What’s happening to Chipotle stock in extended hours?

Chipotle Mexican Grill Inc (NYSE: CMG), on Tuesday, reported its financial results for the fourth quarter that came in shy of Street estimates. Shares are down 5.0% in extended hours.

Analyst’s take on Chipotle

Weakness in the recent quarter suggests its recent price hikes to pass higher food costs are starting to alienate customers as they move to cut spending on fears of a recession. Speaking with Yahoo Finance, Morningstar analyst Sean Dunlop said:

Chipotle now forecasts high-single-digit growth in same-store sales in its fiscal Q1. In comparison, analysts had called for a 6.7% increase.

Should you buy Chipotle stock?

Other notable figures in the earnings report include a 37% year-on-year increase in digital sales. Chipotle noted a 5.6% annualised growth in same-store sales this quarter that was well below expectations. Dunlop added:

The analyst currently rates Chipotle stock at “hold” and sees further downside to $1,560 a share.

Chipotle Q4 earnings snapshot

• Net income printed at $223.7 million versus the year-ago $133.5 million
• Per-share earnings also climbed significantly from $4.69 to $8.02
• Adjusted EPS came in at $8.29 as per the earnings press release
• Revenue went up 11% on a year-over-year basis to $2.18 billion
• Consensus was $8.91 of adjusted EPS on $2.23 billion in revenue

Interestingly, Chipotle said in January that it will hire 15,000 workers across North America to prepare for the “burrito season”. According to Morningstar’s Sean Dunlop:

For the year, this food stock is still up nearly 20%.