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This Chipotle Analyst Isn't Convinced About Its Pace Of Sales, Economic Recovery

Chipotle Analyst Isn't Convinced On Recovery NYSE:CMG

While appreciating management’s “willingness” to assess new strategies more aggressively in order to win back old customers and attract new ones to the brand, BTIG’s Peter Saleh expressed concern regarding the pace of sales and economic recovery at Chipotle Mexican Grill, Inc. CMG.

Saleh maintained a Neutral rating on the company.

The analyst believes there continues to be “a great deal of uncertainty regarding the timing and magnitude of many of the initiatives discussed.”

However, Saleh expressed optimism regarding the potential for television advertising and expansion in digital ordering capabilities, since both have proven their ability to boost sales at other restaurant concepts.

Q3 Results

Chipotle reported its Q3 2016 EPS at $0.56, well below the consensus and estimate, driven by lower same store sales and restaurant level margins.

Same0store sales fell 21.9 percent, missing the estimate and the consensus, while traffic decreased 15.2 percent. Comps, however, improved from 23.8 percent in July to 20.1 percent in September.


“Comps in October are down with some negative impact from Hurricane Matthew. We expect considerable improvement in Nov/Dec as the food safety incidents are lapped,” Saleh mentioned.

Chipotle guided to 2017 EPS of $10, driven by 195-210 new units, HSD comps and 20 percent restaurant margins, while acknowledging that this could prove to an optimistic target.

Oct 2016Credit SuisseDowngradesOutperformNeutral
Oct 2016RBC CapitalMaintainsOutperform
Oct 2016Raymond JamesDowngradesMarket PerformUnderperform

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