Chipotle (CMG) reported strong Q2 2024 results, exceeding Wall Street's expectations across all major metrics, including revenue, earnings, and same-store sales. Key highlights from the report include:
Revenue: $2.97 billion, up 18.2% year-over-year, versus the expected $2.94 billion.
Adjusted EPS: $0.34, surpassing the estimate of $0.32.
Same-Store Sales Growth: 11.1% year-over-year, compared to the anticipated 9.23%.
CEO Brian Niccol credited the success to effective brand marketing and the return of the popular Chicken al Pastor. The company plans to reintroduce smoked brisket in the fall to attract new customers.
Foot traffic increased by 8%, exceeding the expected 6.3%, with growth observed across all income cohorts. Despite a challenging environment for the restaurant industry, Chipotle maintained its pricing strategy, opting not to engage in promotional pricing.
UBS analyst Dennis Geiger highlighted Chipotle as well-positioned to sustain sales momentum due to strong customer brand affinity and value proposition. However, Wedbush analyst Nick Setyan noted potential threats from value meals offered by competitors like McDonald's.
Concerns about portion sizes were addressed, with CEO Niccol emphasizing that 90% of stores were providing "correct and generous" portions, while the remaining 10% were re-coached to meet standards.
Chipotle's menu prices were up 3% year-over-year, with no further price increases planned for 2024. The company is closely monitoring inflation and consumer behavior but remains confident in its resilience during economic uncertainties.
Stock Performance:
Post-Earnings Reaction: Shares jumped roughly 14% in after-hours trading following the earnings announcement.
Stock Split: Chipotle conducted its first 50-for-1 stock split in June, but shares have since fallen nearly 18% in the last month.
Outlook:
2024 Sales Growth: Expected to be in the mid- to high-single digits, up from the previous guidance of mid-single-digit growth.
New Locations: Chipotle ended Q2 with 3,530 stores, slightly less than the anticipated 3,540. It opened 52 new restaurants in Q2, with 46 featuring the drive-through Chipotlane.
The company plans to open 285 to 315 new locations this year, with over 80% having the drive-through concept. Long-term, Chipotle aims to operate 7,000 restaurants in North America.
Future Strategies:
Potential new initiatives include adding late night or breakfast hours, revamping the loyalty program, and targeting Gen Z consumers.
Revenue: $2.97 billion, up 18.2% year-over-year, versus the expected $2.94 billion.
Adjusted EPS: $0.34, surpassing the estimate of $0.32.
Same-Store Sales Growth: 11.1% year-over-year, compared to the anticipated 9.23%.
CEO Brian Niccol credited the success to effective brand marketing and the return of the popular Chicken al Pastor. The company plans to reintroduce smoked brisket in the fall to attract new customers.
Foot traffic increased by 8%, exceeding the expected 6.3%, with growth observed across all income cohorts. Despite a challenging environment for the restaurant industry, Chipotle maintained its pricing strategy, opting not to engage in promotional pricing.
UBS analyst Dennis Geiger highlighted Chipotle as well-positioned to sustain sales momentum due to strong customer brand affinity and value proposition. However, Wedbush analyst Nick Setyan noted potential threats from value meals offered by competitors like McDonald's.
Concerns about portion sizes were addressed, with CEO Niccol emphasizing that 90% of stores were providing "correct and generous" portions, while the remaining 10% were re-coached to meet standards.
Chipotle's menu prices were up 3% year-over-year, with no further price increases planned for 2024. The company is closely monitoring inflation and consumer behavior but remains confident in its resilience during economic uncertainties.
Stock Performance:
Post-Earnings Reaction: Shares jumped roughly 14% in after-hours trading following the earnings announcement.
Stock Split: Chipotle conducted its first 50-for-1 stock split in June, but shares have since fallen nearly 18% in the last month.
Outlook:
2024 Sales Growth: Expected to be in the mid- to high-single digits, up from the previous guidance of mid-single-digit growth.
New Locations: Chipotle ended Q2 with 3,530 stores, slightly less than the anticipated 3,540. It opened 52 new restaurants in Q2, with 46 featuring the drive-through Chipotlane.
The company plans to open 285 to 315 new locations this year, with over 80% having the drive-through concept. Long-term, Chipotle aims to operate 7,000 restaurants in North America.
Future Strategies:
Potential new initiatives include adding late night or breakfast hours, revamping the loyalty program, and targeting Gen Z consumers.