Chipotle Mexican Grill Stocks Dip After Missing Revenue Estimates, Tariff Concerns Linger

Key Points:

* CMG shares declined Wednesday after disappointing revenue and same-store sales results.
* Despite opening 119 new locations, revenue gains fell short of expectations.
* CFO Adam Rymer estimates a potential 60 basis point impact on cost of sales due to proposed tariffs.
* Despite today's decline, CMG shares have gained approximately 17% over the past year.

Details:

Chipotle Mexican Grill (CMG) reported a fourth-quarter revenue increase of 13% to $2.85 billion, marginally below analyst estimates. Comparable restaurant sales growth of 5.4% also fell below expectations. Adjusted earnings per share (EPS) aligned with forecasts at $0.25.

The revenue growth was primarily attributed to the addition of 119 new restaurants, resulting in a 4.0% increase in transactions and a 1.4% rise in average check.

Tariff Concerns:

CFO Adam Rymer expressed concerns about the potential impact of proposed tariffs on cost of sales, estimating an ongoing impact of approximately 60 basis points if implemented. However, Rymer noted that Chipotle sources only a small percentage of sales from Mexico (2%), Canada, and China (less than 0.5%).

Outlook:

Chipotle anticipates full-year comparable restaurant sales growth in the low- to mid-single-digit range, below Visible Alpha's estimate of 3.76%. Despite these concerns, CMG shares remain approximately 17% higher than this time last year.