The fast-growing Mexican eatery reported a strong set of Q4 results after market overnight that were impressive right across the board. Revenue was up 15% YoY at $2.52bn, while margins were exceptional both at the restaurant level (25.4%) and the broader operational level (14.4%) – both well ahead of expectations. This drove a decent beat at the profit line, with earnings per share (EPS) of $10.36, up from $8.25 YoY and ~6% ahead of consensus at $9.71. Interestingly, average sales per restaurant of $3.02m was slightly ahead of the $3m expected and they guided to 285-315 new restaurants in 2024.
- While the stock has been very strong leading into this result, on the first read-through, we can’t see anything in this result that has us concerned.
We own CMG directly in the International Equities Portfolio and indirectly through our holding in Pershing Square PSHZF US.
MM remains long and bullish CMG US
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