Summary
Chipotle Mexican Grill, Inc. (CMG) reported solid financial results for the second quarter and first half of 2019, demonstrating robust revenue growth driven by strong comparable restaurant sales increases and a significant rise in digital/out-of-restaurant orders. The company has successfully implemented new accounting standards for leases, which have impacted the balance sheet by introducing significant operating lease assets and liabilities. Despite increased costs in food, beverage, and packaging, along with higher general and administrative expenses due to legal provisions and stock-based compensation, Chipotle maintained operational leverage, with restaurant operating costs as a percentage of revenue decreasing. The company also provided an optimistic outlook for full-year comparable restaurant sales and continued its new restaurant development plans. Investors will likely note the company's ongoing share repurchase program and its commitment to enhancing digital capabilities.
Financial Highlights
46 data points| Revenue | $1.43B |
| Operating Expenses | $1.31B |
| Operating Income | $120.02M |
| Net Income | $91.03M |
| EPS (Basic) | $0.07 |
| EPS (Diluted) | $0.06 |
| Shares Outstanding (Basic) | 1.39B |
| Shares Outstanding (Diluted) | 1.42B |
Key Highlights
- 1Revenue increased by 13.2% for the three months ended June 30, 2019, and 13.6% for the six months ended June 30, 2019, compared to the prior year periods.
- 2Comparable restaurant sales increased by 10.0% for both the three and six-month periods ended June 30, 2019.
- 3Sales from out-of-restaurant orders more than doubled, reaching 17.1% of total revenue for the six months ended June 30, 2019, up from 9.7% in the prior year period.
- 4The company adopted new lease accounting standards (ASC Topic 842) effective January 1, 2019, resulting in the recognition of significant operating lease assets ($2.37 billion) and liabilities ($2.70 billion) on the balance sheet.
- 5General and administrative expenses saw a significant increase, particularly driven by higher provisions for legal proceedings and increased stock-based compensation expense.
- 6Chipotle opened 20 new restaurants in the second quarter of 2019 and anticipates opening 140-155 new restaurants for the full year 2019.
- 7The company announced an additional $100 million share repurchase authorization on July 23, 2019, adding to its ongoing commitment to returning capital to shareholders.