Chipotle Meets Expectations Despite Challenges, Outlines Growth Plans

Key Highlights:

- Chipotle (CMG) reported 5.4% same-store sales growth and 7.4% full-year earnings growth, meeting analyst estimates.
- New CEO Scott Boatwright emphasized strong transaction growth and margin expansion.
- The company expects low- to mid-single-digit same-store sales growth in fiscal 2025, amid tougher year-over-year comparisons.
- Chipotle plans to open 315-345 new locations this fiscal year, aiming for 7,000 restaurants in North America.
- Analysts consider the financial guidance conservative, with shares dropping slightly in after-hours trading.

Earnings Breakdown:

- Adjusted earnings per share: $0.25 (vs. consensus estimate of $0.25)
- Revenue: $2.85 billion (vs. consensus estimate of $2.85 billion)
- Same-store sales growth: 5.4% (vs. consensus estimate of 5.67%)
- Average check growth: 1.4% (vs. consensus estimate of 1.29%)
- Traffic growth: 4% (vs. consensus estimate of 4.41%)

Full-Year Earnings:

- Adjusted earnings per share: $1.12 (vs. consensus estimate of $1.12)
- Revenue: $11.3 billion (vs. consensus estimate of $11.32 billion)
- Same-store sales growth: 7.4% (vs. consensus estimate of 7.4%)
- Average check growth: 2.1% (vs. consensus estimate of 1.99%)
- Traffic growth: 5.3% (vs. consensus estimate of 5.45%)

Impact of Potential Tariffs:

- CFO Adam Rymer stated that guidance does not account for the potential impact of tariffs on Mexican and Canadian imports.
- Less than 2% of Chipotle's cost of sales are sourced from Mexico, including avocados and tomatoes.

Innovation and Technology:

- Chipotle experienced success with its limited-time offering, Chipotle Honey Chicken.
- The company is testing a digital makeline and AI-powered avocado-coring robot, aiming to improve efficiency and order fulfillment.

Market Sentiment:

- Analysts remain optimistic about Chipotle's prospects in 2025, citing a strong innovation pipeline.
- Some analysts believe the financial guidance is conservative, leading to a slight dip in share prices in after-hours trading.