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What Drove Chipotle’s Revenue in 4Q17?

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Feb. 8 2018, Updated 5:50 p.m. ET

4Q17 performance

In 4Q17, Chipotle Mexican Grill (CMG) posted revenue of $1.11 billion, which represents growth of 7.2% from $1.04 billion in 4Q16. The company’s 4Q17 revenue was in line with analysts’ estimates. Chipotle’s revenue growth has declined over the last four quarters, with the company posting revenue growth of 28.1%, 17.1%, 8.8%, and 7.2% in 1Q17, 2Q17, 3Q17, and 4Q17, respectively.

Chipotle’s 4Q17 revenue growth was driven by the addition of new restaurants and positive SSSG (same-store sales growth) of 0.9%. By the end of 4Q17, Chipotle operated 2,408 restaurants. Compared to 4Q16, the company operated 158 more restaurants in 4Q17. In the last four quarters, the company opened 183 new restaurants and closed 25 restaurants. The addition of these new restaurants led to the growth in the company’s revenues.

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Peer comparisons

For the same period, analysts expect Shake Shack (SHAK) to post revenue growth 26.8%, while the revenue of The Cheesecake Factory (CAKE) is expected to fall 5.2%.

Outlook

For 2018, analysts expect Chipotle to post revenue of $4.84 billion, which represents growth of 8.1% from $4.48 billion in 2017. The revenue growth is expected to be driven by positive SSSG and the addition of new stores. The company’s management has set the SSSG guidance to be at low single digits for 2018 and is expecting to open 130 to 150 new restaurants in 2018.

Next, we’ll look at Chipotle’s 4Q17 SSSG.

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