Bill Ackman is a well-known investor whose strategy centers on making concentrated bets in what he believes are high-quality businesses. The hedge fund he runs, Pershing Square Capital Management, has a solid track record over the past two decades. Everyday investors watch the firm's moves closely.In the portfolio as of Dec. 31, there were 11 total positions. One of them is for a company whose shares Ackman has been selling over the past several quarters. Nonetheless, it still represented 12% of the Pershin ...

Core Viewpoint - Chipotle's stock has declined over 25% since the appointment of new CEO Scott Boatwright, raising concerns about the company's future performance and growth potential [1][7]. Current State of Chipotle - The company reported a 0.4% decrease in annual comparable-restaurant sales for Q1 2025, a significant drop from the 7.4% increase in 2024 and 5.4% in Q4 2024, attributed to consumer uncertainty [4]. - Chipotle expanded its restaurant count to 3,781, marking an 8% increase with 302 new locations over the past year, and reported Q1 revenue of $2.9 billion, reflecting a 6.4% increase [5]. - The operating margin improved to 16.7% from 16.3% year-over-year, resulting in a net income of $387 million, an 8% annual gain [5]. Growth Projections - The company anticipates comparable-restaurant sales growth to remain in the "low single digits" for the year, leading to concerns among shareholders about future growth rates [6]. Investment Case Assessment - Historically, Chipotle's stock outperformed the S&P 500, but it has declined 15% over the past 12 months, particularly after the leadership change [7]. - The current price-to-earnings (P/E) ratio stands at 45, which is at the lower end of its five-year range, raising concerns about valuation amidst slowing growth [8]. - Comparatively, mature restaurant stocks like McDonald's and Starbucks trade at P/E ratios of 28 and 27, respectively, suggesting potential valuation compression for Chipotle if growth does not rebound [9][10]. Future Expansion Plans - Chipotle plans to open 315 to 345 new locations in 2025 and is exploring opportunities in Mexico, indicating a commitment to maintaining its expansion trajectory [12]. - The smaller size of Chipotle compared to larger peers may allow for higher percentage growth in its footprint [11]. Investment Recommendation - The current recommendation is to hold Chipotle stock, as it presents a compelling value proposition amid ongoing expansion, despite uncertainties related to leadership changes and economic conditions [13]. - Investors may want to wait for a more favorable entry point or clearer growth prospects before increasing their positions in Chipotle [14].

Core Insights - Chipotle Mexican Grill reported its first same-store sales decline since 2020, with a 0.4% drop in comparable-restaurant sales, attributed to weakening consumer traffic and economic concerns [3][8][4] - The company anticipates same-store sales growth in the low single digits for 2025, slightly lower than previous forecasts, with expectations for traffic to turn positive in the second half of the year [6][5] - Despite challenges, Chipotle continues to grow revenue, reporting a 6% increase to $2.88 billion, and adjusted earnings per share (EPS) rose 7% to $0.29, surpassing analyst expectations [8][11] Consumer Traffic and Economic Concerns - Chipotle experienced a 2% sales decline in January, with management attributing this to severe weather, wildfires, and an unfavorable calendar shift [3] - In February, the company noted a reduction in customer visits due to economic uncertainty, which has persisted into April [4] Financial Performance - Revenue grew by 6% to $2.88 billion, while adjusted EPS increased by 7% to $0.29, exceeding the analyst consensus of $0.28 [8] - Comparable-restaurant sales fell 0.4%, below the expected 1.7% increase, with transactions down 2.3% and average check rising by 1.9% [8] Operating Margins and Costs - Restaurant-level operating margins decreased by 130 basis points to 26.2%, impacted by larger portion sizes and rising food and labor costs [9] - Chipotle expects ongoing tariff impacts of about 50 basis points, excluding postponed tariffs on Mexico and Canada [9] Growth Opportunities - The company plans to add new locations at an annual rate of 8% to 10% in the U.S. and is exploring international expansion opportunities in Canada, the U.K., Germany, and the Middle East [12] - Chipotle has signed an agreement with Alsea to open restaurants in Mexico, with the first location scheduled for early next year [12] Valuation and Investment Perspective - The stock trades at a forward price-to-earnings (P/E) multiple of about 39 based on 2025 estimates, which is at the low end of its historical range [13] - Despite current challenges, the long-term growth story for Chipotle remains intact, suggesting potential for investors to accumulate shares [13]

