Jul. 22, 2014, 12:47 PM
Jul. 22, 2014, 12:12 PM
- "With most restaurants struggling to drive positive traffic, CMG remains an anomaly, justifying an outsized valuation, with scarcity worth the premium," says Barclays in response to Chipotle's (CMG +12.8%) big Q2 beat. However, the firm is hesitant to recommend shares, given they now trade at 39x forward EPS.
- "As more of Chipotle’s markets are touched with menu price increases this quarter, the company is teed up for at least another two quarter of strong earnings growth," thinks Belus Capital.
- The company attributes only 250 bps of its 17.3% same-store growth (blew away a consensus of 10.5%) to its price hikes. Average transactions during peak lunch and dinner hours each rose by 8 Y/Y, and average check size rose by 5%, thanks partly to larger group sizes.
- Chipotle did admit on its CC (transcript) its price hikes led to a "slight shift" among customers from steak to chicken, but insists "customers have generally responded well" otherwise. The company also noted it's experimenting with take out-focused restaurants that have limited seating, particularly in U.S./European locales with high real estate costs.
- Prior Chipotle earnings coverage
Jul. 22, 2014, 9:14 AM
Jul. 21, 2014, 4:30 PM
- With the help of its price hikes, Chipotle's (NYSE:CMG) same-store sales rose 17.3% Y/Y in Q2, a marked improvement from Q1's 13.4% clip and fueling a big Q2 beat.
- The company now expects mid-teens 2014 same-store growth, up from prior guidance of high-single digit growth. It still forecasts 180-195 new 2014 restaurant openings.
- Restaurant level op. margin was 27.3%, -30 bps Y/Y but +140 bps Q/Q. Food costs were 34.6% of revenue vs. 34.5% in Q1 and 33.1% a year ago. But labor costs -90 bps Y/Y to 21.8%, and occupancy costs -50 bps to 5.4%. G&A costs +90 bps to 7.1% of revenue.
- 45 new restaurants were opened, raising total count to 1,681.
- Q2 results, PR
Jul. 21, 2014, 4:05 PM| 5 Comments
Jul. 20, 2014, 5:35 PM
Jul. 11, 2014, 11:35 AM
- Taco Bell (YUM) plans to update its Cantina Bell menu next week with more meat-heavy options and new protein items such as Greek yogurt.
- Incoming CEO Brian Niccol says the changes are being made in part to appeal to Millennials.
- The Cantina Bell menu hasn't dented the momentum at Chipotle (CMG -0.3%) as some CMG skeptics forecast it would.
Jun. 30, 2014, 7:07 AM
- A jump in beef prices has restaurant operators scrambling to avoid taking a hit on margins this year.
- While Chipotle has been able to pass on higher input costs to consumers, most chains are seeing consumer push back on price hikes.
- A new twist" Fast-food chains Carl's Jr. and Hardee's have introduced smaller-sized sandwiches to its menu to try to keep profits intact.
- Related stocks: CAKE, CBRL, CMG, DPZ, DRI, EAT, JACK, MCD, PNRA, RRGB, RT, SBUX, SONC, WEN, BWLD, THI, BDL, NATH, LUB, BKW, CHUY, BLMN, PZZA, TXRH, DENN, KKD, BBRG, DFRG, BOBE, RUTH, IRG, DIN.
- Previous: Beef prices could pressure restaurant margins
Jun. 24, 2014, 11:11 AM
- Chipotle (CMG) says it will purchase 20M pounds of locally grown produce this year, up 33% from the level of a year ago.
- The company uses 45 different local farms across the country to supply it outside of the normal distribution chain.
- The percentage of consumers that have indicated they factor in the sourcing of quick-service food has risen steadily over the last few years.
Jun. 17, 2014, 11:50 AM
- Beef prices keep moving higher as a drought in Texas diminishes what's already a tight supply of cattle in the U.S.
- Though beef demand in the U.S. is peaking with the summer grilling season starting, the impact on margins for sellers from higher wholesale prices could be felt later this year when consumers push back against absorbing the extra costs.
