Chipotle Mexican Grill served up a major first-quart surprise late Tuesday after fast-food giant McDonald's comfortably topped earnings views in the morning. CMG stock leapt 14% to new all time highs Wednesday. MCD stock fell after briefly hitting a record high.
Chipotle Earnings
Newport Beach, Calif.-based Chipotle Mexican Grill clocked an earnings hot streak last year, averaging 28.75% quarterly growth and accelerating to 49% gains in Q4. Revenue growth for the fast-casual Mexican food chain wasn't quite as spectacular, averaging 14.5% growth in quarterly gains.
Results: Chipotle earnings rocketed 84% to $10.50 per share on a 17.2% revenue jump to $2.4 billion.
Expectations: Wall Street expected Chipotle to serve up a massive 57% earnings spike to $8.95 per share on 15.8% revenue growth to $2.34 billion.
Comparable restaurant sales increased 10.9%, beating FactSet estimates of 8.6% growth. In-store restaurant sales surged 22.9% while digital sales represented 39.3% of all food and beverage revenue.
Chipotle expects to open 255 to 285 new restaurants this year after opening 41 new locations in Q1. The company forecasts Q2 and full-year comparable sales growth in the mid to high-single digits.
CMG Stock
CMG stock jumped 13% to 2011.50 Wednesday after a new all-time high of 2047.31 during trading. Shares rocketed out of a buy zone for a cup base after surpassing the 1,724.81 buy point on April 7. The current buy zone extends to 1,811.05.
Chipotle's relative strength line is at 52-week highs and the stock has a 92 RS Rating. CMG stock has a near-perfect 98 EPS Rating. It has a perfect 99 Composite Rating, which combines a number of technical indicators into one easy-to-read score.
McDonald's Earnings
Results: McDonald's adjusted earnings leapt 15% to $2.63 per share. Revenue rose 4.1% to $5.89 billion, ending three quarters of year-over-year declines. GAAP earnings spiked 66% to $2.45 per share and included $180 million in restructuring charges.
Expectations: Analysts polled by FactSet expect McDonald's adjusted earnings to rise 2.2% to $2.33 per share, while revenue edged down 1.4% to $5.585 billion. Sales stalled over the past three quarters, averaging a 3% decline during that time.
Comparable sales surged 12.6% for the quarter, topping estimates of an 8.7% increase. McDonald's reported 11.8% comparable sales growth in Q1 2022 and 12.6% growth during Q4, respectively. All three of McDonald's business divisions reported 12.6% same-store sales growth for the quarter.
Traffic rose despite higher menu prices.
McDonald's Stock Action
A six-week advance has put MCD stock in a buy zone above its most recent consolidation. Shares broke out on April 3 after clearing the 281.77 buy point as shown in MarketSmith. The current buy zone, which extends 5% beyond the buy point, stretches to 295.85.
MCD stock rose to a record 295.16 early Tuesday, but reversed slightly lower, down 0.6% to 291.51. Shares edged down Wednesday to 289.77. McDonald's stock gained more than 10% so far in 2023.
