- Diluted EPS for the Quarter of $0.52, 37% Higher than 1st
Quarter 2007
- 28 New Restaurants Opened in the Quarter
- 10.2% Comparable Restaurant Sales Increase for the Quarter
DENVER--(BUSINESS WIRE)--April 23, 2008--Chipotle Mexican Grill,
Inc. (NYSE: CMG and CMG.B) today reported financial results for its
first quarter ended March 31, 2008.
Highlights for the first quarter of 2008 as compared to the first
quarter of 2007 include:
- Revenue increased 29.3% to $305.3 million
- Comparable restaurant sales increased 10.2%
- Restaurant level operating margins increased 50 basis points
to 21.2%
- Income from operations as a percentage of revenue increased 90
basis points to 8.8%
- Net income increased 38.9% to $17.3 million
- Diluted earnings per share increased 36.8% to $0.52
"Our commitment to invest in better ingredients, from more
sustainable sources, has continued to allow us to serve better tasting
food as we pursue our vision to change the way the world thinks about
and eats fast food," said Chipotle Founder, Chairman and CEO Steve
Ells. "Our results for the quarter demonstrate that customers continue
to be loyal to Chipotle, and that we are able to attract new customers
even in this challenging economic environment."
"By creating a culture that appeals only to the highest
performers, we are providing better service and a better restaurant
experience for our customers, while also creating greater
opportunities for the future leaders of our company," said Chipotle
President and Chief Operating Officer Monty Moran. "In turn, these
improvements to our culture also contribute to the strength of our
unit economic model and our ability to create value for our
shareholders."
First Quarter 2008 Results
Revenue for the first quarter of 2008 increased 29.3% to $305.3
million from $236.1 million in the first quarter of 2007. This growth
in revenue was attributable to new restaurants not in the comparable
base and a 10.2% increase in comparable restaurant sales in the first
quarter. Comparable restaurant sales growth was primarily due to an
increase in customer visits. Chipotle opened 28 restaurants in
existing markets during the first quarter of 2008.
Restaurant level operating margins increased to 21.2% in the first
quarter of 2008 from 20.7% in the first quarter of 2007, primarily due
to menu price increases associated with the addition of naturally
raised meats in certain markets and efficiencies in labor.
General and administrative expenses were $21.6 million in the
first quarter of 2008, or 7.1% of revenue, compared to $17.0 million
in the first quarter of 2007, or 7.2% of revenue. In the first quarter
of 2008, general and administrative expenses declined as a percentage
of revenue primarily due to the effect of economies of scale from
higher restaurant sales.
Income from operations increased to $26.8 million for the first
quarter of 2008, compared to $18.6 million in the first quarter of
2007.
The effective tax rate for the quarter was 38.4%, compared to
38.0% in the first quarter of 2007. The first quarter 2008 effective
tax rate increased due to the decline in interest rates on tax exempt
securities from the first quarter of 2007 partially offset by a lower
statutory state tax rate.
Net income for the first quarter of 2008 was $17.3 million, or
$0.52 per diluted share, compared to $12.4 million, or $0.38 per
diluted share in the first quarter of 2007.
"Given the extremely challenging operating environment, our double
digit comparable restaurant sales increase demonstrates the unique
bond we have with our customers, and our resulting margin expansion
highlights the underlying strength of our restaurant unit economics,"
said Jack Hartung, Chief Financial Officer. "We expect to open more
restaurants this year than ever before with 130 - 140 openings as well
as growing diluted earnings per share, over the long-term, at an
average annual rate of at least 25% though we continue to face
significant challenges in the near term."
Outlook
For the full year 2008, management expects the following:
- Comparable restaurant sales increases in the mid single digit
range
- 130 - 140 new restaurant openings
- An annual effective tax rate of approximately 38.5%
- Diluted weighted average common shares outstanding for the
year of approximately 33.6 million
Definitions
The following definitions apply to these terms as used throughout
this release:
Comparable restaurant sales increases include company-operated
restaurants only and represent the change in period-over-period sales
for the comparable restaurant base. A restaurant becomes comparable in
its 13th full calendar month of operation.
Average restaurant sales refers to the average trailing 12-month
sales for company-operated restaurants in operation for at least 12
full calendar months.
Restaurant level operating margin represents total revenue less
restaurant operating costs, expressed as a percent of total revenue.
New markets are defined as markets opened within the calendar
year.
Conference Call
Chipotle will host a conference call to discuss first quarter
financial results today at 5:00 PM Eastern Time. Hosting the call will
be Steve Ells, Founder, Chairman and Chief Executive Officer, Monty
Moran, President and Chief Operating Officer, and Jack Hartung, Chief
Financial Officer.
The conference call can be accessed live over the phone by dialing
1-888-599-4877 or for international callers by dialing 1-913-312-1520.
A replay will be available one hour after the call and can be accessed
by dialing 1-888-203-1112 or 1-719-457-0820 for international callers;
the password is 2045751. The replay will be available until April 30,
2008. The call will be webcast live from the Company's Web site at
www.chipotle.com under the investor relations section. An archived
webcast will be available approximately one hour after the end of the
call.
About Chipotle
Chipotle Mexican Grill offers a focused menu of burritos, tacos,
burrito bowls (a burrito without the tortilla) and salads made from
fresh, high-quality raw ingredients, prepared using classic cooking
methods and served in a distinctive atmosphere. Through our vision of
Food With Integrity, Chipotle is seeking better food not only from
using fresh ingredients, but ingredients that are sustainably grown
and naturally raised with respect for the animals, the land, and the
farmers who produce the food. Chipotle opened its first restaurant in
1993 and currently operates more than 730 restaurants. For more
information, visit www.chipotle.com.