Core Viewpoint - Chipotle Mexican Grill is facing challenges in Q2 2025 due to a post-stock split letdown, CEO transition, global macroeconomic issues, and a sluggish outlook, but maintains a strong leadership position and growth potential [1][2][8] Group 1: Financial Performance - Chipotle reported Q1 revenue of $2.9 billion, slightly below analysts' expectations, with growth driven by new store openings [4] - The company added 57 new stores in Q1, representing an 8.7% increase year-over-year, although comparable store sales declined by 0.4% due to lower transaction volume [4] - Average check increased by nearly 2%, indicating that while customer visits may be less frequent, spending per visit is higher [5] Group 2: Cost and Margin Analysis - Restaurant-level operating margin contracted by 130 basis points due to rising food and labor costs, but this was offset by reduced selling, general, and administrative (SG&A) expenses [6] - SG&A savings helped maintain adjusted net earnings growth of 7.4% despite increased restaurant costs [7] Group 3: Future Outlook - Chipotle forecasts low single-digit growth in comparable store sales for 2025, with a high single-digit increase in store count, suggesting overall revenue and earnings growth in the low double digits by year-end [8] - The company is nearing completion of its share repurchase authorization but plans to increase it soon, supported by strong cash flow [10] - Analysts have lowered price targets for Chipotle stock, but the current market price is near a critical support level, indicating potential for a rebound [11][12] Group 4: International Expansion - Chipotle is accelerating its international expansion, having opened two licensed stores in the latest quarter and planning to enter the Mexican market by early 2026 [3] - Management views Mexico as a favorable market due to the alignment of its ingredients and cooking style with local preferences [3]

Chipotle Mexican Grill (CMG 4.84%) reported its financial results for the first quarter on Wednesday, posting adjusted earnings per share of $0.29, which exceeded Wall Street estimates. However, its revenue of $2.9 billion came up short of expectations.This top restaurant stock has been a huge winner over the past five years (as of April 24), rising by 184%. But investors are losing their appetite for it in 2025. Shares have tanked by 18% so far this year, and they're down 28% from the all-time high they se ...

Core Viewpoint - Consumer companies are reducing their forecasts due to the impact of tariffs on profits and a decline in consumer spending, with at least a dozen companies adjusting their full-year outlooks during the current earnings season [1][2][12]. Impact of Tariffs - Tariffs are leading to increased prices on essential commodities, which negatively affects earnings, and the uncertainty from the trade war is causing consumers to reduce spending [2][11]. - Current tariffs include a 10% duty on most imports, with Chinese goods facing a 145% duty, impacting various sectors including aviation and consumer goods [3][5]. Company Responses - Companies like Procter & Gamble, Keurig Dr Pepper, and Hasbro are considering price increases to offset higher costs due to tariffs [7][14]. - American Airlines has pulled its financial guidance for 2025, citing the unpredictable U.S. economy and the negative impact of tariffs on demand [6][17]. Consumer Sentiment - U.S. consumer sentiment has dropped to its second-lowest level since 1952, leading to reduced spending as consumers fear inflation and potential recession [10][11]. - Chipotle has reported a slowdown in customer traffic, attributing it to financial concerns among diners, which has led to a reduction in their sales growth outlook [14]. Sector-Specific Insights - The airline industry is experiencing weaker demand, particularly in economy cabins, with executives expressing concerns over the tariff policies affecting travel [16][17]. - Hasbro has reiterated its forecast, anticipating a significant headwind from tariffs, while also warning of potential job losses due to increased costs [15].

Chipotle Mexican Grill, Inc. (CMG) reported mixed first-quarter 2025 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.Chipotle's first-quarter results were affected by various headwinds, including unfavorable weather conditions and reduced consumer spending. Nonetheless, the company has made notable strides in enhancing restaurant operations, advancing back-of-house innovations and expanding its brand pres ...

