Chipotle Mexican Grill Inc (CMG) Q3 2024 Earnings Call Highlights: Strong Revenue Growth Amid ...

GuruFocus News
4 min read

In This Article:

  • Revenue: $2.8 billion, a 13% increase year over year.

  • Comparable Sales Growth: 6%, driven by over 3% transaction growth.

  • Restaurant-Level Margin: 25.5%, a decrease of 80 basis points year over year.

  • Adjusted Diluted EPS: $0.27, representing 17% growth over last year.

  • New Restaurant Openings: 86 new restaurants, including 73 Chipotlanes.

  • Digital Sales: 34% of total sales.

  • Cost of Sales: 30.6%, an increase of 90 basis points from last year.

  • Labor Costs: 24.9%, about flat compared to last year.

  • Other Operating Costs: 13.8%, a decrease of 20 basis points from last year.

  • Cash and Investments: $2.3 billion, with no debt.

  • Share Repurchase: $488 million repurchased at an average price of $54.55.

Release Date: October 29, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Chipotle Mexican Grill Inc (NYSE:CMG) reported a 13% increase in sales, reaching $2.8 billion for the third quarter, driven by a 6% comp growth and over 3% transaction growth.

  • The company opened 86 new restaurants, including 73 Chipotlanes, indicating strong expansion efforts.

  • Digital sales accounted for 34% of total sales, showcasing the company's successful digital strategy.

  • Chipotle Mexican Grill Inc (NYSE:CMG) is rolling out new technology, such as a produce slicer and dual-sided plancha, to improve efficiency and throughput in restaurants.

  • The company is maintaining its full-year guidance of mid- to high single-digit comps, reflecting confidence in continued growth.

Negative Points

  • Restaurant-level margin decreased by 80 basis points year over year to 25.5%, indicating pressure on profitability.

  • Cost of sales increased by 90 basis points due to inflation in items like avocados and dairy, as well as higher usage and mix impact from premium offerings.

  • Labor costs are expected to remain high due to wage inflation, particularly in California, impacting overall cost structure.

  • The company faces challenges in executing throughput improvements, with only 60% of restaurants having the expo position in place.

  • Chipotle Mexican Grill Inc (NYSE:CMG) is experiencing some regional performance issues, particularly in California, following the FAST Act price increase.

Q & A Highlights

Q: Last call, you mentioned contemplating a price increase in Q4. Has recent traffic strength and labor cost pressures influenced your decision on this? A: Scott Boatwright, Interim CEO: We're closely monitoring the consumer and competitive market. While we see modest inflation, no price increase is planned currently, but we may consider it in the future. Adam Rymer, CFO: We're seeing low single-digit inflation on cost of sales and labor, excluding certain factors like brisket and avocado comparisons.

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