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Mexican fast-food chain Chipotle (NYSE:CMG) beat analysts' expectations in Q2 CY2024, with revenue up 18.2% year on year to $2.97 billion. It made a non-GAAP profit of $0.34 per share, improving from its profit of $0.25 per share in the same quarter last year.
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Chipotle (CMG) Q2 CY2024 Highlights:
- Revenue: $2.97 billion vs analyst estimates of $2.94 billion (1.1% beat)
- Operating profit: $586.1 million vs analyst estimates of $566.9 million (3.4% beat)
- EPS (non-GAAP): $0.34 vs analyst estimates of $0.32 (7% beat)
- Gross Margin (GAAP): 41.8%, up from 41.4% in the same quarter last year
- Free Cash Flow of $422.1 million, similar to the previous quarter
- Same-Store Sales rose 11.1% year on year (7.4% in the same quarter last year) (beat vs. expectations of 9.1%)
- Market Capitalization: $72.17 billion
Born from a desire to offer quick meals with fresh, flavorful ingredients, Chipotle (NYSE:CMG) is a fast-food chain known for its healthy, Mexican-inspired cuisine and customizable dishes.
Modern Fast FoodModern fast food is a relatively newer category representing a middle ground between traditional fast food and sit-down restaurants. These establishments feature an expanded menu selection priced above traditional fast food options, often incorporating fresher and cleaner ingredients to serve customers prioritizing quality. These eateries are capitalizing on the perception that your drive-through burger and fries joint is detrimental to your health because of inferior ingredients.
Sales GrowthChipotle is one of the most widely recognized restaurant chains in the world and benefits from brand equity, giving it customer loyalty and more influence over purchasing decisions.
As you can see below, the company's annualized revenue growth rate of 15.5% over the last five years was impressive as it added more dining locations and increased sales at existing, established restaurants.
This quarter, Chipotle reported robust year-on-year revenue growth of 18.2%, and its $2.97 billion in revenue exceeded Wall Street's estimates by 1.1%. Looking ahead, Wall Street expects sales to grow 13.7% over the next 12 months, a deceleration from this quarter.
Same-Store SalesSame-store sales growth is a key performance indicator used to measure organic growth and demand for restaurants.
Chipotle's demand within its existing restaurants has generally risen over the last two years but lagged behind the broader sector. On average, the company's same-store sales have grown by 7.9% year on year. With positive same-store sales growth amid an increasing number of restaurants, Chipotle is reaching more diners and growing sales.
In the latest quarter, Chipotle's same-store sales rose 11.1% year on year. This growth was an acceleration from the 7.4% year-on-year increase it posted 12 months ago, which is always an encouraging sign.
Key Takeaways from Chipotle's Q2 Results We were impressed by Chipotle's same-store sales beat vs. expectations this quarter, which drove revenue outperformance. Operating profit was also ahead, showing that the growth was better and it was more efficient growth than expected as well. Zooming out, we think this was a great quarter that shareholders will appreciate. The stock traded up 2.1% to $52.89 immediately after reporting.
