10-QPeriod: Q1 FY2024

CHIPOTLE MEXICAN GRILL INC Quarterly Report for Q1 Ended Mar 31, 2024

Filed April 25, 2024For Securities:CMG

Summary

Chipotle Mexican Grill, Inc. (CMG) reported a strong first quarter for 2024, demonstrating robust top-line growth and improved profitability. Total revenue increased by 14.1% year-over-year to $2.7 billion, driven by a 7.0% increase in comparable restaurant sales, largely attributable to higher transaction volumes. Diluted earnings per share saw a significant rise of 23.9% to $13.01, reflecting effective cost management and sales leverage, despite increased wage inflation. The company continues its strategic expansion, opening 47 new restaurants in the quarter, with a focus on Chipotlanes, and remains on track to open 285-315 new locations in 2024. Financially, CMG maintained a strong balance sheet with substantial cash and investment balances. Operating cash flow increased significantly, supporting capital expenditures for new restaurant development and share repurchases. While facing inflationary pressures, particularly in labor costs (notably in California following a minimum wage increase), Chipotle effectively managed its restaurant operating costs as a percentage of revenue, which decreased year-over-year. The company's investment in innovation, such as its Cultivate Next Fund, and its focus on digital channels, which constituted 36.5% of food and beverage revenue, underscore its commitment to sustained growth and operational excellence.

Financial Highlights

46 data points
Beta

Revenue

$2.70B

Net Income

$359.29M

13.3% Net Margin

EPS (Diluted)

$0.26

Total Assets

$8.41B

Cash & Equivalents

$727.39M

Free Cash Flow

$436.53M

Financial Statements
Beta
Revenue$2.70B
Operating Expenses$2.26B
Operating Income$441.29M
Net Income$359.29M
EPS (Basic)$0.26
EPS (Diluted)$0.26
Shares Outstanding (Basic)1.37B
Shares Outstanding (Diluted)1.38B

Key Highlights

  • 1Total revenue grew by 14.1% to $2.7 billion in Q1 2024.
  • 2Comparable restaurant sales increased by 7.0%, driven by higher transactions.
  • 3Diluted EPS rose by 23.9% to $13.01, showcasing improved profitability.
  • 4Opened 47 new restaurants, with 43 featuring Chipotlanes, and plans to open 285-315 in 2024.
  • 5Restaurant operating costs as a percentage of revenue decreased to 72.5% from 74.4% in the prior year's quarter.
  • 6Cash flow from operations increased significantly to $569.2 million.
  • 7Digital sales represented 36.5% of total food and beverage revenue.

Frequently Asked Questions

Chipotle reported a total revenue of $2.7 billion for the first quarter of 2024, a 14.1% increase year-over-year. Diluted earnings per share (EPS) also saw a substantial jump of 23.9% to $13.01, up from $10.50 in the prior year's quarter.

Comparable restaurant sales increased by 7.0% for the first quarter of 2024. This growth was primarily driven by a higher number of transactions, with a smaller contribution from an increase in average check size.

Chipotle opened 47 new restaurants in the first quarter of 2024, with a significant majority (43) featuring Chipotlanes. The company reiterated its outlook to open approximately 285-315 new restaurants in 2024, with at least 80% expected to include a Chipotlane.

Chipotle managed its restaurant operating costs effectively, reducing them as a percentage of total revenue to 72.5% from 74.4% in Q1 2023, benefiting from sales leverage. While acknowledging wage inflation, especially in California following a minimum wage increase, the company has implemented menu price adjustments in affected regions to mitigate these costs. Other operating costs also decreased as a percentage of revenue.