Chipotle: Strong Quarterly Results and Growth Plans

Last Updated: 9. November 2023By

Today we are taking a closer look at Chipotle Mexican Grill (NYSE: CMG), a popular fast food chain specializing in Mexican specialties such as burritos, tacos, and quesadillas. Let’s take a closer look at how Chipotle Mexican Grill is faring and how the company is currently performing.

Impressive Q3 Results from Chipotle Chipotle recently released its results for the third quarter and delivered impressive numbers. Total revenue grew 11.3% to $2.5 billion, with comparable restaurant revenue increasing by 5.0%. This growth was attributed to higher transaction and menu prices. Diluted earnings per share increased 23.0% year-over-year. Additionally, Chipotle opened 62 new restaurants, including 54 locations with a Chipotlane, a separate drive-thru lane for digital orders.

Stock Repurchase Program and Price Increases in California In addition to the strong results, Chipotle has approved a stock repurchase program for up to an additional $300 million. In the last quarter, the company bought back its own shares worth $226.3 million. However, customers in California will have to brace for higher prices on their burritos next year as Chipotle will be passing on the increased labor costs due to the higher minimum wage in California to the customers. About 15% of Chipotle’s restaurants are located in that US state.

Six-Month Chart of Chipotle Mexican Grill The recent quarterly results provided a strong tailwind. (Source: Stock Screener)

Outlook For the full year 2023, Chipotle expects mid- to high-single-digit growth in comparable sales and is planning to open 255 to 285 new restaurants. Chipotle’s expansion plans for the coming fiscal year involve an increased focus on opening new restaurants, particularly in international markets. The company is planning to open new locations in the Middle East and to introduce a franchise concept. Wall Street is predicting a 2.6% price increase by 2024 and Chipotle has already announced that it will be adjusting its prices due to inflation. The company stresses that it has pricing power and still has room for further price adjustments.

Chipotle will be releasing its numbers for the fourth quarter and fiscal year 2023 on February 6, 2024. The recent results were well-received by the market and the company is planning further growth and expansion.