4. Chipotle Mexican Grill, Inc. (NYSE: CMG)
Number of Hedge Fund Holders: 41
Chipotle Mexican Grill, Inc. (NYSE: CMG) is a chain of fast-casual dining restaurants based in Colorado, Denver. The company mainly serves Mexican-inspired menus such as burritos and tacos. It was founded in 1993 and has restaurants in the U.S., Canada, France, Germany, and the U.K. The company is widely popular for using natural and organic ingredients in its menu. In the first quarter, the company opened 40 new restaurants and expects 200 new restaurant openings in FY21.
In Q1 2021, Chipotle Mexican Grill, Inc. (NYSE: CMG) reported a net income of $153.1 million, up from $87.1 million during the same period last year. The EPS was recorded at $5.36, beating the consensus by $0.47. The revenue for the quarter stood at $1.7 billion, presenting a 23.4% year-over-year growth, with delivery services accounting for $25.5 million of the gross revenue. Comparable restaurant sales grew by 17.2% due to menu innovation and effective marketing. The company’s digital sales also grew and represented 50% of gross sales. The CMG stock has delivered a 48.3% return in the past year. The price target of the stock has been raised by many investment banks, including Cowen, BTIG, RBC Capital, etc. UBS also has a ‘Buy’ rating on the stock, with a $1700 price target, and sees the stock as a multi-year growth opportunity for the investors.
The number of hedge funds holding positions in Chipotle Mexican Grill, Inc. (NYSE: CMG) increased from 35 to 41 in the first quarter. The total value of these stakes is $3.03 billion. With over 1 million shares worth $1.5 billion, Pershing Square is the leading shareholder of the company.
Pershing Square Holdings Ltd. published its Q4 2020 investor letter and mentioned Chipotle Mexican Grill, Inc. (NYSE: CMG) in it. Here is what the firm has to say:
“Chipotle’s superb 2020 performance amid a challenging backdrop was due to the successful business transformation led by CEO Brian Niccol and his team. Improved digital access, which has been a pillar of management’s transformation strategy and a growing sales driver in recent years, enabled the company to serve customers with digital pickup and delivery as the pandemic began. Only three months after the onset of COVID-19 in the U.S., Chipotle returned to growth, achieving same-store sales growth of 6% in Q4, or 20% over two years.
The pandemic accelerated a shift in the company’s digital sales mix from just under 20% of sales at the end of 2019 to 70% in April, before settling to about 50% in July, a level which has been maintained through the start of 2021. Management believes that the majority of these digital sales are incremental, noting that in the 60% of stores with dining rooms open, 80% to 85% of digital sales gains are being retained while 50% to 60% of in-store sales have been recovered…” (Click here to view the full text)
