Chipotle Mexican Grill
For restaurants, this is a particularly tough environment given the shortage and competition for workers and rising cost and supply chain bottlenecks. However, Chipotle has performed better than most restaurant stocks over the past year as its stock is only lower by 5% due to its pricing power, while the average restaurant stock is closer to being down 20%. Since the stock peaked in late September, Chipotle dropped 33% until it bottomed in late January.
Inside the Numbers
In Q4, Chipotle reported $5.58 in earnings per share which topped expectations of $5.25 per share. This was a slight decline from last year by about 30%. Revenue came in-line with expectations at $1.96 billion vs. $1.96 billion, a 22% increase from last year. Same-store sales increased by 15.2%, beating expectations of a 14.8% increase.
The company noted higher prices for beef, avocados and transportation costs during the quarter, and it noted a decline in sales and foot traffic during the omicron wave which continued in January.
The company also seems to have higher pricing power than competitors like McDonald's
Prices are about 10% higher at Chipotle compared to last year. The company's digital sales now account for 41.6% of total sales which can increase speed and efficiency.
Next quarter, Chipotle expects same-store sales growth in the mid- to high-single digits, while analysts are forecasting an 8.9% increase in Q1. The company also expects to open between 235 and 250 new locations after opening 78 in Q4. Long-term, it sees between 6,000 and 7,000 restaurants in the U.S.
Overall, Chipotle has been one of the best-performing growth stocks of the last decade. And, its strong performance during the pandemic validates these gains as the company has shown itself to be able to withstand inflationary pressures much better than its peers and other restaurants.