- What to watch: Chipotle (CMG) passed on its menu price increases to consumers with relative ease, but other chains (MCD, BKW, WEN, TXRH, BLMN, RUTH) are expected to feel pressure on their bottom lines from higher beef prices.
Jun. 12, 2014, 5:58 PM
- Chipotle Mexican Grill (CMG) bucked the general downward trend in restaurant stocks today, rising 2% as Raymond James raised its share price target to $625 from $560 and boosted its EPS outlook to reflect "tighter assumptions regarding a menu price increase currently being rolled throughout the system."
- Shares have gained ~15% in the past three weeks, and the firm thinks CMG can continue higher on continued powerful comp outperformance (~10% vs. flat industry) and dramatically improved margins and EPS growth in H2 2014 (+40% Y/Y vs. +7.6% in Q1) behind the menu price increase.
Jun. 2, 2014, 11:34 AM
- Improved traffic at restaurants chains in April helped boost the Restaurant Performance Index monitored by the National Restaurant Association by 0.3% to 101.7.
- The Expectations Index, which measures the six-month outlook for operators, improved 0.2% to 102.2 to mark the highest level for the index in two years.
- Restaurant stocks: CAKE, CBRL, CMG, DNKN, DPZ, DRI, EAT, JACK, MCD, PNRA, RRGB, RT, SBUX, SONC, WEN, BWLD, THI, BDL, NATH, LUB, BKW, CHUY, BLMN, PZZA, TXRH, DENN, KKD, BBRG, DFRG, BOBE, RUTH, IRG, DIN
May. 29, 2014, 11:20 AM
- Chipotle (CMG +1.2%) has been rolling out price hikes across the U.S. without any reports of widespread consumer backlash.
- RBC Capital Markets sent some some boots into the streets of 11 major metropolitan markets to determine which items and locations are seeing the biggest price bumps.
- Menu increases by item: Steak burrito 8.3%-10.4%; Vegetarian burrito 4%-7.2%; Guacamole 8.3%-11%; Soda 12.5% in most locations.
- Overall menu prices: +6.5% for core menu items; +7.3% for side items and drinks
- A look back: Chipotle's comp sales rise 13.4% in Q1
May. 15, 2014, 12:28 PM
- Shareholders at Chipotle (CMG -2.4%) rejected an executive compensation plan the company proposed at today's annual meeting.
- A spokesperson for the company say the measure only received 23% of the vote.
- Full voting details will be posted in a SEC filing.
- Previous: Executive pay on the agenda at Chipotle annual meeting.
May. 15, 2014, 7:04 AM
- Chipotle (CMG) paid each of its co-chief executive officers in excess of $24M to put the restaurant chain near the top of the pay list.
- The co-CEOS, Steve Ellis and Montgomery Moran, have also taken in more than $100M in stock awards over the last three years.
- What to watch: Chipotle shareholders vote on two measures related to executive compensation at today's annual meeting. Analysts will watch closely how the institutional blocks vote to see if executive comp has become a hot button issue.
May. 6, 2014, 1:34 PM
- Restaurant chains saw sales increase at a slightly higher rate last year than sales at independent chains and concepts, according to data from GE Capital.
- The 100 largest chains saw sales grow at a rate of 3.5% vs. the industry average of 3.1%.
- Consumers spent more money per restaurant visit in 2013, but industry-wide same-store sales fell off 0.1% with traffic numbers down.
- For the 6th year in a row, sales at quick-service restaurants rose faster than sales at full-service establishments.
- Restaurant stocks: CAKE, CBRL, CMG, DNKN, DPZ, DRI, EAT, JACK, MCD, PNRA, RRGB, RT, SBUX, SONC, WEN, BWLD, THI, BDL, NATH, LUB, BKW, CHUY, BLMN, PZZA, TXRH, DENN, KKD, BBRG, DFRG, BOBE, RUTH, IRG, DIN.
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