Summary
Chipotle Mexican Grill, Inc. (CMG) reported its third-quarter 2016 results, reflecting a challenging period marked by ongoing impacts from food safety incidents in late 2015 and early 2016. Revenue declined by 14.8% year-over-year to $1.037 billion, driven by a significant 21.9% decrease in comparable restaurant sales, largely due to a 15.2% drop in transaction volume. Net income saw a substantial decrease to $7.8 million from $144.9 million in the prior year's quarter, resulting in diluted earnings per share of $0.27, down from $4.59. Despite the revenue downturn, the company is implementing recovery strategies, including increased marketing spend and the "Chiptopia Summer Rewards" program, which showed some improvement in comparable sales trends during the quarter. The company also continued its restaurant development, opening 55 new locations in the quarter. Management provided an outlook for 2017 targeting high single-digit comparable restaurant sales increases and a focus on cost efficiencies. Significant share repurchases continued, underscoring a commitment to returning capital to shareholders.
Financial Highlights
44 data points| Operating Expenses | $1.03B |
| Operating Income | $9.73M |
| Net Income | $7.80M |
| EPS (Basic) | $0.01 |
| EPS (Diluted) | $0.01 |
| Shares Outstanding (Basic) | 1.45B |
| Shares Outstanding (Diluted) | 1.46B |
Key Highlights
- 1Revenue declined 14.8% to $1.037 billion in Q3 2016 compared to Q3 2015.
- 2Comparable restaurant sales decreased by 21.9% in Q3 2016.
- 3Net income fell sharply to $7.8 million from $144.9 million in Q3 2015.
- 4Diluted EPS dropped to $0.27 from $4.59 in the prior year's quarter.
- 5The company incurred a $14.5 million impairment charge related to its ShopHouse restaurants.
- 6Chipotle opened 55 new restaurants in Q3 2016, with 171 opened year-to-date.
- 7The company repurchased approximately $171.8 million worth of its common stock in Q3 2016.