This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Chipotle's Growth Remains Envy of Restaurant Stocks

Stocks in this article: CMG

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( Trefis) -- Chipotle (CMG) continued with its growth momentum delivering strong first-quarter results on Thursday. Net revenues for the quarter ending March 31 stood at $640.8 million, an increase of 25.8% over the same quarter previous year while net income surged 35.1% y-o-y to $62.7 million.

Chipotle competes mostly with quick service and casual dining restaurants such as Chili's, McDonald's (MCD), Burger King, Yum! Brands (YUM) and Papa John's, among others.

See our complete analysis for CMG stock here.

The operating margins increased by 220 basis points as the company benefited from lower fixed costs such as labor and occupancy costs, as a percentage of revenue, primarily because of a 12.7% increase in comparable restaurant sales (or comp sales). Strong comp sales led to higher revenues, causing the percentage of fixed costs to decline resulting in higher profitability. However, the decrease in fixed costs were partially offset by rising food, beverage and packaging costs, which now constitute 32.2% of the total costs, up 0.2% over previous year. Chipotle expects food inflation of mid-single digits for 2012.

For the full year, we expect adjusted EBITDA to witness a slight decline as the lower fixed costs will be more than negatively offset by the rising food costs. Moreover, comp sales growth for this quarter was helped by increases in menu prices implemented in 2011 and, therefore, we might not see such strong numbers for the subsequent quarters. The company itself expects the number to be in mid-single digits for the full year.

Chipotle also reaffirmed its full-year guidance to open 155 to 165 new restaurants in 2012. For this quarter, the company added 32 new restaurants including one in Toronto, Canada. The total number of restaurants now stands at 1,262.

We have a $428 price estimate for Chipotle, which is slightly below the current market price. We are in the process of revising our estimates to incorporate Q1 earnings.

Click here to find out how a company's products impact its stock price at Trefis

Like our charts? Embed them in your own posts using the Trefis Wordpress Plugin.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs