10-QPeriod: Q2 FY2022

CHIPOTLE MEXICAN GRILL INC Quarterly Report for Q2 Ended Jun 30, 2022

Filed July 27, 2022For Securities:CMG

Summary

Chipotle Mexican Grill (CMG) reported solid results for the second quarter and first half of 2022, demonstrating resilience despite inflationary pressures. Total revenue increased by 17.0% year-over-year to $2.2 billion for the quarter, driven by a 10.1% increase in comparable restaurant sales, a result of menu price increases and a recovery in in-restaurant dining. The company continues to expand its physical footprint, opening 42 new restaurants in the quarter, with a strong emphasis on the Chipotlane format. While facing higher food costs due to inflation, Chipotle managed restaurant operating costs as a percentage of revenue to decrease slightly year-over-year, benefiting from menu price adjustments and reduced delivery expenses. Diluted earnings per share saw a significant increase of 40.2% to $9.25. The company maintained a strong liquidity position with over $1.1 billion in cash and marketable investments, and it continued its share repurchase program, signaling confidence in its financial health and future growth prospects. Investments in innovation, such as the Cultivate Next venture fund, also underscore a forward-looking strategy.

Financial Highlights

46 data points
Beta

Revenue

$2.21B

Net Income

$259.94M

11.7% Net Margin

EPS (Diluted)

$0.18

Total Assets

$6.55B

Cash & Equivalents

$520.93M

Free Cash Flow

$186.45M

Financial Statements
Beta
Revenue$2.21B
Operating Expenses$1.88B
Operating Income$337.60M
Net Income$259.94M
EPS (Basic)$0.19
EPS (Diluted)$0.18
Shares Outstanding (Basic)1.40B
Shares Outstanding (Diluted)1.40B

Key Highlights

  • 1Total revenue for Q2 2022 increased 17.0% year-over-year to $2.2 billion.
  • 2Comparable restaurant sales grew by 10.1% in Q2 2022, driven by menu price increases and a strong recovery in in-restaurant dining.
  • 3Diluted earnings per share (EPS) rose significantly by 40.2% to $9.25 in Q2 2022 compared to the prior year.
  • 4The company opened 42 new restaurants in Q2 2022, with 32 featuring the high-performing Chipotlane format.
  • 5Restaurant operating costs as a percentage of total revenue decreased slightly to 74.8% in Q2 2022, aided by menu price increases and lower delivery expenses, despite higher food costs.
  • 6Chipotle maintained a strong liquidity position with $1.1 billion in cash and marketable investments as of June 30, 2022.
  • 7The company continued its share repurchase program, with $319.7 million remaining authorization.

Frequently Asked Questions

Chipotle's total revenue increased by 17.0% to $2.2 billion in the second quarter of 2022, compared to $1.9 billion in the same period of 2021. This growth was primarily driven by a 10.1% increase in comparable restaurant sales and the opening of new restaurants.

Comparable restaurant sales increased by 10.1% due to a combination of menu price increases and a rise in overall transactions. The resurgence of in-restaurant dining, following the relaxation of COVID-19 related restrictions, was a significant contributor, partially offset by a decrease in group size.

Chipotle experienced higher food costs due to inflationary pressures. However, the company was able to keep food, beverage, and packaging costs flat as a percentage of total revenue for the quarter by implementing menu price increases and benefiting from lower delivery expenses. For the six-month period, these costs increased slightly as a percentage of revenue.

Chipotle continues to be optimistic about its long-term growth potential, aiming to more than double the number of restaurants in North America. In the second quarter of 2022, they opened 42 new restaurants, with 32 of these featuring the 'Chipotlane' drive-thru pickup format, which has been performing well and contributing to increased sales, margins, and returns.