Chipotle Meets Expectations Despite Headwinds, Sets Guidance for 2025

Chipotle Mexican Grill (CMG) reported solid financial results for its fourth quarter and full fiscal year, beating expectations despite challenging weather and tough comparisons.

Key Financial Metrics

* Q4 Same-Store Sales: 5.4% growth
* Q4 Adjusted Earnings Per Share: $0.25, in line with estimates
* Q4 Revenue: $2.85 billion, meeting expectations
* Full-Year Same-Store Sales: 7.4% growth
* Full-Year Adjusted Earnings Per Share: $1.12, in line with estimates
* Full-Year Revenue: $11.3 billion, slightly below estimates

Management Outlook

New CEO Scott Boatwright expressed optimism about the company's performance, citing strong transaction-driven sales growth and expanding margins. For fiscal 2025, Chipotle expects:

* Same-store sales growth in the low- to mid-single-digit range
* The opening of 315-345 new locations

Market Reaction

Chipotle's shares initially dropped 5% in after-hours trading, reflecting some investor concerns about the conservative sales guidance. However, analysts remain positive about the company's long-term prospects.

Earnings Highlights

* Traffic growth outperformed estimates in both the fourth quarter and full year.
* Average check size also increased slightly.
* Food, beverage, and packaging costs rose due to portion control, protein mix shift, and inflation.
* Chipotle raised prices by 2% in December, with further price increases planned if inflation persists.

Innovation and Technology

Chipotle continues to invest in innovation and technology to enhance customer experience and operational efficiency. The company has introduced:

* Chipotle Honey Chicken: A successful limited-time offering that generated excitement.
* Digital Makeline: A conveyor belt system that automates ingredient dispensing for bowl and salad orders.
* Autocado: A robot that peels and cores avocados for guacamole.
* New equipment: Produce slicers, dual-sided grills, rice cookers, and dual-backed fryers to improve throughput and cooking times.

Conclusion

Chipotle's strong financial performance in fiscal 2024 demonstrates its ability to navigate challenges and deliver consistent growth. The company's focus on innovation and operational efficiency positions it well for continued success in the future.