Chipotle Meets Expectations Amidst Challenges, Sets Conservative Guidance
Chipotle (CMG) reported solid fourth quarter results, meeting market expectations despite unfavorable weather conditions and tough comparisons to its previous quarter boosted by the popular chicken al pastor offering.
Key Metrics
* Same-store sales increased by 5.4% for the quarter and 7.4% for the full year.
* Adjusted earnings per share came in at $0.25, matching consensus estimates.
* Revenue reached $2.85 billion, also meeting estimates.
* Average check size grew by 1.4% in the quarter and 2.1% for the year.
* Customer traffic increased by 4% in the quarter and 5.3% for the year.
CEO Outlook
New CEO Scott Boatwright expressed optimism, stating that 2024 was "another outstanding year" marked by consistent sales growth driven by strong transactions and margin expansion.
Guidance
For fiscal 2025, Chipotle anticipates same-store sales growth in the low to mid-single digits and plans to open 315 to 345 new locations. This guidance is considered conservative by some analysts, who expected mid-single digit sales growth.
Headwinds
Chipotle identified potential impacts from tariffs on Mexican and Canadian imports that could affect avocado pricing. The company highlighted that food, beverage, and packaging costs have increased significantly due to its focus on generous portions, a shift in protein mix, and inflation.
Menu Innovations
The likely release of Chipotle Honey Chicken as a limited-time offering in March has generated excitement among analysts, who believe it could boost first-quarter sales by 0.5%.
Automation
Chipotle continues to invest in automation to enhance efficiency. The digital makeline and Autocado robot streamline the preparation of burritos and guacamole, respectively.
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