Market Overview

Chipotle Cites Avocado Pricing Pressure In Q4; Unlikely That's Going Away Anytime Soon

Share:
Chipotle Cites Avocado Pricing Pressure In Q4; Unlikely That's Going Away Anytime Soon

Chipotle Mexican Grill, Inc. (NYSE: CMG) reported its Q4 2016 results in-line with the company’s pre-announcement and the consensus, with same-store sales of -4.8 percent and EPS of $0.55.

Stephens’ Will Slabaugh maintained an Underweight rating on the company, with a price target of $325.

Q4 Results

Chipotle Mexican Grill’s EPS declined 75 percent year on year during Q4, driven by sales deleveraging, increased marketing spend, structural cost changes and possible higher produce prices.

“Although the comp improved as CMG lapped the food-safety scare, we remain concerned with heightened sales and profit recovery expectations in future quarters,” Slabaugh stated.

Guidance

As part of its result release, the company emphasized that its focus during FY2017 would remain on simplifying and improving restaurant operating, utilizing creative marketing to rebuild the brand and further rolling out its digital sales efforts.

“The release also noted that avocados and pre-diced tomatoes were the primary source of COGS pressure, which we do not expect to ease in the near term,” the analyst noted.

However, Chipotle did not include its previous EPS guidance of $10 as part of the release, while the same-store sales guidance was for high single digit growth in FY2017.

Latest Ratings for CMG

DateFirmActionFromTo
Nov 2020BarclaysInitiates Coverage OnOverweight
Oct 2020Deutsche BankMaintainsHold
Oct 2020Wells FargoMaintainsOverweight

View More Analyst Ratings for CMG
View the Latest Analyst Ratings

 

Related Articles (CMG)

View Comments and Join the Discussion!

Posted-In: AvocadosAnalyst Color Short Ideas Reiteration Restaurants Analyst Ratings Trading Ideas General Best of Benzinga

Latest Ratings

StockFirmActionPT
OCXBTIGInitiates Coverage On5.0
GCMGWilliam BlairInitiates Coverage On
PDCraig-HallumInitiates Coverage On41.0
CAPLWells FargoDowngrades
MMPWells FargoDowngrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com