Chipotle Shares Dip After Mixed Earnings Report

Chipotle Mexican Grill, Inc. (NYSE:CMG) saw its shares decline on Wednesday in response to the release of its fourth-quarter earnings for the 2024 fiscal year. The earnings report was released on Tuesday after the market had closed.

Overview of Earnings: Chipotle's quarterly sales reached $2.845 billion, falling short of analysts' expectations of $2.847 billion. Despite this miss, the company achieved a notable year-over-year sales increase of 13.1%. When examining earnings per share, Chipotle reported adjusted earnings of 25 cents, which exceeded the analysts' forecast of 24 cents.

The restaurant chain also reported a 5.4% rise in comparable restaurant sales and posted an operating margin of 14.6%. However, there was a slight decrease in the restaurant-level operating margin, dropping from 25.4% in the same quarter last year to 24.8% this year.

During the fourth quarter, Chipotle opened a total of 119 new restaurants, with 95 of these locations featuring a Chipotlane, a drive-thru service for picking up orders. Additionally, the company executed a significant stock buyback, repurchasing $331.3 million in shares at an average price of $59.83 during the quarter.

CEO's Remarks: Scott Boatwright, CEO of Chipotle, commented on the company's performance: "Chipotle had another outstanding year, delivering strong transaction-driven comps each quarter, expanding margins, adding over 300 new restaurants, gaining momentum in key industry-leading brand metrics, making progress on many restaurant operating initiatives and building our footprint internationally."

Analyst Reactions: In light of the earnings report, several financial analysts modified their price targets for Chipotle's shares:

• Stifel analyst Chris O’Cull maintained a Buy rating on Chipotle but reduced the price target from $70 to $68.
• Piper Sandler analyst Brian Mullan retained a Neutral rating while lowering the price target from $60 to $59.
• Wells Fargo analyst Zachary Fadem kept an Overweight rating and adjusted the price target from $75 to $70.
• Citigroup analyst Jon Tower also preserved a Buy rating but increased the price target from $69 to $70.
• Keybanc analyst Eric Gonzalez maintained an Overweight rating and lowered the price target from $66 to $64.

Current Price Action: As of the latest update, Chipotle's shares are trading down by 2.51%, bringing the stock price to $57.54, based on data from Benzinga Pro.

Chipotle, Earnings, Stocks