This Halloween, Chipotle wants to spice things up and do more than just feed customers; it wants to dress them, too.
The burrito maker has joined forces with Spirit Halloween, North America’s largest Halloween retailer, to launch its first-ever costume collection, it said in statement on Wednesday. The publicity stunt takes inspiration from the viral costume memes that both brands have tapped into in recent years.
Starting on September 6, customers can snag a costume that pays tribute to some of Chipotle’s iconic (and less-than-iconic) items, including: napkin, fork, water cup, burrito, and to-go bag. Each unitard is priced at $40 and will be available in sizes from adult small to XL.
The unitards, or full-body suits, will be up for grabs on Spirit Halloween’s website and at select locations across the U.S., including Chicago, Denver, Los Angeles, New York, and Egg Harbor Township, New Jersey. Customers in Canada can buy a costume online, while supplies last.
Through the collaboration, the companies are trying to monetize the somewhat-dated quirky costume memes inspired by Spirit Halloween’s bags. Two years ago, Chipotle jumped on the bandwagon with a fictional “Chipotle Fork” and a “Chipotle Napkin” unitard, which collectively garnered over 700,000 engagements online, the company said.
But that’s not all – Chipotle says it is brewing up another “scarily great offer” for customers next month, with those details still under wraps. The company once gave away free food to customers who dressed in tin foil — like a burrito — on October 31, however the company has since watered down that promotion into a partial discount.
Let’s take a look at the five unitards Chipotle is offering this Halloween:
Finding up-and-coming consumer brands while they are relatively unknown can be a very rewarding investment strategy. The stock market presents these opportunities to investors all the time. You just have to pay attention to what brands people are shopping for more frequently.
Here are two fast-growing brands that could make investors a small fortune over the next 20 years.
1. Cava Group
Investors who jumped on board Chipotle Mexican Grill, McDonald’s, or Starbucks in their early years of growth are sitting in the catbird seat today. Cava Group(NYSE: CAVA) is the latest high-flying restaurant stock that is worth betting on for the long haul.
There are plenty of burger, steak, pizza, Italian, Chinese, and Mexican restaurant chains, but there are not many establishments in the U.S. with a Mediterranean-focused menu. The cuisine is seen as a healthy and sophisticated alternative in a sea of the same old options. This is why Cava has experienced impressive customer traffic this year in a challenging consumer spending environment, which has driven double-digit increases in same-store sales.
Strong growth has sent the stock up 185% over the last year, but it’s not too late to buy it. Cava’s 35% year-over-year revenue growth is on par with Chipotle’s growth in its early years as a public company. A $10,000 investment in Chipotle in 2006 would have grown to $634,000 today, and Cava is following a similar growth path.
Cava has a huge runway of growth. Its quarterly revenue of $231 million is a fraction of Chipotle’s $2.9 billion. It took Chipotle almost two decades to expand to its current size. Cava is currently in 25 U.S. states and just opened in Chicago with the strongest customer response the business has seen to date.
Importantly, Cava is growing its store base at a rate of about 8% to 9% per year, but management is expanding in a disciplined manner. It posted a net profit of $19 million last quarter. The company will become more profitable as it expands across the U.S., and that should support more new highs for Cava stock.
2. On Holding
The athletic apparel industry has been another ripe market for monster winners in the stock market. A $10,000 investment in Nike 44 years ago would now be worth $7.7 million with dividends reinvested. Investors might have a second crack at gains like this, because On Holding(NYSE: ONON) is currently growing at a similar rate to Nike in the 1980s.
On is one of the hottest apparel brands right now. There were 66 On-sponsored athletes at the Paris Olympics this year. Like Nike, On generates most of its sales from performance shoes, a segment that grew 28% year over year on a constant-currency basis last quarter.
On is seeing strong growth across all the various running shoe styles it offers, but management noted that its all-day comfort shoe Cloudtilt is flying off the shelves. The brand just launched its new Cloudsurfer Next shoe at a relatively low price point that management expects to expand its addressable market.
The popularity of On shoes, especially among athletes, shows the potential of the brand to benefit from partnerships. This is similar to how Nike built its brand. It has already experienced a significant increase in brand awareness from a partnership with actress and singer Zendaya, who has a massive following on social media.
