Analyst Examines Chipotle (CMG), Stabucks Lackluster Earnings on CNBC

Guggenheim Services director Matthew DiFrsico joined CNBC''s 'Squawk Box' Friday morning to comment on both Starbucks (SBUX) and Chipotle (CMG) earnings.
By Giovanni Bruno ,

NEW YORK (TheStreet) --Chipotle Mexican Grill (CMG) - Get Report  and Starbucks (SBUX) both reported disappointing earnings after Thursday's closing bell. Starbucks posted third-quarter earnings of 49 cents per share, which did meet analysts' expectations, but the company posted revenue of $5.24 billion below estimates of $5.33 billion.

Chipotle posted earnings of 87 cents per share, below estimates of 93 cents per share, and revenue of $988 million, below the projected $1.05 billion.

Guggenheim Services director Matthew DiFrsico joined CNBC''s "Squawk Box" on Friday to breakdown both company's reports, beginning with Starbucks.

"They slowed, they went down to 4% from what expectations were, 6%, but Howard Schultz came out right away and calmed fears," DiFrisco said.

Moreover, this was first time Starbucks fell below 5% growth for a quarter in 25 consecutive quarters. Difrisco attributes that to the company's timing with promotions, as well as the slowed European markets in light of the recent attacks saying, "people are not as willing to congregate at a Starbucks."

In terms of Chipotle, DiFrisco remains surprised at how long the company's recovery process, from its recent E. Coli crisis, is taking.

"They are swinging for the fences with this discount program, that they said it would never do," DiFrisco said.

The results have been less than impressive since the program was rolled out in July, moreover he believes something else in the report is indicative of their slow recovery.

"Certainly they are growing, with 10% new store growth, but in essence they are self-cannibalizing. If your basing recovery based on per unit basis, I think it will be a very long time," DiFrsco noted.

Moreover, DiFrisco told CNBC that the competition in terms of the "good for you" food model is heightening, which he believes will continue to pull customers away.

Shares of Starbucks are lower by 0.10% to $57.54, and shares of Chipotle are higher by 1.52% to $424.56 on Friday morning. 

Separately, TheStreet Ratings rates Chipotle as a "Hold" with a ratings score of "C."

TheStreet Ratings rates Starbucks as a "Buy" with a ratings score of "B." 

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