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Chipotle Mexican Grill Meets on the Top Line, Misses Where it Counts

By Seth Jayson | More Articles
February 2, 2012 | Comments (2)

Chipotle Mexican Grill (NYSE: CMG  ) reported earnings on Feb. 1. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Chipotle Mexican Grill met expectations on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share increased significantly.

Gross margins grew, operating margins improved, and net margins were steady.

Revenue details
Chipotle Mexican Grill booked revenue of $596.7 million. The 23 analysts polled by S&P Capital IQ foresaw net sales of $591.3 million. Sales were 24% higher than the prior-year quarter's $482.5 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
EPS came in at $1.81. The 25 earnings estimates compiled by S&P Capital IQ averaged $1.83 per share. GAAP EPS of $1.81 for Q4 were 24% higher than the prior-year quarter's $1.46 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 37.6%, 40 basis points better than the prior-year quarter. Operating margin was 16.0%, 30 basis points better than the prior-year quarter. Net margin was 9.6%, about the same as the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $615.4 million. On the bottom line, the average EPS estimate is $1.90.

Next year's average estimate for revenue is $2.70 billion. The average EPS estimate is $8.66.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 2,494 members out of 2,955 rating the stock outperform, and 461 members rating it underperform. Among 1,041 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 928 give Chipotle Mexican Grill a green thumbs-up, and 113 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Chipotle Mexican Grill is outperform, with an average price target of $337.10.

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Seth Jayson owned shares of the following at the time of publication: Chipotle Mexican Grill. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Chipotle Mexican Grill. Motley Fool newsletter services have recommended buying shares of Chipotle Mexican Grill. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 02, 2012, at 7:47 PM, tennis1972 wrote:

    so Jason are you buyer or seller of cmg at these levels? your article just reports the numbers as we all know this.

  • Report this Comment On February 03, 2012, at 2:33 AM, ikkyu2 wrote:

    That's odd that it should have two stars, with that kind of support from CAPS folks. Recent picks must get weighted a lot more heavily. That's too bad; I'm as bullish on CMG now as I was before it pulled this last four-bagger.

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5/25/2012 4:03 PM
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