10-QPeriod: Q1 FY2023

CHIPOTLE MEXICAN GRILL INC Quarterly Report for Q1 Ended Mar 31, 2023

Filed April 27, 2023For Securities:CMG

Summary

Chipotle Mexican Grill Inc. (CMG) reported a strong first quarter for 2023, with total revenue increasing by 17.2% to $2.4 billion, driven by a 10.9% increase in comparable restaurant sales. This growth was primarily attributed to menu price increases and higher transaction volumes. Diluted earnings per share saw a significant jump of 87.8% to $10.50, reflecting improved operational efficiencies and sales leverage. The company continues to expand its footprint, opening 41 new restaurants, 34 of which feature Chipotlanes, and remains on track with its full-year expansion goals. Financially, CMG demonstrated robust operating cash flow generation, totaling $455.0 million, and maintained a healthy cash and investment balance of $1.4 billion (excluding restricted and non-marketable investments). The company also continued its share repurchase program, utilizing $193.9 million in financing activities for repurchases and tax withholdings. Management expressed confidence in the company's ability to meet future capital expenditures and working capital needs, expecting positive cash flow to continue.

Financial Highlights

46 data points
Beta

Revenue

$2.37B

Net Income

$291.64M

12.3% Net Margin

EPS (Diluted)

$0.21

Total Assets

$7.05B

Cash & Equivalents

$409.73M

Free Cash Flow

$334.67M

Financial Statements
Beta
Revenue$2.37B
Operating Expenses$2.00B
Operating Income$367.61M
Net Income$291.64M
EPS (Basic)$0.21
EPS (Diluted)$0.21
Shares Outstanding (Basic)1.38B
Shares Outstanding (Diluted)1.39B

Key Highlights

  • 1Total revenue grew 17.2% year-over-year to $2.4 billion in Q1 2023.
  • 2Comparable restaurant sales increased by 10.9%, driven by menu price increases and higher transactions.
  • 3Diluted Earnings Per Share (EPS) rose significantly by 87.8% to $10.50.
  • 4The company opened 41 new restaurants, with 34 featuring Chipotlanes, and plans to open 255-285 new restaurants in 2023.
  • 5Operating cash flow was strong at $455.0 million, an increase from the prior year.
  • 6The company ended the quarter with a substantial cash and investment balance of $1.4 billion.
  • 7Digital sales represented 39.3% of food and beverage revenue, a slight decrease from 41.9% in the prior year, indicating a shift back to in-restaurant dining.

Frequently Asked Questions

Chipotle's revenue growth of 17.2% to $2.4 billion was primarily driven by a 10.9% increase in comparable restaurant sales. This was largely due to menu price increases and, to a lesser extent, higher transaction volumes. New restaurant openings also contributed to the overall revenue increase.

Profitability improved significantly. Diluted earnings per share increased by 87.8% to $10.50. This improvement was supported by strong sales leverage, efficient restaurant operating costs (which decreased as a percentage of revenue), and benefits from menu price increases. The effective income tax rate increased to 22.5% from 16.7% in the prior year due to fewer tax benefits from option exercises and equity vesting.

Chipotle continues its expansion strategy, opening 41 new restaurants in the first quarter, with 34 of those featuring Chipotlanes. The company remains on track to open approximately 255-285 new restaurants in 2023, with at least 80% expected to include a Chipotlane.

Chipotle maintained a strong liquidity position with $1.4 billion in cash and investments as of March 31, 2023. Operating activities generated $455.0 million in cash. The company is prioritizing capital for new restaurant development, share repurchases (with $282.3 million remaining authorization), and existing restaurant investments. Management expects to generate positive cash flow for the foreseeable future.