Summary
Chipotle Mexican Grill, Inc. (CMG) reported strong financial performance for the second quarter and first half of 2014. Revenue saw significant year-over-year growth, driven by comparable restaurant sales increases and the opening of new locations. The company successfully implemented menu price increases, which contributed to both revenue and average check size, while also experiencing a decrease in labor and occupancy costs as a percentage of revenue due to higher sales. Investments in marketing and a rise in general and administrative expenses, particularly due to stock-based compensation, were noted. The company continued its aggressive expansion, opening 89 new restaurants in the first half of the year and planning for further growth. Despite some supply constraints for "Responsibly Raised" meats, Chipotle is committed to its "Food With Integrity" initiative. Financially, the company maintained a healthy cash position and continued its share repurchase program. Management expressed confidence in continued growth, projecting mid-teen comparable restaurant sales increases for the full year.
Financial Highlights
42 data points| Operating Expenses | $870.23M |
| Operating Income | $179.84M |
| Net Income | $110.27M |
| EPS (Basic) | $0.07 |
| EPS (Diluted) | $0.07 |
| Shares Outstanding (Basic) | 1.55B |
| Shares Outstanding (Diluted) | 1.57B |
Key Highlights
- 1Revenue increased by 28.6% in the second quarter and 26.6% in the first half of 2014 compared to the prior year.
- 2Comparable restaurant sales increased by 17.3% in Q2 2014 and 15.5% in the first six months of 2014, driven by customer visits and menu price increases.
- 3Opened 89 new restaurants in the first six months of 2014, bringing the total to 1,681, with plans to open 180-195 new restaurants in 2014.
- 4Net income grew to $110.3 million in Q2 2014 and $193.3 million in the first half of 2014, up from $87.9 million and $164.4 million, respectively, in the prior year.
- 5Diluted EPS rose to $3.50 in Q2 2014 and $6.14 in the first half of 2014, compared to $2.82 and $5.27, respectively.
- 6The company repurchased $50.3 million of its common stock in the first six months of 2014, with $139.9 million remaining under authorized repurchase programs.
- 7Food costs as a percentage of revenue increased due to inflationary pressures on key ingredients, though menu price increases are expected to mitigate this in the latter half of the year.