Chipotle Sales Surge At The Expense Of Margins

by Trefis Team
+2.14%
Upside
712
Market
727
Trefis
CMG
Chipotle
Rate   |   votes   |   Share

Chipotle Mexican Grill (NYSE:CMG) posted a solid set of numbers in its second quarter earnings helped by strong growth in the company’s same-store sales. Total revenues were up 18.2% to $816.8 million, helped by 5.5% growth in same-store sales and the addition of new restaurants. The company’s net income for the quarter stood at $87.6 million or $2.82 per share, an increase of 10% over the previous year quarter. Shares of the company jumped 5% after the earnings release. [1]

Comparable restaurant sales accelerated to 5.5% after a disappointing 1% growth in the first quarter. Chipotle is in the middle of implementing menu price hikes at its restaurants across the country, and the effect of it was evident on the increased sales. Some of the newly launched products such as ‘Sofritas’ or the margarita cocktails could have boosted the sales as well.

Comparable sales, or same-store sales, is an important measure to gauge a restaurant’s performance since it only includes the restaurants open for more than a year and excludes the effect of currency fluctuation.

See full analysis for Chipotle Mexican Grill

Margins Under Pressure

The high cost of raw materials have eaten into the margins lately; however, the price hikes brought some relief. For the quarter, food, beverage and packaging accounted for 33.1% of the sales, which is around a 100 basis points more than the previous year figure. Other expenses such as general & administrative, labor and occupancy were mostly stable. Historically, Chipotle has often clocked comparable sales growths of >10%, and therefore the revenue growth had outpaced the rate at which the fixed costs have grown.

Now that the restaurant chain is beginning to mature, you will find that the improvements in the fixed costs, as a percentage of sales will be gradual. Chipotle’s reported operating margins fell 160 basis points to 27.6%, primarily due to the negative impact of the high food and marketing costs.

Restaurant Addition Going Smoothly

The company is on track to add about 180 new stores in 2013. It opened 44 new restaurants in the second quarter taking its six month tally to 92. Recently, the company also opened its second ShopHouse Kitchen in Los Angeles. In the long term, we expect the rate of addition to slow down since we estimate its not possible to add 200 new restaurants a year without cannibalizing the sales. However, if the expansion of rate of ShopHouse were to pick up, we could see some upside to our estimates.

Investors see ShopHouse as an attractive proposition with a potential for many more such restaurants within the U.S. in the next few years. As of now, there is no concrete proof that ShopHouse growth will indeed replicate that of Chipotle’s stores. Therefore, our forecasts are conservative at the moment.

We have revised our price estimate for Chipotle to $394, which is roughly in line with the current market price.

Understand How a Company’s Products Impact its Stock Price at Trefis

Notes:
  1. Chipotle Mexican Grill, Inc. Announces Second Quarter 2013 Results, ir.chipotle.com []
Rate   |   votes   |   Share

Comments

Name (Required)
Email (Required, but never displayed)
Chipotle Logo
  • commented 3 weeks ago
  • tags: SBUX CMG MCD
  • babyliss pro,http://www.babyliss.us.org/

