Core Insights - Chipotle Mexican Grill is facing challenges with comparable-store sales declining for the third time in four quarters, with a 2.5% drop in Q4 despite a slight increase in average check size [3][4] - The stock has shown resilience, recovering from a 38% decline in 2025, suggesting it may have reached a bottom [1][8] Financial Performance - In Q4, Chipotle's revenue increased by 4.9% to $2.98 billion, with adjusted earnings per share (EPS) remaining flat at $0.25, slightly above analysts' expectations of $0.24 [3] - The restaurant-level operating margin decreased by 140 basis points to 24.5%, indicating profitability pressures, which are expected to continue into 2026 [4] Growth Strategy - Chipotle opened 334 company-owned restaurants in 2025, with plans to open 350 to 370 in 2026, including 10 to 15 international locations [6] - The company aims to increase average unit volumes from $3.1 million to $4 million and achieve a 30% restaurant-level operating margin in the long term [4] Future Outlook - The company forecasts flat same-store sales for 2026, adopting a conservative approach due to economic uncertainties, while also focusing on menu innovation and customer engagement through a relaunch of its rewards program [7] - Despite the challenges, Chipotle's stock is trading at a forward price-to-earnings (P/E) multiple of over 32 times based on 2026 estimates, leading to a cautious stance on investment opportunities in the consumer discretionary sector [8]

Core Viewpoint - Starbucks is set to provide a long-term financial forecast and details on achieving its targets during an investor presentation, following a suspension of its outlook in October 2024, which projected global same-store sales growth of at least 5%, revenue growth of at least 10%, and earnings per share growth of at least 15% [1] Group 1: Financial Performance - Starbucks shares have decreased approximately 5% over the past year, resulting in a market value of around $108 billion, amid concerns over consumer spending and rising coffee prices [2] - The company reported a same-store sales growth of 4% for the first time in two years, driven by increased customer traffic [3] - For fiscal 2026, Starbucks anticipates adjusted earnings per share between $2.15 and $2.40, with same-store sales growth of at least 3% globally and in the U.S. [5] Group 2: Strategic Initiatives - Menu innovations, such as protein cold foam, have attracted both loyal and infrequent customers, with further innovations and enhancements to the rewards program and digital experience planned [4] - Under CEO Brian Niccol's leadership, Starbucks is focusing on improving customer and employee experiences, including returning seating to cafes and requiring baristas to write messages on cups, despite these changes impacting short-term earnings [6] - Investments in restaurant improvements and labor have affected profits during the fiscal first quarter, leading to earnings per share that fell short of Wall Street estimates [4]

Brinker International (NYSE:EAT) Q2 2026 Earnings call January 28, 2026 10:00 AM ET Company ParticipantsChris O'Cull - Managing DirectorDavid Palmer - Senior Managing DirectorDennis Geiger - Executive DirectorKevin Hochman - CEO and PresidentKim Sanders - Head of Investor RelationsMika Ware - CFOConference Call ParticipantsAndrew Strelzik - Senior AnalystBrian Harbour - Equity Research AnalystBrian Vaccaro - Equity Research AnalystChristine Cho - VP and Equity Research AnalystEric Gonzalez - Senior Research ...

