Chipotle Mexican Grill follow up: Sees Q4 EPS well below consensus with improvement in December sales as comps eased; adds $100 mln to buyback
Sees Q4 EPS $0.50-0.58 vs $0.98 Capital IQ Consensus; revs $1.035 bln vs $1.05 bln Capital IQ Consensus; comps -4.8% vs. ests near -3.5%.
- Comparable restaurant sales for the quarter decreased 4.8%, which includes the benefit of 0.5% related to previously deferred revenue that was recognized in the fourth quarter. Comparable restaurant sales decreased 20.2% in October 2016, decreased 1.4% in November 2016, and increased 14.7% in December 2016. Sales comparisons are lapping an easier compare due to lower sales levels in November and December 2015.
- Operating margin 13-14%. "During the quarter we incurred higher expenses compared to our originally-forecasted amounts in other operating costs, driven by increased promotional spend and costs related to testing television advertising. Our marketing and promotional expenses during the quarter totaled ~4.7% of sales. We also incurred higher food costs compared to our originally-forecasted amounts as a result of increased market costs for avocados."
- This report is also filed to announce that Chipotle's Board of Directors has authorized repurchases of Chipotle common stock with a total aggregate purchase price of $100 million, exclusive of commissions. This repurchase is in addition to previously announced repurchase authorizations totaling $2.1 billion.