    basketball shoes,http://www.basketballshoes.com.co/

    beats by dre outlet,http://www.beatsbydrdre.co.com/

    beats by dre,http://www.beatsbydre.com.co/

    monster beats outlet,http://www.beats-by-dre.com.co/

    beats headphones,http://www.beatsheadphones.in.net/

    bottega,http://www.bottega.us/

    burberry outlet online,http://www.burberry-handbags.us.org/

    burberry,http://www.burberry--outlet.in.net/

    burberry outlet,http://www.burberryoutlet.me.uk/

    ralph lauren outlet,http://www.ralphlaurenpolo.in.net/

    ray-ban,http://www.ray-ban-outlet.us.com/

    ray ban outlet,http://www.raybans.us.org/

    ray ban,http://www.rayban-sunglasses.org.uk/

    ray ban sunglasses outlet,http://www.rayban-sunglasses.us.org/

    ray ban sunglasses,http://www.ray-ban-sunglasses-outlet.in.net/

    cheap ray ban,http://www.raybanwayfarer.in.net/

    knockoff handbags,http://www.replicahandbags.com.co/

    omega watches,http://www.replica-watches.us.com/

    jordan release dates,http://www.retro-jordans.com/

    replica watches,http://www.rolex-watches.me.uk/

    roshe run,http://www.rosherun.org.uk/

    roshe runs,http://www.rosheruns.us/

    ferragamo shoes,http://www.salvatoreferragamo.in.net/

    indoor soccer shoes,http://www.soccer-shoes.org/

    easton bats,http://www.softball-bats.us/

    supra shoes,http://www.suprashoes.in.net/

    swarovski jewelry,http://www.swarovskicrystal.com.co/

    swarovski,http://www.swarovskijewelry.com.co/

    swarovski,http://www.swarovski-uk.org.uk/

    north face jackets,http://www.the-northface.com.co/

    northface,http://www.thenorthface.in.net/

    north face,http://www.thenorth-face.org.uk/

    the north face,http://www.thenorthface.us.org/

    tory burch sandals,http://www.tory-burch-outlet.in.net/

    tory burch sandals,http://www.tory-burchoutlet.us.com/

    true religion jeans,http://www.true-religion.com.co/

    true religion,http://www.truereligionjeans.net.co/

    true religion jeans outlet,http://www.truereligion-outlet.com.co/

    ugg,http://www.ugg-australia.in.net/

    ugg australia,http://www.uggboots.net.co/

    uggs,http://www.uggbootsclearance.com.co/

    ugg boots clearance,http://www.uggsonsale.com.co/

    burberry outlet,http://burberry.outletnow.org/

    christian louboutin outlet,http://christianlouboutin.outlet-shoes.net/

    tory burch sandals,http://toryburch.salesandals.net/

    abercrombie and fitch,http://www.abercrombieand-fitch.com.co/

    abercrombie and fitch,http://www.abercrombiefitch.us.com/

    abercrombie,http://www.abercrombie-kids.us.com/

    nike huarache,http://www.air-huarache.co.uk/

    air jordan,http://www.airjordans.us/

    air jordan shoes,http://www.airjordanshoes2015.com/

    nike air max 2015,http://www.airmax-2015.org/

    air max,http://www.airmax-90.org/

    the north face,http://www.thenorthfacejackets.in.net/

    thomas sabo,http://www.thomas-sabo.me.uk/

    tiffany jewelry,http://www.tiffanyandco.net.co/

    tiffany co,http://www.tiffanyjewelry.us.org/

    timberland shoes,http://www.timberlandboots-outlet.in.net/

    timberland outlet,http://www.timberlandshoes.com.co/

    tommy hilfiger coupons,http://www.tommyhilfiger.net.co/

    tommy hilfiger,http://www.tommy-hilfigeroutlet.com/

    toms shoes,http://www.toms-shoes-outlet.net/

    tom's shoes,http://www.toms--outlet.in.net/

    toms shoes outlet,http://www.toms-shoes.com.co/

    burberry factory,http://www.burberryoutlet.club/

    burberry,http://www.burberryoutlet-online.in.net/

    cheap calvin kleins,http://www.calvinklein.co.com/

    celine bags,http://www.celinebags.org/

    chanel bags,http://www.chanelhandbags.net.in/

    softball bats,http://www.cheap-baseballbats.net/

    christian louboutin outlet,http://www.christianlouboutinshoes.ar.com/

    baseball jerseys,http://www.cheap-jerseys.us.org/

    air jordan shoes,http://www.cheap-jordans.net/

    michael kors handbags clearance,http://www.cheapmichaelkors.us.org/

    nike outlet,http://www.cheap-nikeshoes.net/

    oakley sunglasses cheap,http://www.cheapoakley.us.org/

    oakley outlet,http://www.cheapoakleysunglasses.ar.com/

    oakley sunglasses,http://www.cheap-oakleysunglasses.in.net/

    ray bans,http://www.cheaprayban.com.co/