Nike didn’t have the advantage of social media 40 years ago, so On could see its brand grow at a more rapid clip than Nike did. On that note, analysts expect the company to grow earnings at an annualized rate of 34% over the next several years, which should support stellar returns for investors.
Should you invest $1,000 in Cava Group right now?
Before you buy stock in Cava Group, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Cava Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $731,449!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. TheStock Advisorservice has more than quadrupled the return of S&P 500 since 2002*.
John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill, Nike, and Starbucks. The Motley Fool recommends Cava Group and On Holding and recommends the following options: short September 2024 $52 puts on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.
Chipotle Mexican Grill (NYSE:CMG – Get Free Report) had its target price reduced by stock analysts at Loop Capital from $58.00 to $53.00 in a research report issued on Thursday, Benzinga reports. The firm presently has a “hold” rating on the restaurant operator’s stock. Loop Capital’s price objective indicates a potential upside of 6.40% from the stock’s current price.
CMG has been the subject of a number of other reports. The Goldman Sachs Group decreased their price objective on Chipotle Mexican Grill from $74.60 to $67.00 and set a “buy” rating for the company in a research note on Thursday. Wedbush lowered their price target on shares of Chipotle Mexican Grill from $64.00 to $54.00 and set a “neutral” rating on the stock in a report on Thursday. Jefferies Financial Group lifted their price objective on shares of Chipotle Mexican Grill from $47.00 to $54.00 and gave the stock a “hold” rating in a research report on Tuesday, April 16th. Morgan Stanley increased their target price on shares of Chipotle Mexican Grill from $59.72 to $62.00 and gave the company an “equal weight” rating in a research report on Thursday, April 25th. Finally, Deutsche Bank Aktiengesellschaft cut their price target on shares of Chipotle Mexican Grill from $72.00 to $67.00 and set a “buy” rating on the stock in a report on Thursday. Eleven analysts have rated the stock with a hold rating and seventeen have issued a buy rating to the company’s stock. According to data from MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and an average price target of $62.88.
NYSE:CMG opened at $49.81 on Thursday. The firm has a 50-day simple moving average of $125.36 and a 200-day simple moving average of $79.52. Chipotle Mexican Grill has a one year low of $35.37 and a one year high of $69.26. The firm has a market cap of $68.41 billion, a P/E ratio of 52.99, a P/E/G ratio of 2.07 and a beta of 1.24.
Chipotle Mexican Grill (NYSE:CMG – Get Free Report) last issued its quarterly earnings data on Wednesday, July 24th. The restaurant operator reported $0.34 EPS for the quarter, topping analysts’ consensus estimates of $0.32 by $0.02. The company had revenue of $2.97 billion during the quarter, compared to the consensus estimate of $2.94 billion. Chipotle Mexican Grill had a net margin of 13.23% and a return on equity of 46.17%. Chipotle Mexican Grill’s revenue for the quarter was up 18.2% compared to the same quarter last year. During the same quarter in the previous year, the firm posted $12.65 earnings per share. On average, research analysts predict that Chipotle Mexican Grill will post 1.1 EPS for the current fiscal year.
Institutional Inflows and Outflows
Several institutional investors have recently made changes to their positions in CMG. Steph & Co. purchased a new position in shares of Chipotle Mexican Grill during the 1st quarter valued at about $29,000. Semmax Financial Advisors Inc. raised its position in Chipotle Mexican Grill by 225.0% during the first quarter. Semmax Financial Advisors Inc. now owns 13 shares of the restaurant operator’s stock valued at $42,000 after acquiring an additional 9 shares in the last quarter. Crewe Advisors LLC acquired a new position in Chipotle Mexican Grill in the first quarter valued at approximately $44,000. Turtle Creek Wealth Advisors LLC acquired a new position in Chipotle Mexican Grill in the fourth quarter valued at approximately $37,000. Finally, ICA Group Wealth Management LLC purchased a new stake in Chipotle Mexican Grill in the 4th quarter worth approximately $37,000. Hedge funds and other institutional investors own 91.31% of the company’s stock.
Chipotle Mexican Grill, Inc, together with its subsidiaries, owns and operates Chipotle Mexican Grill restaurants. It sells food and beverages through offering burritos, burrito bowls, quesadillas, tacos, and salads. The company also provides delivery and related services its app and website. It has operations in the United States, Canada, France, Germany, and the United Kingdom.
