”

Last quarter, in-restaurant increased by 17.5%. While the company reported an operating margin of 13.6%, which fell short of the consensus estimate of 14.7%. Q4 foot traffic declined 10.2% compared to 2021, per analytics company placer.e.

For the full fiscal year, revenue rose 14.4% to $16.8 billion, while same-store rose 8.0%. Operating margin was up 13.4% from 10.7%. Restaurant-level operating margin was also up 130 basis points to 23.9%.

The cost of foodstuff, packaging and beverages weighed on the company, accounting for 29.3% of total revenue. However, it was lower by 230 basis points compared to the fourth quarter of 2021.

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The company said increased menu prices and “to a lesser extent, lower avocado prices” helped offset inflation that hit menus last quarter, including higher costs for dairy and tortillas.

In August 2022, chipotle Menu prices increased 4%. This was the third time in 15 months.

Restaurant-level operating margin was 20.2%, up 24% from this time last year, which the company said was “primarily due to the benefit of leverage and, to a lesser extent, lower delivery fees associated with lower volume of delivery transactions, partially offset by wage inflation and higher food costs.”

Digital accounted for 37.4% of food and beverage revenue in the fourth quarter and 39.4% for the full year.

Analysts are also eyeing the next quarter.

UBS’s Dennis Geiger expects “better traffic this burrito season,” which Chipotle calls its busy season (March to May). The firm has a Buy rating and price target of $1,800.

Beyond that, the burrito chain recently announced plans to hire 15,000 employees, For the full year 2022, the company plans to open 236 locations, 202 of which include a Chipotle. This is a step in the company’s long-term goal of reaching 7,000 locations in North America.

CEO Nicol re-emphasized that goal in the release.

“Our continued focus on recruiting and retaining the best people, delivering fresh daily specialties with delicious food will drive Chipotle’s operating standards to successfully expand long-term to 7,000 restaurants,” he added.


Brooke DiPalma is a reporter for Yahoo Finance. Follow him on Twitter at @BrookeDiPalma Or email him at [email protected]

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