Chipotle Mexican Grill, Inc. CMG reported mixed first-quarter 2025 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.
Chipotle's first-quarter results were affected by various headwinds, including unfavorable weather conditions and reduced consumer spending. Nonetheless, the company has made notable strides in enhancing restaurant operations, advancing back-of-house innovations and expanding its brand presence both domestically and internationally. During the quarter, the company initiated the launch of Chipotle Honey Chicken and reported increased customer traffic and incremental transactions across locations.
CMG’s Q1 Earnings & Revenue Discussion
In the quarter under review, CMG reported adjusted earnings per share (EPS) of 29 cents, outpacing the Zacks Consensus Estimate of 28 cents. The bottom line increased 7.4% from 27 cents reported in the year-ago quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Chipotle Mexican Grill, Inc. Price, Consensus and EPS Surprise
Chipotle Mexican Grill, Inc. price-consensus-eps-surprise-chart | Chipotle Mexican Grill, Inc. Quote
Quarterly revenues of $2.88 billion missed the consensus mark of $2.91 billion by 1.5%. However, the top line rose 6.4% on a year-over-year basis. This upside was driven by new restaurant openings.
Comparable restaurant sales in the first quarter fell 0.4% against 5.4% growth reported in the previous quarter. During the quarter, comps were hurt by lower transactions of 2.3%. However, this was partially mitigated by a 1.9% rise in average checks.
During the first quarter, digital sales contributed 35.4% to total food and beverage revenues.
Chipotle’s Restaurant Openings
Strength in new restaurant openings aided the company’s performance in the first quarter. In the reported quarter, Chipotle opened 57 new restaurants in 48 locations, including a Chipotlane. It also opened two internationally licensed restaurants.
CMG’s Costs, Operating Highlights & Net Income
In the first quarter of 2025, food, beverage and packaging costs, as a percentage of revenues, came in at 29.2%, compared with 28.8% reported in the prior-year quarter. The rise in costs was driven by inflationary costs across avocados, dairy and chicken. Additionally, a shift in protein mix, from limited-time offerings, contributed to the cost uptick. This was partly offset by the positive impact of menu price hikes. We expected the metric to be 29.7%.
In the quarter under discussion, the restaurant-level operating margin reached 26.2%, down from 27.5% reported in the prior-year period. We predicted the metric to be 26.3%.
Adjusted net income in the reported quarter amounted to $396.8 million, up 7.5% year over year. Our estimate for the metric was $387.6 million.
Balance Sheet of Chipotle
As of March 31, 2025, the company reported cash and cash equivalents of $725.6 million compared with $748.5 million as of Dec. 31, 2024.
As of March 31, 2025, inventory totaled $41.4 million compared with $48.9 million as of Dec. 31, 2024. Goodwill (as a percentage of total assets) reached 0.24% at the end of the first quarter of 2025.
CMG’s 2025 Outlook
For 2025, the management anticipates comps growth in the low-single-digit range. It expects to open between 315 and 345 new company-operated restaurants in 2025, with more than 80% featuring a Chipotlane. It expects a tax rate in the range of 25-27% in 2025.
CMG’s Zacks Rank & Key Picks
Chipotle currently has a Zacks Rank #3 (Hold).
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