    shoes outlet,http://www.cheapshoes.com.co/

    ugg boots,http://www.cheap-uggboots.in.net/

    flat iron,http://www.chiflatiron.net.co/

    christian louboutin shoes,http://www.christian--louboutin.in.net/

    louboutin,http://www.christianlouboutin.org.uk/

    christian louboutin outlet,http://www.christianlouboutinshoes.jp.net/

    coachoutlet.com,http://www.coachfactory-outlet.co.com/

    coach factory outlet,http://www.coachfactory-outlet-online.in.net/

    coach outlet online usa,http://www.coach-handbags.com.co/

    coach outlet online,http://www.coachoutlet-online.com.co/

    coach store outlet online,http://www.coachoutletstore.net.co/

    coach outlet online,http://www.coachoutletstore-online.com.co/

    chanel bags,http://www.coco-chanelbags.com.co/

    converse sneakers,http://www.converse.net.co/

    burberry handbags,http://www.designerhandbagsoutlet.com.co/

    eyeglasses stores,http://www.eyeglassesonline.us.org/

    eyeglasses frames,http://www.eyeglassframes.us.org/

    ralph lauren clothes,http://www.fashion-clothing.us.org/

    ferragamo shoes,http://www.ferragamo.com.co/

    salvatore ferragamo,http://www.ferragamoshoes.net/

    ghd,http://www.ghdhairstraightener.com.co/

    gucci outlet,http://www.gucci-uk.me.uk/

    gucci outlet,http://www.guccihandbags.net.co/

    gucci sale,http://www.gucci-outletsale.in.net/

    gucci belts,http://www.gucci-outlet.biz/

    gucci shoes uk,http://www.guccishoes.in.net/

    gucci handbags,http://www.guccishoes.us.org/

    hermes birkin,http://www.hermesbags.club/

    hermes,http://www.hermesbirkin.biz/

    hermes belt,http://www.hermesoutlet.top/

    hollisterco,http://www.hollister.us.org/

    hollister coupons,http://www.hollisterclothing-store.in.net/

    insanity workout calendar,http://www.insanityworkout.net.co/

    phone cases,http://www.iphone-cases.us/

    jimmy choo,http://www.jimmychoo.net.co/

    air jordan retro,http://www.jordanretro.org/

    jordan retro,http://www.jordan-shoes.com.co/

    juicy couture outlet,http://www.juicycouture.com.co/

    juicy couture handbags,http://www.juicycoutureoutlet.net.co/

    kate spade handbags,http://www.kate-spade.com.co/

    kate spade,http://www.katespade-outlet.com.co/

    kate spade,http://www.kate-spade.in.net/

    long champ,http://www.longchamp.us.org/

    longchamp handbags,http://www.longchamp.com.co/

    red bottom shoes,http://www.louboutin.jp.net/

    louis vuitton,http://www.louis-vuittoncanada.ca/

    louis vuitton outlet online,http://www.louisvuitton.jp.net/

    louis vuitton uk,http://www.louis--vuitton.org.uk/

    louis vuitton outlet,http://www.louisvuitton.so/

    louis vuitton outlet online,http://www.louisvuittonas.com/

    louis vuitton outlet,http://www.louisvuitton-outlet.com.co/

    louis vuitton handbags,http://www.louisvuitton-outlets.us/

    marc jacobs bags sale,http://www.marcjacobsonsale.com/

    mcm bags,http://www.mcmbags.in.net/

    mcm handbags,http://www.mcmhandbags.com.co/

    michael kors outlet store,http://www.michaelkors.so/

    michael kors outlet online,http://www.michael--kors.us.com/

    michael kors outlet,http://www.michaelkorsbags.us.org/

    michael kors uk,http://www.michaelkorshandbags.org.uk/

    michael kors,http://www.michael-kors-handbags.us.com/

    michael kors outlet online sale,http://www.michaelkorsoutlet.ar.com/

    michael kors purses,http://www.michael-kors-outlet.us.org/

    michael kors handbags,http://www.michaelkorsoutlet-online.ar.com/

    michael kors,http://www.michael-kors-outlet-online.us.org/

    ,http://www.michaelkorsoutletonline-sale.us.com/

    michael kors uk,http://www.michaelkors-uk.org.uk/

    mont blanc pens,http://www.montblanc-pens.in.net/

    new balance,http://www.newbalance-outlet.org/

    nike air max,http://www.nike-air-max.us/

    nike factory,http://www.nikefactory.org/

    nike free,http://www.nikefree5.net/

    nike free run,http://www.nikefree-run.net/

    nike free,http://www.nikefree-run.org.uk/

    air jordans,http://www.jordanrelease-dates.net/

    nike mercurial,http://www.nikemercurial.in.net/

    nike roshe,http://www.nikerosherun.us/

    nike outlet store,http://www.nikestore.us/

    north face,http://www.northface.us.org/

