Chipotle Mexican Grill Spices up market with 41% YTD Returns in 2024

There are fewer stocks which are part of S&P500 which have delivered over 30% price returns in 2024. Majority of such high performing stocks have been from technology, energy, and healthcare sector. But, Chipotle Mexican Grill is the only hospitality stock which has even outperformed technology stocks this year. So far, Chipotle has emerged as top performer and has delivered 41% price gains on YTD basis.

Chipotle Mexican Grill Inc (CMG) stock price rose from $2,244 on Jan 02 to $3,159 by Apr 30, a price gain of 41%. The stock witnessed a 10% price gain in month of April and by mid-May it gained another 1% in the month.

Stock Growth: There are number of factors driving increasing market attraction of CMG stock a part of which is based on its earnings performance and it outperforming rest of the market:

• Chipotle delivered 14% increase in revenues compared to just 7% rise in the industry
• Operating margin improved from 15.5% to 16.3%.
• EPS improved remarkably from $10.5 to $13, 24% increase.  
• Stock Performance: 41.5% YTD, 10% in April, 1% in May (as on May 14).

Chipotle’s Play: There a number of market innovations and play adopted by the company to improve its market presence and drive customer retention & spend.

• Chipotle offers higher degree of customization to its customers which have benefitted the company in increasing customer spending.
• Focus on digital sales through in-app purchase has enabled the company to drive more sales per restaurant.
• Chipotle rewards program has a base of 28 million members which drives its business.
• Digital Kitchens have enabled the company to increment digital sales which focus of food delivery.