CMG 30 dollar pop after hours pop the stock is moving fast above 500 dollar level
Chipotle Mexican Grill Earnings Preview (472.16 +3.37)
Chipotle (CMG) is set to report Q1 earnings after the close today (last quarter the co reported at 16:05). The co will host a conference call to discuss later at 16:30. Current Cap IQ Consensus estimates Q1 EPS of $1.29 (vs. -$0.88 Q1 last year) on revs of $1.05 bln (+20% Y/Y).
• This is the first, full quarter of the first, full year lapping the easy compares caused by the E. Coli scandal
• Last quarter, the co reported earnings and revs in-line w/ its January 10 preannouncement.
o Importantly, the co announced prelim January comps were +24%.
o The co also reaffirmed 2017 guidance for comps increase of high-single digits and 195-210 new restaurants openings
o After initially gapping up ~2.5%, shares sold off and ended the day down ~4.5% at 404.
• On March 20, shares reached their lowest price during the quarter at 394.19. In the month since, CMG has rallied more than 20%.
• Short interest has reached its lowest level since June 30, 2017, but short interest still remains high as ~16% of the shares outstanding are short as of March 31.
• Notably, two acquisitions of Popeyes (PLKI) and Panera (PNRA) have been positive catalysts for the restaurant industry as many peers such as BJRI, DRI, RRGB, and WING have been in uptrends over the last month as well.
Comps is the big number to pay attention to as investors want to know how far along in its recovery process CMG is.
• Current estimates are for Q1 comps to come in around 15.5% and for Q2 comps of 9% (co most likely will provide a month to date comp for April rather than guiding for Q2 comps)
Timeline of CMG’s comps over the last year
• 4Q15 comps: -14.6% including -16% in November, and -30% in December
• January 2016: -36.4% (when the E. Coli scandal was at its peak)
• February 2016: -26.1% (added an estimated 2.6% due to leap day)
• 1Q16 comps: -29.7%, including a comp of -26% for March
• 2Q16 Comps: -23.6%
• 3Q16 comps: -21.9%
• 4Q16 Comps: -4.8% including -20% in October, -1.4% in November, +14.7% in December
• January 2017 prelim comps: +24.6%
• On April 17, CNBC reported the co bumped its burrito prices up about 5% in select locations on April 11. This is the first price hike in over 3 years as the increased prices affected about 440 or 20% of the co’s 2200 locations.