Chipotle earnings misses estimates on revenue, earnings, same-store sales

This story is breaking and being updated.

Chipotle Mexican Grill (CMG) reported quarterly results that missed expectations on Tuesday, sending shares down more than 5% in after-hours trading.

In its fourth-quarter results, Chipotle posted same-stores sales that missed expectations as the company navigated a “challenging and fluid macro environment,” CEO Brian Niccol said in the release.

Here’s what the California-based burrito chain reported, compared to Wall Street estimates, according to Bloomberg:

• Revenue: $2.2 billion versus $2.23 billion

• Adjusted earnings per share: $8.29 versus $8.91 per share

• Same-store sales: up 5.6% versus 7.04%

Total revenue increased by 11.25% last quarter. Operating margin was 13.6%, up from 8.1% for the quarter. This is compared to third-quarter revenue of $2.23 billion, which was up 13.9% year-over-year.

Citi, which has a Buy rating and $1,986 price target, believes this quarter’s expectations are “muted,” given “company guidance around negative traffic.” In Q4 foot traffic dropped 10.2%, compared to 2021, per analytics company Placer.ai.

Despite that, year-to-date shares are up 22.5%. In August of 2022, Chipotle raised menu prices 4%. That was the third time in 15 months.

An increase in labor costs and well as a spike in avocado prices (though now trending lower) were key drivers of higher menu prices.

Analysts are also keeping an eye on net quarter.

Dennis Geiger of UBS expects “better traffic this burrito season,” which Chipotle says calls its busy season (March to May). The firm has a Buy rating and price target of $1,800.

Ahead of that, the burrito chain recently announced plans to hire 15,000 workers. This is one step of the company’s long-term goal to reach 7,000 locations in North America.

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Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected].

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