On February 4, 2025, Chipotle Mexican Grill Inc (CMG, Financial) released its 8-K filing detailing the financial results for the fourth quarter and full year ended December 31, 2024. Chipotle Mexican Grill is the largest fast-casual chain restaurant in the United States, with systemwide sales of $9.9 billion in 2023. The company operates nearly 3,440 stores, primarily in the U.S., with a small presence in Canada, the UK, France, and Germany. Chipotle's menu includes burritos, tacos, and beverages, emphasizing competitive pricing and high-quality food sourcing.
Performance Overview
Chipotle Mexican Grill Inc (CMG, Financial) reported a 13.1% increase in total revenue for the fourth quarter of 2024, reaching $2.8 billion. This growth was driven by new restaurant openings and a 5.4% increase in comparable restaurant sales, attributed to a 4.0% rise in transactions and a 1.4% increase in average check size. Despite these gains, the company's revenue fell short of the analyst estimate of $2,847.41 million. The diluted earnings per share (EPS) for the quarter was $0.24, which was below the analyst estimate of $0.25.
Financial Achievements and Challenges
For the full year 2024, Chipotle's total revenue increased by 14.6% to $11.3 billion, with comparable restaurant sales up by 7.4%. The operating margin improved to 16.9% from 15.8% in the previous year. However, the restaurant-level operating margin slightly decreased to 24.8% from 25.4% in the fourth quarter, indicating challenges in managing operational costs. The company opened 304 new restaurants in 2024, including 257 with a Chipotlane, enhancing customer convenience and sales.
Key Financial Metrics
Chipotle's food, beverage, and packaging costs rose to 30.4% of total revenue in the fourth quarter, up from 29.7% in the previous year, due to increased ingredient usage and inflation. Labor costs also increased slightly to 25.2% of total revenue. The effective income tax rate decreased to 24.4% from 26.2%, benefiting from reduced nondeductible expenses. Net income for the quarter was $331.8 million, up from $282.1 million in the same period last year.
Commentary and Analysis
Chipotle had another outstanding year, delivering strong transaction-driven comps each quarter, expanding margins, adding over 300 new restaurants, gaining momentum in key industry-leading brand metrics, making progress on many restaurant operating initiatives, and building our footprint internationally," said Scott Boatwright, CEO, Chipotle.
Chipotle's strategic focus on expanding its restaurant footprint and enhancing digital sales, which accounted for 34.4% of total food and beverage revenue in the fourth quarter, has been pivotal in driving growth. However, the company faces challenges in managing rising costs and maintaining margins, which are critical for sustaining profitability in the competitive restaurant industry.
Financial Statements Summary
| Metric | Q4 2024 | Q4 2023 |
|---|---|---|
| Total Revenue | $2.8 billion | $2.5 billion |
| Net Income | $331.8 million | $282.1 million |
| Diluted EPS | $0.24 | $0.20 |
Chipotle's financial performance in 2024 highlights its ability to grow revenue and expand its restaurant network. However, the company must address cost pressures to maintain its competitive edge and achieve its long-term goals of expanding its presence and enhancing brand value.
Explore the complete 8-K earnings release (here) from Chipotle Mexican Grill Inc for further details.
