Chipotle is expected to deliver another positive profit as investors await the latest numbers after the bell on Wednesday.
Limited-time sales, such as the return of premium-priced carne asada and chicken al pastor, could help boost performance in a difficult macro-consumer environment. The chain saw strong foot traffic in 2023, but is battling rising labor costs and persistent inflation, even as it has raised prices to offset those headwinds.
“Chipotle is one of the best-performing restaurant stocks, and we expect its fundamentals to continue to outperform operating results. “Decision power supports sustainable MSD+ (mid-single digit) same-store sales growth,” Deutsche Bank's Lauren Silverman wrote in a note to clients.
Wall Street will be looking for updates on automation efforts like Autocado. CEO Brian Nicol told Yahoo Finance that the company is close to introducing the machine.
“We are already working on our third or fourth prototype. [of Autocado]Now you are ready to enter the restaurant. I'm sure that once we implement this into our restaurant, we'll learn something that we may need to repeat again. ”
Investors will also be watching how California's Fast Act, which raised fast-food wages to $20 an hour, has affected business in the state. Analysts agreed that Chipotle is one of the companies with the brand strength and fan base to adapt to change.
“I think the brands that offer a lot of value and have a lot of traffic are in the best position,” said Peter Saleh of BTIG, adding that many burger menu items cost between $12 and $13. He noted that a Chipotle chicken bowl averages $9 nationwide.
“They've built quite a bit of momentum in the business in terms of traffic,” Citi analyst John Tower told Yahoo Finance.
About 14% of all Chipotle stores are in the Golden State, and Chipotle is increasing the number of appetizers in the state by about 7% to cover workforce growth, William Blair's Sharon Zachphier said in a note to customers. He said he suspected the company had increased prices (by 8% to 10%). cost pressure.
Here's what Wall Street expects from Chipotle, according to Bloomberg estimates.
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Revenue: $2.67 billion, 12.9% increase from Q1 2023 ($2.37 billion)
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Adjusted EPS: $11.66, up 11.1% from Q1 2023 ($10.50)
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Same store sales growth: 5.13%
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Menu price increase: 2.87%
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Increase in transactions: 3.03%
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Average increase in checks: 2.00%
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Digital sales growth: 3.39%
In its last quarterly release, Chipotle said it expected to open 285 to 315 new restaurants in 2024, assuming “developer, permitting, inspection and utility delays do not worsen.” .
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Brooke DiPalma is a senior reporter at Yahoo Finance. Follow her on Twitter @brooke di palma Or email bdipalma@yahoofinance.com.
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