Chipotle Q4'18 Earnings - Live Updates
After the close, Chipotle Mexican Grill (CMG) reported earnings that dazzled the market. Yet, the restaurant stock is still recovering from the health scare juicing comp sales for a highly expensive stock
Q4'18 earnings details:
- EPS of $1.72 beat by $0.32
- Revenue of $1.23B, up 10.8% beats by $40 million
- Comp sales 6.1% versus 4.5% forecast
- Restaurant-level operating margin rose 210 bps to 17.0% of sales during the quarter.
For 2019, management is anticipating the following:
- Mid-single digit range comparable restaurant sales growth
- 140 to 155 new restaurant openings
- An estimated effective full year tax rate between 27.0% and 30.0%
The bottom line is that this doesn't alter the thesis that Chipotle returns to a $10-12 EPS based on normalized results while the stock trades for $568 in AHs trading now. Not a stock one should want to own when earnings really aren't growing that fast.
Update 4:20 est
Digital sales skyrocketed 66% during the quarter and accounted for 12.9% of all sales in part due to delivery promotions. The market is looking at this move as bullish, but the reality is that Chipotle juiced comp sales from digital sales that didn't contribute to income growth.
The average AUV is still at $2.0 million, down from $2.5 million at the peak. A lot of the comp sales gains are just a slow recapture of the lost sales and nothing to celebrate with a rich stock valuation.
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