What Analysts Expect from Chipotle’s 2Q17 Revenues
Chipotle Mexican Grill (CMG) owns and operates 2,291 restaurants. In 2Q17, analysts expect the company to post revenues of ~$1.2 billion, which represents 19.1% growth from $998.4 million in 2Q16.
Chipotle’s 2Q17 revenues are expected to be driven by the addition of new restaurants and positive same-store sales growth (or SSSG). Compared to 2Q16, the company operated 186 more restaurants by the end of 1Q17. These restaurants, along with the addition of new restaurants in 2Q17, are expected to boost Chipotle’s 2Q17 revenues.
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To drive its sales, Chipotle is focusing on enhancing its guests’ experience, implementation of technological advancements, improvement in the execution of digital orders, menu innovations, and improvement of food quality by removing artificial ingredients.
The implementation of its Smarter Pickup Times technology, which dynamically assigns pickup times based on transaction volumes, played a major role in increasing online sales 53.5% in 1Q17. To enhance the guest experience, Chipotle is focusing on training its crew members and managers.
In 1Q17, the company announced that it has removed all artificial ingredients from its tortillas, which are currently prepared using 51 real ingredients. Moving to menu innovations, the company introduced two traditional Mexican desserts in 2Q17.
Along with these initiatives, Chipotle’s aggressive marketing and promotional offers are expected to drive the company’s 2Q17 SSSG. In April 2017, the company launched an advertising campaign called “As Real as It Gets.”
For the next four quarters, analysts are expecting Chipotle’s revenues to rise 15.1% to ~$4.8 billion. The company’s revenue growth is expected to be driven by the addition of new restaurants and positive same-store sales growth.
The company’s management stated that it expects the company’s 2017 SSSG to reach the high single digits, and it plans to add 195–210 new restaurants in 2017.
Next, we’ll look at Chipotle’s 2Q17 margins.