Financial Data and Key Metrics Changes - Sales grew over 6% to reach $2.9 billion, including a comparable sales decline of 0.4% [8][44] - Digital sales represented 35.4% of total sales [8] - Restaurant-level margin was 26.2%, a decrease of 130 basis points year over year [8][44] - Adjusted diluted earnings per share was $0.29, representing 7% growth over last year [8][44] - Cost of sales increased to 29.2%, up about 40 basis points from last year [47] - Labor costs for the quarter were 25%, an increase of about 60 basis points from last year [51] Business Line Data and Key Metrics Changes - The company opened 57 new restaurants, including 48 Chipotle lanes [8] - The average cost of a popular entree is still under $10, which is about 20% to 30% below comparable fast-casual meals [15] - New restaurant economics remain strong, with year two cash-on-cash returns around 60% [38] Market Data and Key Metrics Changes - The company is facing a slowdown in consumer spending, impacting transaction trends [10][11] - Current underlying trends would result in a low single-digit full-year comparable sales growth [12] Company Strategy and Development Direction - The company focuses on five key strategies: successful restaurant operations, technology and innovation, brand visibility, people leadership, and expanding access through new restaurant openings [12][13] - The company aims to expand to 7,000 restaurants in the US and Canada [37][42] - Marketing plans will ramp up in the summer to enhance visibility and relevance [30] Management's Comments on Operating Environment and Future Outlook - Management noted that elevated consumer uncertainty is impacting spending habits, leading to a slowdown in transaction trends [10][11] - The company remains optimistic about returning to positive transaction growth in the second half of the year [12][46] - Management emphasized the strength of the Chipotle brand and its value proposition [11][63] Other Important Information - The company has a strong balance sheet with $2.1 billion in cash and no debt [55] - The board authorized an additional $400 million for share repurchase [55] Q&A Session Summary Question: How does the company view competition in the fast-casual space? - Management expressed confidence that competition does not materially impact their business, often seeing increased traffic in areas with new competitors [62][63] Question: What is the impact of tariffs on new store CapEx? - Management indicated that tariffs could lead to a mid-single-digit increase in new store build costs, but the impact appears minimal at this point [66][68] Question: What are the underlying factors for the slowdown in consumer spending? - Management attributed the slowdown to economic uncertainty and consumers eating at home more frequently, rather than issues specific to Chipotle [73][74] Question: How does the company plan to address digital sales performance? - Management acknowledged the need for improvement in digital sales and is working on removing friction points in the app to enhance customer experience [113][114] Question: What initiatives are in place to drive positive transaction comps? - Management highlighted the importance of operational efficiency, marketing initiatives, and digital enhancements to drive positive transaction growth in the second half of the year [134]

