On February 6, 2024, a Chipotle restaurant in Manhattan, New York City, was the backdrop for the company’s latest earnings report. Chipotle Mexican Grill announced that it continues to see an increase in customer traffic, which helped it exceed analysts’ expectations for quarterly earnings. However, the burrito chain’s same-store sales forecast for 2025 fell short of investor hopes, leading to a decline of over 4% in its shares during after-hours trading.
Here’s a comparison of Chipotle’s reported results against Wall Street expectations, as compiled by LSEG:
–Earnings per share: Adjusted earnings of 25 cents versus an expectation of 24 cents.
– Revenue: Totaled $2.85 billion, matching forecasts.
The company experienced a 13.1% increase in net sales, reaching $2.85 billion, with same-store sales growing by 5.4%, just shy of the anticipated 5.7% growth. Transaction volume also increased by 4%, marking a continuation of the uptick in customer visits. Over the past year, Chipotle has outperformed the broader restaurant sector, which has struggled with a decline in traffic as consumers shift toward home cooking to save money.
Despite the positive overall trend, sales experienced a slowdown at the end of December, attributed to the holiday season, particularly Christmas and New Year’s Day falling midweek. CFO Adam Rymer noted that January 2025 has shown “volatile” sales performance, with external factors, including weather events like wildfires in Los Angeles, impacting traffic more significantly than in the previous year.
Rymer commented on the company’s outlook, stating, “While we believe underlying transaction trends are healthy and we have a strong plan for the year, we do compare against progressively tougher comps in the first half of the year and therefore are guiding to a low to mid-single-digit comp for the full year.” Analysts had predicted a full-year same-store sales growth of 5.4%, according to StreetAccount estimates.
Chipotle’s projections do not factor in potential tariffs on imports from Canada and Mexico, which the company estimates would increase its cost of sales by 60 basis points. The company recently reintroduced its Smoked Brisket item, which is priced higher than its other protein offerings.
For the fourth quarter, Chipotle reported a net income of $331.8 million, or 24 cents per share, up from $282.1 million, or 20 cents per share, in the previous year. After excluding various charges, the adjusted earnings stood at 25 cents per share.
In the last quarter, Chipotle opened 120 new restaurants, including its first international licensed location in Kuwait, marking its first entry into a new country in a decade. Looking ahead to 2025, the company plans to open 315 to 345 new locations, with over 80% featuring a “Chipotlane” designed for digital orders.