Financial Data and Key Metrics Changes - For Q2 FY 2026, Brinker reported total revenues of $1.45 billion, an increase of 7% over the prior year, with consolidated comp sales of +7.5% [18] - Adjusted diluted EPS for the quarter was $2.87, up from $2.80 last year [18] - Restaurant operating margin was 18.8%, compared to 19.1% in the prior year, a decrease of 30 basis points year over year [19] - Adjusted EBITDA was approximately $223.5 million, a 3.6% increase from the prior year [21] Business Line Data and Key Metrics Changes - Chili's same-store sales were at +8.6%, outpacing the casual dining industry by 680 basis points, with a 2-year cumulative comp of 43% [4] - Maggiano's reported comp sales for the quarter of -2.4%, but there were signs of sequential improvement [19][13] - Chili's top-line sales growth was driven by a price increase of 4.4%, positive traffic of 2.7%, and a positive mix of 1.5% [18] Market Data and Key Metrics Changes - Chili's was the number one traffic brand in casual dining for the entire 2025 year [12] - The company captured value leadership in casual dining and the broader restaurant industry over the past three years [11] Company Strategy and Development Direction - The company plans to continue focusing on improving food, service, and atmosphere, with a strong emphasis on marketing and brand building [5] - A reimage program for Chili's has started, with plans to complete 60-80 reimages in fiscal 2027 and fully roll out the program in fiscal 2028 [22][88] - The company aims to maintain a disciplined capital allocation strategy, allowing for investments in restaurants and returning excess cash to shareholders [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving their fifth consecutive year of same-store sales growth and second consecutive year of traffic gains [17] - The company anticipates mid-single-digit comps for the back half of the year, despite potential pressure from recent weather events [36] - Management noted that the macroeconomic environment remains mixed, but they are focused on controllable factors like food service and atmosphere to drive guest traffic [66] Other Important Information - The company repurchased an additional $100 million of common stock under its share repurchase program [23] - Capital expenditures for the quarter were approximately $63.7 million, driven by capital maintenance spend [21] - The company expects to face commodity inflation in the low single digits for the fiscal year, with some pressures anticipated in the back half [26] Q&A Session Summary Question: What contributed to the strong traffic and sales growth in the quarter? - Management highlighted stable pricing and positive performance from the Margarita of the Month and other menu items, with no significant changes in guest frequency [30][32] Question: What are the expectations for the back half of the year regarding top-line performance? - Management expects solid mid-single-digit comps for the back half, with potential traffic pressure due to recent weather events [36][42] Question: Can you elaborate on the remodels and their expected impact? - Management confirmed plans for 60-80 remodels in 2027, with a focus on operational learning and cost-effective improvements [88][92] Question: How does the company plan to manage pricing power with the $10.99 price point? - Management emphasized the importance of a barbell strategy to maintain a diverse menu and prevent over-reliance on lower price points [44][46] Question: What is the outlook for commodity costs and their impact on margins? - Management reiterated that while tariffs have provided some favorability, mid-single-digit inflation is expected in the back half of the year [99]

Core Insights - Chipotle Mexican Grill is reintroducing Chicken al Pastor to its menu across the U.S., Canada, the UK, France, and Germany starting February 10, 2026, as part of its accelerated menu innovation strategy for the year [1][2][8] Menu Innovation - The return of Chicken al Pastor marks the first limited-time offering (LTO) for Chipotle in 2026, with plans for three to four additional protein offerings, alongside new sides and dips throughout the year [1][8] - Chipotle's previous strategy of introducing two limited-time proteins per year has significantly increased transaction frequency among both new and existing customers [6] Customer Engagement - The reintroduction of Chicken al Pastor is a response to overwhelming customer demand, with social media requests for its return being more than double that of any other limited-time offering in the brand's history [4] - Chipotle Rewards members will have exclusive access to order Chicken al Pastor on February 9, 2026, one day before it becomes available to the general public [5][8] Product Details - Chicken al Pastor features a unique flavor profile, made with freshly grilled chicken, a marinade of seared morita peppers and ground achiote, complemented by pineapple, lime, and cilantro [3][7] - The Chicken al Pastor burrito is highlighted for its nutritional value, containing 54 grams of protein and 22 grams of fiber [7] Promotional Offers - To celebrate the return of Chicken al Pastor, Chipotle is offering a $0 delivery fee on orders that include this item from February 14 to February 28, 2026 [8][10]

Financial Data and Key Metrics Changes - The company has achieved notable margin improvements, with restaurant-level margins approaching 18% after being back in the 17% range [4][24] - The company plans to finish 2025 in the high 17% range, with long-term targets of 18%-20% store-level margins [24][25] Business Line Data and Key Metrics Changes - The company has refreshed its menu with new items such as burritos, burrito bowls, and salads, while also focusing on chicken on the bone [4][11] - New unit growth has been initiated, with 10 new units planned for the year, marking a return to growth after years of low or no growth [4][35] Market Data and Key Metrics Changes - The company operates predominantly on the West Coast, where the consumer environment has been challenging, but it is positioned at the intersection of quick service and fast casual, offering affordability without compromising quality [7][8] - The loyalty program has seen growth, with users visiting 6% more frequently due to targeted discounts [9][17] Company Strategy and Development Direction - The company is focused on a brand turnaround through marketing campaigns like "Let's Get Loco," which emphasizes fresh ingredients and quality [3][4] - The strategy includes expanding into new markets outside California, with a mix of existing and new franchise partners, and leveraging second-generation sites for new openings [27][35] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenging macro environment but believes the company is well-positioned to navigate it due to its value proposition [6][7] - The company is excited about upcoming menu innovations, including chicken tenders and new beverages, which are expected to drive sales [11][12][13] Other Important Information - The company has implemented operational improvements, including a new labor scheduling system and in-store ordering kiosks, to enhance efficiency [20][21] - The company plans to use free cash flow for new store development and remodel existing locations, which have shown sales uplift [38][39] Q&A Session Summary Question: What has been accomplished in the brand turnaround? - The company has launched the "Let's Get Loco" campaign, refreshed its menu, and improved its business model and margins [3][4] Question: How is the company positioned in the current macro environment? - The company feels well-positioned despite challenges, focusing on affordability and value [7][8] Question: What are the main drivers of margin improvements? - Margin improvements have been driven by evaluating supply chain costs, transitioning distributors, and implementing technology for labor efficiency [20][21] Question: What are the long-term targets for margins? - The company aims for 18%-20% store-level margins, with a focus on sales-driving initiatives to achieve this [24][25] Question: How will the company use its free cash flow? - The company plans to use cash for new store development, remodels, and equipment to drive efficiencies [38][39]

