Chipotle's 2024 Results: A Mixed Bag of Growth and Challenges

Chipotle Mexican Grill (CMG) has released its fourth quarter and full year 2024 financial results, offering a mixed bag of growth and challenges for the fast-casual restaurant chain. While the company reported strong comparable restaurant sales growth and expanded margins, it also faced headwinds from rising costs and a slight decrease in restaurant level operating margin.

In the fourth quarter of 2024, Chipotle's total revenue increased by 13.1% year over year (YoY) to $2.8 billion, driven by new restaurant openings and a 5.4% increase in comparable restaurant sales. The company's digital sales represented 34.4% of total food and beverage revenue, reflecting its continued focus on enhancing customer convenience and accessibility. During the quarter, Chipotle opened 119 company-owned restaurants, of which 95 included a Chipotlane, further expanding its footprint and enhancing guest access and convenience.

However, the company faced challenges from rising costs, particularly in food, beverage, and packaging costs, which increased to 30.4% of total revenue. This increase was primarily due to higher usage of ingredients, a protein mix shift from the success of its Smoked Brisket limited-time offer, and inflation across several items, including higher avocado and dairy costs. The increase in labor costs, driven by wage inflation and minimum wage increases in California, also contributed to the company's challenges.

Despite these challenges, Chipotle's operating margin improved to 14.6%, up from 14.4% in the fourth quarter of 2023. The company's adjusted diluted earnings per share (EPS) increased by 19.0% YoY to $0.251, driven by strong transaction growth and menu innovation. For the full year 2024, Chipotle's total revenue increased by 14.6% YoY to $11.3 billion, and its adjusted diluted EPS increased by 24.4% YoY to $1.121.



Looking ahead, Chipotle is projected to maintain its strong digital sales growth and continue expanding its Chipotlane footprint. The company is expected to open between 315 and 345 new locations in 2025, with at least 80% of them including a Chipotlane. Additionally, Chipotle is projected to achieve low- to mid-single digit same-store sales growth in 2025.

In conclusion, Chipotle's 2024 results reflect a mixed bag of growth and challenges for the fast-casual restaurant chain. While the company reported strong comparable restaurant sales growth and expanded margins, it also faced headwinds from rising costs and a slight decrease in restaurant level operating margin. As Chipotle continues to focus on digital sales and Chipotlanes, it must also address the challenges posed by rising costs and maintain its commitment to "Food with Integrity" to remain competitive in the fast-casual market.