    north face clearance,http://www.northfaceoutlet.com.co/

    oakley outlet,http://www.oakleyoutlet.us.org/

    oakley sunglasses,http://www.oakleysunglasses.gr.com/

    oakley sunglasses cheap,http://www.oakleysunglassescheap.in.net/

    oakley sunglasses,http://www.oakley-sunglasses.top/

    omega watches,http://www.omegawatches.us.com/

    pandora charms,http://www.pandora-charms.org.uk/

    pandora jewelry,http://www.pandorajewelry.top/

    polo outlet,http://www.polo-outlets.com.co/

    prada outlet,http://www.pradahandbags.net.co/

    prada handbags,http://www.pradahandbags.com.co/

    prada shoes for men,http://www.pradashoes.com.co/

    polo ralph lauren outlet,http://www.ralph-lauren.org.uk/

    ralph lauren outlet,http://www.ralphlaurenoutlet.us.com/

    ralph lauren uk,http://www.ralph-lauren-outlet.org.uk/

    ralph lauren polos,http://www.ralphlaurenoutletonline.com.co/

    ralph lauren outlet online,http://www.ralphlaurenoutletonline.in.net/

    uggs on sale,http://www.uggsoutlet.com.co/

    coach outlet store,http://www.uptocoachoutlet.com/

    vans outlet,http://www.vansshoes.us/

    wedding dress,http://www.weddingdressesuk.org.uk/

    lululemon outlet,http://www.yogapants.com.co/

    cheap ugg boots,http://www.ugg-boots.us.org/

    ralph lauren outlet online,http://www.poloralphlaurenoutlet.net.co/

    burberry handbags,http://www.burberryoutletonline.ar.com/

    toms outlet,http://www.toms-outlet.net.co/

    michael kors outlet online,http://www.michaelkors.in.net/

    christian louboutin shoes,http://www.christianlouboutinoutlet.net.co/

    tory burch handbags,http://www.toryburchsale.com.co/

    prada outlet,http://www.pradaoutlet.com.co/

    longchamp outlet,http://www.longchamp-handbags.in.net/

    longchamp,http://www.longchampoutlet.com.co/

    chanel bags,http://www.chanel-bags.com.co/

    true religion jeans outlet,http://www.truereligion-outlet.us.org/

    abercrombie fitch,http://www.abercrombie-and-fitch.us.com/

    hollister co,http://www.hollisterclothing.in.net/

    new balance store,http://www.newbalance-shoes.org/

    converse sneakers,http://www.converses-shoes.net/

    lululemon outlet,http://www.lululemonoutlet.com.co/

    cheap jerseys,http://www.nfl-jersey.in.net/

    nfl jerseys,http://www.cheapjerseys.us.org/

    rolex watches,http://www.rolex-watches.us.com/

    omega watches,http://www.rolexwatchesforsale.us.com/

    p90x,http://www.p90xworkout.in.net/

    giuseppe zanotti,http://www.giuseppezanotti.com.co/

    mac cosmetics,http://www.maccosmetics.net.co/

    instyler,http://www.instyler.in.net/

    mizuno,http://www.mizunorunning.net/

    purses and handbags,http://www.handbagsoutlet.com.co/

    hilfiger outlet,http://www.hilfigeroutlet.in.net/

    ed hardy clothing,http://www.edhardy.in.net/

    levis jeans,http://www.levisjeans.com.co/

    bcbg max azria,http://www.bcbgdresses.net/

    bebe clothing,http://www.bebeclothing.net/

    harrods london,http://www.harrods-london.co.uk/

    gucci handbags,http://www.guccishoes.com.co/

    ralph lauren outlet,http://www.ralphlaurenoutletonline.us.org/

    yoga pants,http://www.lululemoncanada.ca/

    lululemon canada,http://www.yoga-pants.ca/

    nike canada,http://www.nike-shoes-canada.ca/

    pandora,http://www.pandora-charms-canada.ca/

    watches canada,http://www.rolex-watches-canada.ca/

    michael kors canada,http://www.michael-kors-canada-outlet.ca/

    adidas shoes,http://www.adidas--canada.ca/

    tiffany,http://www.tiffanyandco-canada.ca/

    abercrombie kids,http://www.hollistercanada.ca/

    abercrombie,http://www.abercrombie-and-fitch.ca/

    oakley sunglasses,http://www.oakley-sunglasses-canada.ca/

    wedding dresses,http://www.wedding--dresses.ca/

    swarovski canada,http://www.swarovskicanada.ca/

    tommy hilfiger,http://www.tommy-hilfiger-canada.ca/

    new balance,http://www.new-balance.ca/

    burberry,http://www.burberrycanada.ca/

    north face,http://www.the-north-face.ca/

    polo ralph,http://www.ralph-lauren.ca/

    rayban outlet,http://www.ray--ban.ca/

    christian louboutin,http://www.christian-louboutin-shoes.ca/

    nike air max,http://www.nike-air-max.ca/

    bcbg max azria,http://www.bcbg-max-azria.ca/

    uggs canada,http://www.uggscanada.ca/