Financial Data and Key Metrics Changes - The company experienced a slow start in Q1 2025 but gained momentum throughout the year, achieving nearly 5% comparable sales growth in Q3 with over 2% traffic growth [3][4] - Despite challenges in December due to weather, the company still delivered positive comparable sales and traffic in Q4 [4] - The company increased its margins while improving guest and team member experiences, indicating a strong operational foundation for future growth [4][5] Business Line Data and Key Metrics Changes - The average build cost for new locations decreased from approximately $2.4 million two years ago to under $2 million this year, without compromising quality [5][6] - The international business grew at a rate consistent with revenue growth in North America, highlighting effective global partnerships [6] Market Data and Key Metrics Changes - The company is focusing on targeted digital media marketing, which has shown positive results, including a 50% increase in app downloads [10] - Digital sales remained strong even during adverse weather conditions that affected in-shack sales, indicating robust brand demand [10] Company Strategy and Development Direction - The company aims to be competitive in the traffic share game within the industry, focusing on operational excellence and marketing effectiveness [5] - There is a commitment to reducing build costs while maintaining quality, which is expected to enhance cash-on-cash returns [5][6] - The company is exploring new kitchen equipment and processes to improve throughput and maintain quality, with potential innovations expected in late 2026 [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving additional restaurant-level margin expansion in 2026, driven by supply chain improvements and operational efficiencies [23][29] - The company anticipates continued elevated pricing on beef but expects some deflation in other input costs, allowing for margin improvements [29][30] Other Important Information - The company has successfully improved labor deployment, achieving over 90% labor attainment, which has positively impacted guest satisfaction metrics [16][17] - The company is diversifying its supply chain to mitigate risks associated with single sourcing, which is expected to enhance productivity and reduce costs [20][21] Q&A Session Summary Question: What are the key wins for 2025 and outlook for 2026? - Management highlighted the operational improvements and marketing strategies that have laid a strong foundation for growth moving into 2026 [3][4] Question: How is the company addressing marketing investments? - The company is focusing on targeted digital media and strategic promotions to drive app traffic and sales, with a significant increase in app downloads [10] Question: What changes have been made in labor deployment? - The company has improved labor attainment significantly, leading to better guest satisfaction and operational efficiency [16][17] Question: How is the supply chain being optimized? - Management emphasized the importance of quality and consistency in supply chain decisions, with a focus on diversifying suppliers to enhance competition and reduce costs [20][21] Question: What is the outlook for commodity inflation? - The company expects continued elevated beef prices but anticipates deflation in other input costs, supporting margin expansion [29][30]

Core Insights - Chipotle Mexican Grill, Inc. (CMG) shares have increased by 15.5% over the past month, outperforming the Zacks Retail-Restaurant industry's growth of 3.6% and the S&P 500's rise of 1.3% [1] Group 1: Investor Sentiment and Operational Focus - The recent share price increase reflects a shift in investor sentiment after a period of decline, driven by a focus on operational discipline, including improvements in restaurant throughput and labor productivity [2][9] - Chipotle's value positioning, with pricing below peers and consistent portion sizes, supports customer retention in a value-conscious market [2] Group 2: Stock Performance and Technical Indicators - CMG stock has risen 15.9% in a month, outperforming both the restaurant industry and the broader market, supported by operational discipline, menu innovation, and digital engagement [7] - The stock is currently trading above its 50-day moving average, indicating a bullish trend [4] Group 3: Growth Strategies - Chipotle's expansion strategy includes new restaurant openings and the Chipotlane format, which enhances convenience and throughput, while also advancing international expansion into Europe, the Middle East, and Asia [11] - Menu innovation and digital engagement are crucial for sustaining customer interest, particularly among younger consumers [10] Group 4: Challenges and Market Dynamics - The company faces challenges from macroeconomic pressures affecting consumer behavior, particularly among households earning below $100,000, which impacts dining frequency [12] - Rising food costs and inflation are expected to intensify, with management prioritizing value perception over margin protection, which may pressure restaurant-level margins [14] Group 5: Valuation Insights - The Zacks Consensus Estimate for Chipotle's 2026 earnings per share (EPS) remains at $1.22, while industry peers have seen slight increases in their EPS estimates [15] - Chipotle's stock is trading at a forward 12-month price-to-earnings (P/E) multiple of 31.88, above the industry average of 23.98, indicating an attractive investment opportunity despite elevated valuation [17] Group 6: Overall Assessment - The recent rebound in share price reflects improved confidence in Chipotle's execution-focused strategy, but near-term earnings visibility is constrained due to softer transaction trends and rising costs [20] - The risk-reward profile suggests a more cautious approach, with existing shareholders advised to hold and prospective buyers potentially waiting for a more favorable entry point [21]