Financial Performance - Total revenue for Q1 2025 was $2,875,253, an increase of 6.4% compared to $2,701,848 in Q1 2024[9] - Net income for Q1 2025 was $386,599, representing a 7.6% increase from $359,287 in Q1 2024[9] - Earnings per share (EPS) for Q1 2025 were $0.28 diluted, up from $0.26 diluted in Q1 2024[9] - The company reported a comprehensive income of $387,034 for Q1 2025, compared to $357,994 in Q1 2024[9] - U.S. segment total revenue for Q1 2025 was $2,822,444,000, up from $2,657,756,000 in Q1 2024, indicating a year-over-year increase of 6.2%[54] - Food and beverage revenue for Q1 2025 was $2,807,074,000, an increase from $2,640,397,000 in Q1 2024, representing a growth of 6.3%[54] - Total revenue increased by 6.4% to $2.9 billion for the three months ended March 31, 2025[59] Assets and Liabilities - Total assets decreased to $9,044,094 as of March 31, 2025, down from $9,204,374 as of December 31, 2024[8] - Total current liabilities decreased to $1,091,538 as of March 31, 2025, compared to $1,168,768 as of December 31, 2024[8] - As of March 31, 2025, the gift card liability was $145,355, down from $181,771 on December 31, 2024[22] - The Chipotle Rewards liability increased to $58,389 as of March 31, 2025, from $47,324 on December 31, 2024, with revenue recognized of $39,985 for the three months ended March 31, 2025[24] - As of March 31, 2025, equity method investments totaled $27,116, down from $28,097 on December 31, 2024[29] - Other investments increased to $73,003 as of March 31, 2025, from $69,002 on December 31, 2024[29] Cash Flow and Financing Activities - Cash and cash equivalents at the end of Q1 2025 were $725,597, a decrease from $748,537 at the end of Q4 2024[8] - Total cash and cash equivalents as of March 31, 2025, amounted to $2,042,525, compared to $2,221,688 on December 31, 2024[25][26] - Cash provided by operating activities was $557.1 million for the three months ended March 31, 2025, compared to $569.2 million for the same period in 2024, reflecting a decrease primarily due to net cash changes in operating assets and liabilities[81] - Cash provided by investing activities was $6.1 million for the three months ended March 31, 2025, compared to cash used in investing activities of $301.0 million for the same period in 2024, mainly due to a $319.2 million decrease in investment purchases[82] - Cash used in financing activities was $585.2 million for the three months ended March 31, 2025, compared to $100.1 million for the same period in 2024, primarily due to increased repurchases of common stock of $526.8 million[83] - The company has $874,655 authorized for repurchasing shares of common stock, including $400,000 in additional authorizations approved on March 27, 2025[34] - The total number of shares repurchased in the first quarter of 2025 was 10,224,763 at an average price of $54.15 per share[95] - The company has $874.7 million remaining available for repurchases of shares of common stock, including a $400.0 million additional authorization approved on March 27, 2025[77][96] Operational Metrics - The company operated 3,781 restaurants as of March 31, 2025, including 3,697 in the U.S. and 84 international locations[16] - Comparable restaurant sales decreased by 0.4%, attributed to a 2.3% decline in transactions offset by a 1.9% increase in average check[60] - Digital sales accounted for 35.4% of total food and beverage revenue[60] - The company opened 57 new restaurants, including 48 with a Chipotlane, and expects to open approximately 315 to 345 company-owned restaurants in 2025[61] Cost and Expenses - Food, beverage, and packaging costs increased by 7.6% to $838.4 million, representing 29.2% of total revenue[67] - Labor costs rose by 8.9% to $718.2 million, accounting for 25.0% of total revenue[69] - Occupancy costs increased by 10.4% to $149.8 million, representing 5.2% of total revenue[70] - General and administrative expenses decreased by 15.6% to $172.8 million, accounting for 6.0% of total revenue[72] - Provision for income taxes increased by 13.4% to $114.9 million, with an effective tax rate of 22.9%[74] - The effective income tax rate for Q1 2025 was 22.9%, up from 22.0% in Q1 2024, primarily due to reduced tax benefits related to option exercises[41] Stock and Compensation - Total stock-based compensation for Q1 2025 was $38,180,000, compared to $36,681,000 in Q1 2024, reflecting a year-over-year increase of 4.1%[37] - Total capitalized stock-based compensation included in leasehold improvements was $579,000 for Q1 2025, down from $678,000 in Q1 2024[37] - The number of outstanding SOSARs increased from 10,414,000 on January 1, 2025, to 11,767,000 by March 31, 2025, reflecting a growth of 13%[38] Future Outlook - The company expects to generate positive cash flow for the foreseeable future, assuming no significant declines in comparable restaurant sales[79] - The company plans to continue investing in new restaurant construction and refurbishing existing restaurants using cash flow from operations[77] - The company anticipates a 50 basis point increase in food, beverage, and packaging costs due to tariffs enacted in April 2025[68] - As of March 31, 2025, the company had $500.0 million of undrawn borrowing capacity under a line of credit facility[78]

Chipotle Mexican Grill (CMG) came out with quarterly earnings of $0.29 per share, beating the Zacks Consensus Estimate of $0.28 per share. This compares to earnings of $0.27 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 3.57%. A quarter ago, it was expected that this Mexican food chain would post earnings of $0.24 per share when it actually produced earnings of $0.25, delivering a surprise of 4.17%.Over the last four quarter ...