Featured Articles
Receive News & Ratings for Chipotle Mexican Grill Daily – Enter your email address below to receive a concise daily summary of the latest news and analysts’ ratings for Chipotle Mexican Grill and related companies with MarketBeat.com’s FREE daily email newsletter.
The market loves a good stock split. When a company decides to split its shares, it is a reflection of the company’s success and also indicates management’s confidence in its future. In other words, it’s almost always top stocks demonstrating strong performance that go for stock splits.
The two newest stock-split stocks currently gripping the market are Walmart, whose 3-for-1 stock split went through in February, and Chipotle Mexican Grill, which announced a gargantuan 50-for-1 split last week. Both of these stocks are outpacing the broader market this year.
Will other stocks follow? Costco Wholesale(NASDAQ: COST) and MercadoLibre(NASDAQ: MELI) are two stocks that look poised for stock splits.
The unbeatable membership model
Costco has been a market-beating stock for decades. It has an incredible, unbeatable retail membership model that generates customer loyalty, high traffic, and strong sales. It charges $60 for a basic annual membership, which members more than make up for with their cost savings on their yearly purchases. Costco marks up products, which it sells mostly in bulk, with razor-thin margins to cover costs, and it makes its profits on the fees.
Sales growth was sluggish for most of last year and even headed into negative territory, but that was mostly attributable to shoppers cutting down on large, expensive items. Traffic and volume were up, as was membership.
In fiscal 2024’s second quarter (ended Feb. 18), sales increased 5.9% year over year driven by a 5.6% increase in comparable sales and a 5.3% increase in traffic. Earnings per share (EPS) were up from $3.30 to $3.92. Membership fee increased 8.4% to $84 million, and paid household members increased 7.8% to $73.4 million. Renewal rates continue to be sky-high, with Canada and the U.S. at 92.9% and the global rate at 90.5%.
Costco has split its stock three times in the past, and the last time it did was 24 years ago. The stock is up almost 1,500% since then, and it’s up 48% over the past year. Each share cost more than $700 as of this writing.
Costco paid a $15 special dividend to shareholders earlier this year, and it’s also due for a membership fee hike. Walmart and Chipotle noted their strong performances and continued opportunities in their stock split announcements, and that applies to Costco, too. This could also be the year that it finally splits its stock.
The leader in Latin American e-commerce
MercadoLibre is the top Latin American e-commerce giant, similar to Amazon. Even though it’s not so young anymore, it operates in a market that’s exploding, and it’s still reporting exceptional growth in its e-commerce business. Gross merchandise volume (GMV) increased 79% year over year (currency neutral) in the 2023 fourth quarter.
Like Amazon, MercacoLibre has branched out into new businesses, and these are growing even faster. It has a large fintech business focused on digital payments, and total payment volume (TPV) was up 153% year over year in the fourth quarter. It has incredible opportunities in off-platform TPV, which are payments that aren’t made in its own marketplace. Off-platform TPV was up a whopping 182% in the fourth quarter.
As part of the fintech segment, MercadoLibre also operates a fairly new credit business. This is a lucrative undertaking that gives the company tons of cash to fund other ventures and invest for interest income. The credit portfolio increased 33% year over year in the fourth quarter.
Total company revenue increased 83% year over year in the quarter. Net income was negatively impacted by a tax liability in the fourth quarter, but MercadoLibre remains reliably profitable, with $165 million in the fourth quarter.
MercadoLibre has been a public company since 2007, and it has never split its stock. It’s gained more than 5,000% in its lifetime and trades with a price tag of $1,540 today. Hitting four digits often leads to a stock split, but MercadoLibre has been in that bracket for some time. Its stock is about flat this year, falling after the fourth-quarter report and the drop in profits.
In contrast to the reasons for the other stock splits mentioned above, a stock split could stimulate greater interest in MercadoLibre stock and signal that management is confident about the future. In any case, this is a great opportunity for investors to buy in before MercadoLibre stock starts climbing again.
Should you invest $1,000 in Costco Wholesale right now?
Before you buy stock in Costco Wholesale, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Costco Wholesale wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jennifer Saibil has positions in MercadoLibre. The Motley Fool has positions in and recommends Amazon, Chipotle Mexican Grill, Costco Wholesale, MercadoLibre, and Walmart. The Motley Fool has a disclosure policy.
