Can Chipotle Mexican Grill Bounce Back in 3Q17?
American fast casual restaurant Chipotle Mexican Grill (CMG) is scheduled to announce its 3Q17 earnings after the market closes on October 24, 2017. As of October 11, 2017, Chipotle was trading at $311.49, which represents a fall of 10.7% since the announcement of its 2Q17 earnings on July 25, 2017.
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In 2Q17, Chipotle posted adjusted EPS (earnings per share) of $2.32 and revenues of $1.17 billion. Analysts had forecast that the company would have EPS of $2.18 on revenues of $1.19 billion. Chipotle’s 2Q17 SSSG (same-store sales growth) of 8.1% failed to meet analysts’ estimate of 9.7%. The lower-than-expected 2Q17 SSSG and the reports of food safety issues from July 14–17, 2017, at its restaurant in Sterling, Virginia, appear to have made investors skeptical of the company’s future earnings. That led to a fall in CMG stock.
Year-to-date stock performance
It’s been a tough year for Chipotle so far in 2017. It continues to struggle to recover from its food safety issues. Since the beginning of 2017, the stock has fallen 17.5%. In the same period, peers Shake Shack (SHAK) and The Cheesecake Factory (CAKE) have fallen 6.8% and 29.4%, respectively.
The broader comparative indexes, the S&P 500 Index (SPX-INDEX) and the iShares US Consumer Services (IYC), have risen 14.1% and 9.7%, respectively, year-to-date.
In this series, we’ll look at analysts’ revenue and EPS (earnings per share) estimates for 3Q17. We’ll also look at management’s 2017 guidance and analysts’ estimates for the next four quarters. We’ll wrap up the series by looking at Chipotle’s valuation multiple and analysts’ recommendations.
Let’s start by looking at analysts’ revenue estimates for 3Q17.