Here’s What To Look For In Chipotle’s Q1 Earnings Today

Chipotle Mexican Grill (CMG) will report its first quarter financial results today after the close. Here’s what you should look out for:

Chipotle is expected to report first quarter revenue of $2.675 billion and earnings per share of $11.68. Of the previous four quarters, the company beat both top and bottom line expectations three times.

Revenue and Comparable Restaurant Sales Growth: Chipotle reported a robust increase in total revenue and comparable restaurant sales in the fourth quarter of 2023. You should look for continued growth in these areas, particularly given the company’s aggressive expansion strategy, including the opening of new locations with Chipotlanes, which have been enhancing customer access and convenience.

Operating and Restaurant Level Margins: Improvement in operating margin and restaurant-level operating margin was noted in the previous quarter due to sales leverage and operational efficiencies. It’s important to see if these margins have continued to improve or stabilize amidst ongoing economic pressures such as inflation and wage increases.

Expansion Strategy: With a record number of new restaurants opened in 2023, Chipotle’s management has shown a clear focus on expansion. The first quarter report will likely provide updates on the pace of new openings and any changes in strategy, particularly in response to potential economic headwinds or supply chain issues.

Digital Sales: As digital sales constituted a significant portion of total food and beverage revenue, any trends or shifts in this area will be important. Increased digital sales can indicate strong customer engagement and successful adaptation to changing dining habits.

Cost Management and Profitability: Key to Chipotle’s financial health is how effectively it can manage costs, especially with noted increases in food, beverage, and packaging costs due to inflation. How Chipotle continues to handle these pressures could significantly impact its profitability.

Stock Repurchase Program: Chipotle announced an additional $200 million stock repurchase program in the fourth quarter 2023. Look for updates on this program, as it reflects the company’s confidence in its financial stability and commitment to delivering shareholder value.

Guidance and Future Outlook: Management’s projections for the remainder of 2024 will be important to note, especially any forecasts concerning revenue growth, margin expectations, and the impact of broader economic factors. This guidance will help you gauge the management’s confidence in the sustainability of growth and operational efficiency.

By focusing on these areas, you can better understand Chipotle’s current financial health and its strategic priorities moving forward. For more detailed information, refer to the fourth quarter 2023 results (and first quarter 2024 results when they release) on Chipotle’s investor relations page here.