Forward-Looking Statements
Certain statements in this press release, including statements
regarding our expectations for food costs and restaurant-level
margins, as well as statements under the heading "Outlook" and
elsewhere in the release related to our expected comparable restaurant
sales increases, our projected earnings per share growth, the number
of restaurants we intend to open, our effective tax rate, and our
expected number of diluted common shares, are forward-looking
statements as defined in the Private Securities Litigation Reform Act
of 1995. We use words such as "anticipate", "believe", "could",
"should", "estimate", "expect", "intend", "may", "predict", "project",
"target", and similar terms and phrases, including references to
assumptions, to identify forward-looking statements. The
forward-looking statements in this press release are based on
information available to us as of the date any such statements are
made and we assume no obligation to update these forward-looking
statements. These statements are subject to risks and uncertainties
that could cause actual results to differ materially from those
described in the statements. These risks and uncertainties include,
but are not limited to, the following: factors that could affect our
ability to achieve and manage our planned expansion, such as the
availability of a sufficient number of suitable new restaurant sites
and the availability of qualified employees; the uncertainty of our
ability to achieve targeted levels of comparable restaurant sales
increases; risks relating to our expansion into new markets; the risk
of food-borne illnesses and other health concerns about our food
products; changes in the availability and costs of food; changes in
consumer preferences, general economic conditions or consumer
discretionary spending; the impact of federal, state or local
government regulations relating to our employees and the sale of food
or alcoholic beverages; the impact of litigation; our ability to
protect our name and logo and other proprietary information; the
potential effects of inclement weather; the effect of competition in
the restaurant industry; risks related to our separation from
McDonald's and our having two classes of publicly-traded common stock;
and other risk factors described from time to time in our SEC reports,
including our most recent annual report on Form 10-K and subsequent
quarterly reports on Form 10-Q, all of which are available on the
Investor Relations page of our Web site at www.chipotle.com.
Chipotle Mexican Grill, Inc.
Consolidated Statement of Income
(in thousands, except per share data)
(unaudited)
Three months ended March 31,
--------------------------------------
2008 2007
------------------- ------------------
Revenue:
Restaurant sales $ 305,327 100.0% $ 235,484 99.7%
Franchise royalties and fees -- 0.0 611 0.3
---------- -------- ---------- -------
Total revenue 305,327 100.0 236,095 100.0
---------- -------- ---------- -------
Restaurant operating costs:
Food, beverage and packaging 98,894 32.4 74,671 31.6
Labor 81,410 26.7 65,454 27.7
Occupancy 21,833 7.2 17,288 7.3
Other operating costs 38,373 12.6 29,758 12..6
General and administrative
expenses 21,560 7.1 17,009 7.2
Depreciation and amortization 12,170 4.0 10,164 4.3
Pre-opening costs 2,831 0.9 1,810 0.8
Loss on disposal of assets 1,463 0.5 1,292 0.5
---------- -------- ---------- -------
278,534 91.2 217,446 92.1
---------- -------- ---------- -------
Income from operations 26,793 8.8 18,649 7.9
Interest income 1,343 0.4 1,490 0.6
Interest expense (74) -- (75) --
---------- -------- ---------- -------
Income before income taxes 28,062 9.2 20,064 8.5
Provision for income taxes (10,778) (3.5) (7,624) (3.2)
---------- -------- ---------- -------
Net income $ 17,284 5.7% $ 12,440 5.3%
========== ======== ========== =======
Earnings per share:
Basic $ 0.53 $ 0.38
========== ==========
Diluted $ 0.52 $ 0.38
========== ==========
Weighted average common shares
outstanding:
Basic 32,808 32,558
========== ==========
Diluted 33,330 32,953
========== ==========
Chipotle Mexican Grill, Inc.
Condensed Consolidated Balance Sheet
(in thousands)
(unaudited)
As of
March 31, 2008 December 31, 2007
------------------- -------------------
Total current assets $210,676 $201,844
Total assets $751,932 $722,115
Total current liabilities $75,934 $73,301
Total liabilities $170,651 $160,005
Total shareholders' equity $581,281 $562,110
Chipotle Mexican Grill, Inc.
Condensed Consolidated Statement of Cash Flows
(in thousands)
(unaudited)
Three months ended March 31,
2008 2007
-------------- --------------
Cash provided by operating
activities $48,247 $30,747
Cash used in investing activities $(12,243) $(32,670)
Cash provided by (used in)
financing activities $(18) $7,183
Chipotle Mexican Grill, Inc.
Supplemental Financial Data
(dollars in thousands)
(unaudited)
For the three months ended
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2008 2007 2007 2007 2007
-------- -------- --------- -------- --------
Number of company-
operated restaurants
opened 28 37 28 32 28
Franchise acquisitions -- -- -- 4 4
Restaurant relocations
or closures (2) (1) -- (1) --
Number of company-
operated restaurants* 730 704 668 640 605
Average restaurant
sales $1,767 $1,734 $1,708 $1,674 $1,631
Comparable restaurant
sales increases 10.2% 10.6% 12.4% 11.6% 8.3%
*All restaurants are company-operated as of June 30, 2007.
Excludes four restaurants operated by franchisees as of March 31,
2007.
CONTACT: Chipotle Mexican Grill, Inc.
Media & Investor Relations:
Chris Arnold, 303-222-5912
SOURCE: Chipotle Mexican Grill, Inc.
