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CMG: Squeezing the Consumer a Little Too Much?
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CMG: Squeezing the Consumer a Little Too Much?

(NYSE:CMG) Chipotle Mexican Grill Presents Q4 FY23 Results

Conor Mac's avatar
Conor Mac
Feb 19, 2024
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Chipotle Mexican Grill
Weighting as of writing: 3%

19th February 2024 - FY23 Results

On February 6th, Chipotle Mexican Grill rounded off the year with $9.9 billion (+15.4%) in revenues and a healthy 7.9% comparable sales comp. On an operating and restaurant level, margins expanded to 15.8% and 26.2%, respectively. Proving once again that Chipotle ought not to fear inflation; because Chipotle is inflation. Overall it was a solid report, but I want to focus today’s note on driving growth via traffic vs price.

Chipotle has notoriously been somewhat of a perpetually “expensive” stock if you take an optical approach. Today it trades at ~49x forward earnings; on par with the 10Y mean. On a price-to-free cash flow basis, the 58x multiple is slightly below to 10Y mean of 62x, but still relatively expensive. We can get into the nuances of relying on multiples as a means of relative valuation assessment, but something Chipotle has not been known for throughout its history is being an expensive cons…

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