Chipotle shares fall 4% as surging digital orders ease from record pace, earnings fall short

Chipotle Mexican Grill is expected to report its fourth-quarter earnings after the bell on Tuesday.

Here’s what Wall Street analysts surveyed by Refinitiv are expecting:

• Earnings per share: $3.73 expected
• Revenue: $1.61 billion expected

Under the leadership of CEO Brian Niccol, the chain has been slowly changing up its menu to attract new customers to its restaurants. It began testing brisket as a protein option in several markets in November and made cauliflower rice available nationwide in January.

The burrito chain has rebounded from the coronavirus pandemic quickly, recovering sales with the help of third-party delivery partnerships and mobile ordering. In each of the last two quarters, Chipotle’s digital sales have more than tripled. In the third quarter, digital growth drove overall same-store sales up 8.3%.

But its sales growth during the crisis has also come with added expenses. Pandemic-related costs like personal protective equipment for its workers have hurt its profit margins, and a higher proportion of delivery orders is eating into its earnings. Delivery companies like DoorDash charge restaurants commission fees for using their service. Chipotle executives have said that they’re testing higher prices on delivery apps to combat the hit to their profits.

In 2021, analysts are expecting the company to nearly double its earnings to $21.67 per share. Sales are expected to grow 17.4% in the same time, according to Refinitiv.

Shares of Chipotle have risen 77% over the last year, giving the company a market value of $43 billion.