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Chipotle Mexican Grill shares surge 7% on Q1 beat; analysts bulled-up

Published 04/26/2023, 06:09 AM
Updated 04/26/2023, 06:21 AM
© Reuters.  Chipotle Mexican Grill shares surge 7% on Q1 beat
CMG
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Chipotle Mexican Grill (NYSE:CMG) shares are moving higher in premarket Wednesday following the company’s reported Q1 results, with EPS of $10.50 coming in better than the consensus estimate of $8.95.

Revenue grew 17.2% year-over-year to $2.4 billion, beating the consensus estimate of $2.34B, driven by a 10.9% increase in comparable restaurant sales and new restaurant openings.

In-restaurant sales increased 22.9% year-over-year in Q1, while digital sales represented 39.3% of total food and beverage revenue.

"Our strong performance in the first quarter confirms that our focus on getting back to the basics and re-establishing Chipotle's standards of excellence is beginning to drive results," said Chairman and CEO Brian Niccol.

The company expects Q2 and full 2023-year comparable restaurant sales growth in the mid to high-single-digit range. It expects 255 to 285 new restaurant openings (including 10 to 15 relocations to add a Chipotlane) in 2023.

Credit Suisse analysts lifted the price target to $2,200 per share from the prior $2,050 on positive momentum.

"We continue to have high conviction in this rare compounding growth story positioned for double-digit top-line, margin expansion & unit growth acceleration, and together with relative valuation, believe CMG offers a favorable risk/reward."

Similarly, Stifel analysts hiked the target to $2,100 per share to reflect raised 2023 EPS estimates.

"The transaction growth continued in March and April, which is impressive given many quickcasual and casual dining chains have seen softer traffic during those periods. Restaurant margin was up 490 bps YoY to 25.6% (Street 24.3%) and expected to be nearly 27% in 2Q (Street 26.3%) with significantly less menu pricing. Sales leverage, easing commodity inflation, and labor efficiencies are benefiting margin performance."

(Additional reporting by Senad Karaahmetovic)

 
 

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