A stock splitting its shares is generally a positive sign that the company (and its stock) is doing well. Splits don’t change the actual value of an investor’s holdings in a company, they just divide the holding into smaller pieces. But at a lower price point, a stock may become more accessible and attractive to a wider pool of investors. It’s also indicative of a stock’s success; stocks that split their shares normally do so because their prices are high.
However, not doing a stock split doesn’t necessarily mean a stock has been doing poorly. Costco Wholesale(NASDAQ: COST) stock currently trades around the $700 mark. The company could easily split its shares and still be priced fairly high.
Is a stock split likely for Costco in 2024?
Costco’s last stock split was in 2000
The last time Costco management enacted a stock split was back in early 2000 when the warehouse club retailer split shares on a 2-for-1 basis. There were a few other splits in the 1990s, but nothing in more than two decades.
If the company were to execute a stock split this year, it would likely split by even more than just 2-for-1, as that would still put the stock at a relatively high price of $350. A 7-for-1 split, for instance, would put it at around the $100 mark. There are no hard and fast rules about what the resulting share price should be from a split, but a look at splits by other companies in the past several years indicates that aiming for $100 a share is popular.
A high stock price doesn’t mean a split is inevitable
While Costco is among the highest-priced stocks on the S&P 500, there are stocks even higher priced that haven’t done stock splits. Shares of Chipotle Mexican Grill trade at more than $2,300, while homebuilder NVR has a stock price of more than $7,400. A high price alone isn’t enough of a reason to suggest that a stock split is inevitable. Neither Chipotle Mexican Grill nor NVR has ever completed stock splits in their history.
Ultimately, what it comes down to is management and its preferences. Warren Buffett’s Berkshire Hathaway has two classes of shares — its original Class A, which is priced at more than $550,000 today and has never split, and Class B, which is more modestly priced and trades at around $370 and has split a couple of times since it was launched in 1996. But, other than the price, there is next to no real difference in owning the shares.
Why Costco probably won’t do a split this year
If Costco were going to do a stock split, it probably would done so in 2022 along with the many other big-name stocks that initiated splits, including Amazon, Alphabet, and Tesla.
That year Costco’s stock also reached highs of around $600, and there arguably would have been more of a reason to do a split back then, when stock splits were attracting a lot of attention from investors. Costco’s reluctance to split its shares back then suggests to me that it’s not going to do one anytime soon.
Costco is doing well where it matters most — the bottom line
In an era where fractional shares are more easily accessible, stock splits shouldn’t matter to investors. What is important is how the business performs, and in Costco’s case, the company’s financials remain impressive. In its most recent quarter (ended on Nov. 26, 2023), Costco reported $57.8 billion in revenue, which grew at a rate of 6% year over year. Earnings of approximately $1.6 billion increased by 16%.
Costco’s strong customer loyalty and brand make it among the best growth stocks to buy and hold for the long term. The company has done well under a myriad of economic conditions over the past few years, demonstrating its overall strength and versatility.
While Costco’s stock isn’t a cheap buy, trading at nearly 50 times its trailing earnings, with continued growth and many opportunities for expansion internationally, this has the potential to be a solid investment for years to come, regardless of the higher-than-average share price.
Should you invest $1,000 in Costco Wholesale right now?
Before you buy stock in Costco Wholesale, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Costco Wholesale wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Berkshire Hathaway, Chipotle Mexican Grill, Costco Wholesale, NVR, and Tesla. The Motley Fool has a disclosure policy.
Stock splits excite investors for two reasons. They reduce the price per share, and they often hint at a competitively advantaged company with solid financials. Stock splits generally follow substantial share price appreciation, and that rarely happens to companies that lack sound fundamentals.
With that in mind, Chipotle Mexican Grill(NYSE: CMG) and Palo Alto Networks(NASDAQ: PANW) rewarded shareholders with monster returns of 345% and 395%, respectively, over the last five years. That share price appreciation makes both companies stock-split candidates in 2024. More importantly, it shows that both stocks can create value for patient shareholders, and investors should aspire to own such companies.
To that end, whether they split their stocks or not, Chipotle and Palo Alto are worthwhile long-term investments.
1. Chipotle Mexican Grill
Chipotle owns more than 3,300 fast-casual restaurants across North America and Europe. The company has built a reputable brand by focusing on “food with integrity.” Specifically, it sources only responsibly raised meats that have never been treated with hormones or antibiotics. It uses only organically grown produce and fresh ingredients, meaning no preservatives, freezers, or can openers are involved in food preparation.
