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How Much Revenue Growth Will Fast Casual Restaurants See in 2017?

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Chipotle’s 2017 revenue estimates

In 2017, analysts are expecting Chipotle Mexican Grill (CMG) to post revenue of $4.6 billion, a growth of 17.3% from $3.9 billion in 2016.

Chipotle’s revenue growth is expected to be driven by positive SSSG (same-store sales growth) and the addition of new restaurants. Chipotle’s management expects to open 195–210 new restaurants in 2017. To improve its SSSG, the company management has launched smart pickup times in all its restaurants, and has been focusing on enhancing customer experience through simplifying and redesigning its online ordering site. Also, the company has plans to launch an advertising campaign in April 2017, which has been called the largest in Chipotle’s history. With all these initiatives, the company expects its 2017 SSSG to be in the high single digits.

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Panera Bread’s revenue estimate

Analysts expect Panera Bread (PNRA) to post revenue of $3 billion in 2017, which represents a growth of 7% from the $2.8 billion reported in 2016. The revenue growth is expected to be driven by the addition of 70 to 80 new restaurants and SSSG in the range of 3.5%–4.5%. The company management expects 80% of franchised restaurants to have Panera 2.0 by the end of 2017, and also expects to launch delivery service in 35% of company-owned restaurants and 75% of franchised groups. These initiatives along with menu innovations, marketing, and promotional offers, are expected to drive the company’s SSSG in 2017.

SHAK’s revenue estimate

For 2017, Shake Shack’s (SHAK) management has set revenue guidance in the range of $349 million to $353 million. Analysts are expecting the company to post revenue of $356.5 million, which represents a growth of 32.8% from $268.5 million in 2016. The revenue growth is expected to be driven by the addition of 22 to 23 new company-owned restaurants and 11 franchised restaurants, and positive SSSG, which is expected to be in the range of 2% to 3%.

Next, we’ll look at EBIT margins of fast casual restaurants.

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