Chipotle earnings misses estimates of revenue, earnings, and same-store sales

This story breaks and is updated.

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

In its fourth-quarter results, Chipotle saw same-store 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 versus Wall Street estimates, according to Bloomberg:

• Revenue: $2.2 billion versus $2.23 billion

• Adjusted earnings per share: $8.29 vs. $8.91 per share

• Same Store Sales: up 5.6% versus 7.04%

Total revenue rose 11.25% in the most recent quarter. Operating margin was 13.6%, up from 8.1% in the quarter. That compares to revenue of $2.23 billion in the third quarter, up 13.9% year over year.

Citi, which has a buy rating and a price target of $1,986, believes expectations for this quarter are “muted” given the “company forecast for negative traffic.” Foot traffic fell by 10.2% in the fourth quarter compared to 2021, according to analytics firm Placer.ai.

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

A rise in labor costs and a rise in avocado prices (although they are now trending down) were the main reasons for higher menu prices.

Analysts are also keeping an eye on the net quarter.

UBS’s Dennis Geiger expects “better traffic this burrito season,” which Chipotle calls its peak season (March through May). The company has a buy rating and a price target of $1,800.

Previously, the burrito chain recently announced plans to hire 15,000 workers. This is a step in the company’s long-term goal of reaching 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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