In the first three quarters of 2018, Chipotle Mexican Grill (CMG) posted revenues of $3.64 billion, which represents a rise of 8.1% from $3.37 billion in the same three quarters in 2017. The revenue growth was driven by positive SSSG of 3.3% and the net addition of new restaurants. During this period, the company opened 97 new restaurants and closed or relocated 42 restaurants, which brought the total restaurant count to 2,463 units—compared to 2,408 restaurants at the end of 2017.
Chipotle’s SSSG was driven by the average check size increasing 4.3%, which was partially offset by a decline of 2.1% in transactions. The increase in menu prices drove the company’s average check size during the period.
In the fourth quarter, analysts expect Chipotle to post revenues of $1.19 billion, which would take its revenues to $4.83 billion in 2018—7.9% growth from $4.48 billion in 2017.
Revenue expectations in 2019
For 2019, analysts expect Chipotle’s revenues to rise 7.9% from $4.83 billion in 2018 to $5.21 billion. The revenue growth will likely be driven by opening new restaurants and the positive SSSG. Management expects to open 140–155 new restaurants in 2019.
To drive Chipotle’s sales, the company is focusing on implementing technological advancements, innovative menu items, and various marketing and promotional initiatives.
The company plans to have digitized second make-lines in all of its restaurants by the end of 2019. Chipotle plans to have digital pickup shelves, which will serve online orders, in all of its restaurants before the middle of 2019.
Moving to Chipotle’s menu innovations, management stated that some new items are going through the new stage-gate process to build the pipeline for future years. The company is testing quesadillas, nachos, bacon, lemonade, and a Mexican chocolate milkshake, which are in various stages of its new stage-gate process.
During 2019, Shake Shack’s revenues are expected to rise 27.0%, while McDonald’s revenues are expected to fall 1.2%.
Next, we’ll discuss analysts’ EPS expectations for Chipotle in 2018 and 2019.