Analysts’ EPS expectation
For 2019, analysts are forecasting Chipotle Mexican Grill (CMG) to post adjusted EPS of $12.25, which represents a rise of 35.2% from $9.06 in 2018. The revenue growth, expansion of the EBIT (earnings before interest and tax) margin, and lower effective tax rate are likely to drive Chipotle’s EPS growth in 2019.
Analysts expect Chipotle to post revenue of $5.29 billion in 2019, which represents a rise of 8.8% from $4.9 billion in 2018. The revenue growth is expected to be driven by the addition of new restaurants and positive SSSG (same-store sales growth). The company’s management expects to open 140–155 new restaurants in 2019, while they are expecting the company’s SSSG to be in the mid-single-digit range.
Chipotle is focusing on digitization and modernization of its restaurants, various marketing and promotional initiatives, improvement in delivery service, and menu innovation to enhance the customer experience.
Analysts expect Chipotle’s EBIT margin to improve from 7.2% to 8.7%. The increased menu prices, sales leverage from positive SSSG, improved efficiency from strategic reviewing of the sourcing of its ingredients, and lower other operating costs are likely to expand Chipotle’s EBIT margin. In 2019, Chipotle’s effective tax rate is expected to be at 28.0% compared to 29.4% in 2018.
Next, we’ll look at analysts’ expectations from Shake Shack (SHAK) in 2019.