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Chipotle Mexican Grill Inc CMG Stock Quote

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Morningstar‘s Stock Analysis CMG

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Restaurant Pulse Q3 2022: Fast Food Stocks Look Appetizing as Macro Pressure Drives Belt Tightening

Sean Dunlop Equity Analyst

Analyst Note

| Sean Dunlop |

Our restaurant coverage has taken a beating over the past two quarters, shedding 8%-10% of its market cap (albeit modestly ahead of a 12%-13% decline in Morningstar's U.S. Large Cap Index) as inflation and a weaker consumer have driven sagging near-term prospects. With wages and food costs each up about 20% since the onset of the COVID-19 pandemic, restauranteurs have been forced to absorb substantial pressure: across our coverage, we've seen a median decline of 630 basis points of restaurant margin over the past 12 months. We don't expect a full margin recovery until fiscal 2024, particularly since consumers naturally shift spending towards the relatively cheaper grocery channel amidst periods of economic pressure, blunting restaurant operators' ability to offset inflation with price increases in the higher cost per meal channel.

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Key Statistics CMG

Company Profile CMG

Business Description

Chipotle Mexican Grill is the largest fast-casual chain restaurant in the United States, with systemwide sales of $7.5 billion in 2021. The Mexican concept is entirely company-owned, with a footprint of more than 3,000 stores, heavily indexed to the United States (though the firm maintains a small presence in Canada, the U.K., France, and Germany). Chipotle sells burritos, burrito bowls, tacos, quesadillas, and beverages, with a selling proposition built around competitive prices, high-quality food sourcing, speed of service, and convenience. The company generates its revenue entirely from restaurant sales and delivery fees.

610 Newport Center Drive, Suite 1400
Newport Beach, CA, 92660
T +1 949 524-4000
Industry Restaurants
Most Recent Earnings Jun 30, 2022
Fiscal Year End Dec 31, 2022
Employees 97,660

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