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Chipotle: Analysts’ Revenue Expectations in the Next 4 Quarters

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Updated

Revenue estimates

For the next four quarters, analysts expect Chipotle Mexican Grill (CMG) to post revenues of $4.80 billion—growth of 11.3% from $4.31 billion in the same four quarters the previous year. Before the new food safety issues at Sterling, Virginia, analysts forecast revenue of $4.91 billion—2.4% higher than the current estimates.

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Revenue growth

Chipotle’s revenue growth is expected to be driven by the addition of new stores and positive SSSG (same-store sales growth). For 2017, the company’s management expects its SSSG to be in the high single-digits. Chipotle is also expected to add 106–121 new restaurants in the next two quarters.

Chipotle’s SSSG is expected to be driven by menu innovations, implementation of technological advancements, and marketing and promotional initiatives. The company has opened NEXT Kitchen in New York City, which will test the impact of potential new menu items on the restaurants’ operations. After evaluating the new menu at NEXT Kitchen, the company will expand the items to other restaurants. Currently, NEXT Kitchen is serving queso, new salad greens, frozen margaritas, and bunuelos. After successfully testing the queso, the company rolled out the menu item at more than 350 restaurants in Central and Southern California and Colorado on August 1, 2017.

To enhance customers’ experience, Chipotle plans to launch a new mobile app this year. The app includes payment with a mobile wallet, rapid order and reorder, and integrated digital offers. The company has implemented a new tech-enabled second make-line in 25 restaurants and plans to expand it to 100 restaurants by the end of this year. These initiatives, along with the expansion of delivery sales, are expected to drive Chipotle’s online sales.

Peer comparisons

For the next four quarters, analysts expect Shake Shack (SHAK) and The Cheesecake Factory (CAKE) to post revenue growth of 25.2% and 1.4%, respectively.

Next, we’ll look at analysts’ EPS estimates for the next four quarters.

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