Core Insights - SGA's U.S. Large Cap Growth Strategy experienced a return of -1.3% (Gross) and -1.4% (Net) in Q3, underperforming against the Russell 1000 Growth Index (10.5%) and the S&P 500 Index (8.1%) due to market leadership favoring lower-quality stocks and cyclical industries [1] Company Performance - Chipotle Mexican Grill, Inc. (NYSE:CMG) had a one-month return of 8.35% but saw a significant decline of 38.22% over the last 52 weeks, closing at $37.00 per share with a market capitalization of $49.613 billion on December 31, 2025 [2] - In Q3, Chipotle's comparable sales growth fell short of consensus by 1%, declining 4% against a tough 11% comparison from the previous year, indicating a challenging consumer environment [3] - Management targets low-teens revenue and mid-teens profit growth, supported by 8-10% annual unit expansion and low to mid-single-digit same-store sales growth over the next 3-5 years [3] Strategic Initiatives - Chipotle aims to expand its footprint to 7,000 restaurants in North America, with strong new unit economics supporting this growth [3] - The company is also exploring international expansion, gaining traction in Canada and Europe, and establishing partnerships in regions like the Middle East, Asia, and Latin America [3] - There are opportunities for improving comparable sales growth through new menu innovations, throughput improvements, and enhanced digital marketing initiatives [3] Financial Health - Chipotle maintains a net cash balance sheet and generates strong free cash flow, which can be utilized for store expansion plans [3] - Despite a challenging consumer spending environment, confidence remains in Chipotle's long-term trajectory, with the company adding to its position during the quarter [3]

Chipotle - Chipotle's stock has fallen 51% from its high in 2024, with negative same-store sales reported [1] - The company opened about 200 new locations, but average unit volumes have dropped by approximately 3%, which is unusual for Chipotle [2] - Chipotle has a strong financial position, earning $1.5 billion in net income over the past year and holding $1.8 billion in cash with no debt other than lease liabilities [3] - The company is investing in menu innovation and has seen success with limited-time offerings, which encourage repeat visits [5] - Approximately 40% of Chipotle's sales come from households earning under $100,000, a demographic currently facing inflationary pressures [5] - Chipotle plans to open 350-370 new restaurants in 2026 and is focusing on international expansion [5] - The stock trades at a price-to-earnings (P/E) ratio of 30, down from 70 in mid-2024, indicating a significant valuation adjustment [6][7] Target - Target's stock is down 46% over the past five years, with inconsistent same-store sales performance [10] - The stock trades at a low forward P/E ratio of around 11, but the company maintains strong fundamentals, including an A credit rating and nearly $5 billion in cash [10] - Target is facing challenges related to consumer backlash and competition from rivals like Walmart, impacting its market share [10] - A new CEO, Michael Fidelki, is set to implement a multi-year plan to reinvigorate private label brands and key discretionary categories [11] - Target aims to drive over $15 billion in revenue growth over the next five years, but significant changes are needed for this to materialize [11] - The market is skeptical about Target's growth potential, reflected in its high dividend yield of about 5% [14] Crocs - Crocs' stock is down 23% over the past year, trading at just seven times forward earnings estimates [19] - The company faced challenges after acquiring Hey Dude, leading to bloated inventory and a goodwill impairment charge [19][21] - Despite domestic sales softness, Crocs is experiencing strong double-digit growth in international markets [25] - The brand maintains strong margins and is actively managing its capital structure, including share repurchases [21] - Crocs has successfully engaged in high-profile collaborations, which have helped revitalize its brand image [23]