Chipotle (NYSE:CMG) is a California-based company that owns and operates Chipotle Mexican Grill restaurants. The fast casual chain was founded by Steve Ellis in 1993. Since then, it has grown into a behemoth with over 2,000 locations worldwide. It services customers in North America, Europe, and the Middle East.
Shares of Chipotle were down sharply in after-hours trading following the release of its third quarter (Q3) fiscal 2024 earnings. Its results were unveiled after the market close, applying downward pressure on its stock.
In Q3 FY2024, Chipotle reported total revenues of $2.8 billion – up 13% compared to the previous year. Meanwhile, comparable restaurant sales delivered 6.0% growth. However, its restaurant level operating margin was 25.5% – down from 26.3% in the previous year. Adjusted diluted earnings per share (EPS) was reported at $0.27 – up 17.4% compared to the $0.23 adjusted EPS it posted in the prior year.
Looking ahead, Chipotle management is projecting full year comparable restaurant sales growth in the mid to high-single digit range. Moreover, it anticipates 285 to 315 new company-operated restaurant openings. Over 80% of those openings will have a Chipotlane. The company is also projecting an underlying effective full tax year rate between 24% and 26% before discrete items.
Shares of Chipotle have climbed over 20% in the year-to-date period as of close on Tuesday, October 29, 2024. Despite the disappointing quarter, Chipotle is still on track for strong earnings growth going forward.