That strategy clearly resonates with consumers, as Chipotle regularly outperforms its peers in key metrics like same-store sales and customer traffic. Indeed, the company reported 5% same-store sales growth in the third quarter, more than double the restaurant industry average, and traffic increased by 4% despite a decline in traffic across the broader industry.
Total revenue rose 11% to $2.5 billion in the third quarter, driven by new restaurant openings and strong same-store sales. Better yet, generally accepted accounting principles (GAAP) net income jumped 23% to $11.32 per diluted share due to operating margin expansion and stock buybacks. Management also highlighted better staffing, as well as improvements in throughput and digital order accuracy.
To summarize, Chipotle continued to grow at a steady clip while making progress on strategic priorities. The company also guided for 285 to 315 new restaurant openings in 2024, which represents a 9% increase in store count, and management expects that pace to approach 10% in 2025. That lays the foundation for solid sales growth.
Indeed, Morningstar analyst Sean Dunlop expects Chipotle to grow revenue at 13% annually over the next decade. In that light, the current valuation of 6.7 times sales appears reasonable despite being a premium to the three-year average of 6 times sales. Investors should consider buying a small position in this stock today.
2. Palo Alto Networks
Palo Alto provides solutions for network security, cloud security, and security operations, and the company is working to consolidate its platforms. For instance, its network security portfolio includes next-generation firewalls and a secure access service edge. The company recently unified those products under Strata Cloud Manager, a zero-trust management platform powered by artificial intelligence.
Similarly, Palo Alto recently introduced Cortex XSIAM (extended security intelligence and automation management) to unify a broad range of security operations products. Cortex XSIAM leans on machine learning models to detect, investigate, and respond to threats across networks, endpoint devices, identities, and cloud workloads.
According to Morgan Stanley, Palo Alto holds more market share in network security and cloud security than any other vendor. Additionally, Forrester Research recently recognized the company as a leader in zero-trust platforms, citing a stronger current offering and a stronger growth strategy than any other vendor. The report awarded Palo Alto perfect scores in device security, cloud application protection, and automation.
Palo Alto gave a strong performance in the most recent quarter. Revenue rose 20% to $1.9 billion, and non-GAAP net income soared 75% to $266 million. Investors can expect a similar growth trajectory in the future. Palo Alto should benefit from an increasingly sophisticated threat landscape, regulatory tailwinds like new reporting requirements for public companies, and growing demand for cybersecurity automation.
To quote Argus analyst Joseph Bonner, “What makes Palo Alto stand out from its sector peers is not just best-in-class technology integrated into a comprehensive cybersecurity platform, but also its rapid product innovation cycle, focus on next-generation cloud security, secure access at the service edge, and automated security operations.”
With that in mind, Palo Alto is targeting annual sales growth of 18% over the next three years. That projection makes its current valuation of 15.9 times sales seem fair, though it is a premium to the three-year average of 10.2 times sales. Patient investors should feel comfortable buying a small position in Palo Alto stock today.
Should you invest $1,000 in Chipotle Mexican Grill right now?
Before you buy stock in Chipotle Mexican Grill, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Chipotle Mexican Grill wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill and Palo Alto Networks. The Motley Fool has a disclosure policy.
HOUSTON—Stressing that all she wanted for the holiday was for her son to be happy, local mom Beverly Higgins reportedly mailed her son Conner a Mother’s Day gift Sunday, according to sources. “Just a little something to show how much I love you on my special day,” read the card, which accompanied a brand-new Nintendo Switch, several pairs of wool socks, and a $25 gift card to Chipotle meant “to thank [him]” for giving her the gift of being his mother. “I was at the mall near the hospital after getting a little operation—don’t worry, I’m fine!—and then saw the GameStop and thought of you. You’ve already done enough just by being born, so don’t you think of getting me anything in return, mister! And if you already did, just return it and keep the money and buy yourself something nice. You deserve it! Mothers often get all the credit for the work we do, but I think you deserve it more for being my sweet, special boy.” At press time, Conner Higgins had reportedly called his mother a “bitch” after the package embarrassed him in front of his roommates.
Nation’s Mothers Describe How Nice It Would Be If You Lived Closer
