Chipotle Mexican Grill(US:CMG) ZACKS·2025-04-21 13:35Core Viewpoint - Chipotle Mexican Grill, Inc. is set to report its first-quarter 2025 results, with expectations of earnings and revenue growth despite potential headwinds from rising costs and weather disruptions [1][16]. Earnings Performance - In the last reported quarter, Chipotle's earnings exceeded the Zacks Consensus Estimate by 4.2%, maintaining a strong record of surpassing earnings expectations with an average surprise of 9.2% over the last four quarters [1][2]. - The Zacks Consensus Estimate for first-quarter earnings is 28 cents per share, reflecting a 3.7% increase from the previous year's 27 cents [6]. Revenue Expectations - The consensus estimate for quarterly revenues is $2.93 billion, indicating an 8.5% increase from the same quarter last year [3]. Factors Influencing Performance - Chipotle's performance is expected to benefit from strong digitalization, expansion efforts, and the introduction of new menu items like Chipotle Honey Chicken [6]. - Digital orders account for over a third of sales, with enhancements in mobile app functionality and drive-thru services contributing to increased average check sizes and operational efficiency [7][8]. Cost and Margin Analysis - Food, beverage, and packaging costs are projected to rise by 11.5% to $869 million, while labor costs are expected to increase by 9.7% to $723.5 million [10]. - The predicted restaurant-level margin for the first quarter is 26.3%, down from 27.5% in the previous year [10]. Stock Performance and Valuation - Chipotle's shares have declined by 16.5% over the past year, underperforming the Zacks Retail – Restaurants industry, which grew by 0.8% [11]. - The company's stock is trading at a forward 12-month price-to-sales ratio of 5.02X, which is above the industry average [15]. Conclusion - The upcoming earnings report is expected to present both opportunities and challenges for investors, with growth initiatives being countered by rising costs and weather-related issues [16][17].