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Factors Setting the Tone for Chipotle's (CMG) Q2 Earnings

Chipotle Mexican Grill, Inc. CMG is scheduled to report second-quarter 2020 results on Jul 22, after market close. In the last reported quarter, the company delivered an earnings surprise of 23.2%. Further, the company has a trailing four-quarter earnings surprise of 13.8%, on average.

Q2 Estimates

The Zacks Consensus Estimate for second-quarter earnings is pegged at 22 cents, indicating a decline of 94.5% from $3.99 reported in the year-ago quarter. For quarterly revenues, the consensus mark stands at $1,308 million, suggesting a decrease of 8.8% from the prior-year reported figure.

Factors to Note

Chipotle’s second-quarter results are likely to reflect impact of the coronavirus pandemic. The restaurant industry has been bearing the brunt of traffic weakness for a while now. The pandemic might have dented traffic and sales in the to-be-reported quarter. Moreover, comparable restaurant sales are also likely to be down in the second quarter owing to the pandemic.

However, the company has been shifting its strategy from giveaways, discounts and rewards to new menu items, operational excellence, enhancement of guest experience, technology-driven convenience and aggressive brand marketing. These sales-building efforts are likely to get reflected in the to-be-reported quarter’s results. The company has been increasing its focus on digital and delivery services owing to the shutting down of the dine-in facility in the wake of the virus outbreak.

Chipotle Mexican Grill, Inc. Price and EPS Surprise

Chipotle Mexican Grill, Inc. Price and EPS Surprise

Chipotle Mexican Grill, Inc. price-eps-surprise | Chipotle Mexican Grill, Inc. Quote

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Chipotle this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Chipotle has a Zacks Rank #2 and an Earnings ESP of +423.64%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Poised to Beat Earnings Estimates

Here are some other stocks from the Zacks Restaurant space that investors may consider as our model shows that these too have the right combination of elements to post an earnings beat this quarter:

The Cheesecake Factory Incorporated CAKE currently has a Zacks Rank #3 and an Earnings ESP of +50.50%.

Brinker International, Inc. EAT has a Zacks Rank #3 and an Earnings ESP of +19.81%.

Starbucks Corporation SBUX has a Zacks Rank #3 and an Earnings ESP of +3.04%.

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