uploads///

Chipotle’s Stock Falls after Weak 4Q16 Earnings

By

Feb. 7 2017, Published 3:44 p.m. ET

4Q16 performance

Chipotle Mexican Grill (CMG), a fast-casual restaurant company based in Denver, Colorado, posted its 4Q16 earnings after the market closed on February 2, 2017. It posted adjusted EPS (earnings per share) of $0.55 on revenue of $1.0 billion.

Analysts were expecting the company to post EPS of $0.57 on revenue of $1.0 billion. Higher marketing and promotional expenditure and an increase in the cost of sales led Chipotle to post lower-than-expected 4Q16 earnings. This made investors skeptical of Chipotle’s future earnings, leading to a fall in its stock price. On February 6, 2017, Chipotle was trading at $395.60, which represents a fall of 6.5% since the announcement of 4Q16 earnings.

Article continues below advertisement

Year-to-date performance

2016 was a tough year for Chipotle, as the company struggled to overcome its food safety issues. In 2016, the company’s stock fell 15.9%. However, 2017 has started on a brighter note. Year-to-date, the company’s stock has returned 4.8%. During the same period, its peers, Panera Bread (PNRA) and Shake Shack (SHAK) have returned 5.1% and -2.6%, respectively.

The Consumer Discretionary Select Sector SPDR ETF (XLY) has returned 3.5% since the beginning of 2017. The fund has more than 9.5% of its holdings in restaurant companies.

Series overview

In this series, we’ll take a look at Chipotle’s 4Q16 earnings call and notes. We’ll also look at the company’s performance on key metrics during the quarter. We’ll cover the management’s guidance and analysts’ estimates for 2017.

Let’s start by discussing Chipotle’s revenue in 4Q16.

Advertisement

More From Market Realist

  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.