CHIPOTLE MEXICAN GRILL INC Quarterly Report for Q1 Ended Mar 31, 2011

Summary

Chipotle Mexican Grill, Inc. (CMG) reported strong performance in its first quarter of 2011, with revenue increasing by 24.3% to $509.4 million, driven by both new restaurant openings and a significant 12.4% increase in comparable restaurant sales, primarily due to higher customer visits. Net income rose to $46.4 million, translating to diluted earnings per share of $1.46, up from $1.19 in the prior year quarter. The company demonstrated effective cost management, with labor and occupancy costs decreasing as a percentage of revenue, despite an increase in food, beverage, and packaging costs due to inflation and "Food With Integrity" initiatives. Management anticipates continued food cost pressures and plans menu price increases in the third quarter of 2011. Chipotle also continued its share repurchase program, acquiring $13.5 million in stock during the quarter, and maintains a strong liquidity position with $387.4 million in cash and investments to fund future growth.

Key Highlights

• 1Revenue grew 24.3% to $509.4 million, fueled by a 12.4% increase in comparable restaurant sales and the opening of 12 new restaurants.
• 2Net income increased to $46.4 million, with diluted EPS rising to $1.46 from $1.19 in the prior year quarter.
• 3Food, beverage, and packaging costs rose to 32.0% of revenue, primarily due to inflationary pressures on key ingredients and "Food With Integrity" initiatives.
• 4Labor costs as a percentage of revenue decreased to 24.6% due to higher average restaurant sales, offsetting wage inflation.
• 5The company repurchased $13.5 million of its common stock during the quarter under its authorized repurchase program.
• 6Chipotle ended the quarter with 1,095 restaurants and plans to open 135-145 new restaurants in 2011.
• 7The company maintains a healthy liquidity position with $387.4 million in cash and investments available for growth initiatives and other corporate needs.

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