FY23 EPS INCREASES OVER 38% AND COMPARABLE SALES
INCREASE 7.9% AS MARGINS EXPAND
NEWPORT
BEACH, Calif., Feb. 6, 2024
/PRNewswire/ -- Chipotle Mexican Grill, Inc. (NYSE: CMG) today
reported financial results for its fourth quarter and fiscal year
ended December 31, 2023.
Fourth quarter highlights, year over year:
- Total revenue increased 15.4% to $2.5
billion
- Comparable restaurant sales increased 8.4%
- Operating margin was 14.4%, an increase from 13.6%
- Restaurant level operating margin was
25.4%1, an increase of 140 basis points
- Diluted earnings per share was $10.21, a 27.3% increase from $8.02. Adjusted diluted earnings per share, which
excluded a $0.15 after-tax impact
from expenses related to accelerated depreciation, partially offset
by a reduction in contingencies related to certain legal
proceedings, was $10.361, a 25.0% increase from
$8.29.1
- Opened 121 new restaurants with 110 locations including
a Chipotlane
Full year 2023 highlights, year over year:
- Total revenue increased 14.3% to $9.9
billion
- Comparable restaurant sales increased 7.9%
- Operating margin was 15.8%, an increase from 13.4%
- Restaurant level operating margin was 26.2%1, an
increase of 230 basis points
- Diluted earnings per share was $44.34, a 38.4% increase from $32.04. Adjusted diluted earnings per share,
which excluded a $0.52 after-tax
impact from expenses related to restaurant and corporate level
impairment and closure costs, accelerated depreciation and
corporate restructuring, partially offset by a reduction in
contingencies related to certain legal proceedings, was
$44.861, a 36.9% increase
from $32.78.1
- Opened 271 new restaurants with 238 locations including a
Chipotlane
"2023 was an outstanding year where we delivered strong
transaction growth driven by throughput and menu innovation, opened
a record number of new restaurants, surpassed $3 million in AUVs and formed our first
international partnership," said Brian Niccol, Chairman and
CEO, Chipotle. "I am more confident than ever that we have the
right people and the right strategy to achieve our long-term growth
goals of reaching 7,000 restaurants in North America, $4
million in AUVs, expanding our industry leading margins and
returns and furthering our purpose of Cultivating a Better World
globally."
Results for the three months ended December 31, 2023:
Total revenue in the fourth quarter was $2.5 billion, an increase of 15.4% compared to
the fourth quarter of 2022. The increase in total revenue was
driven by an 8.4% increase in comparable restaurant sales
attributable to higher transactions of 7.4% and an increase in
average check of 1.0%, and to a lesser extent, new restaurant
openings. Digital sales represented 36.1% of total food and
beverage revenue.
We opened 121 new restaurants during the fourth quarter with 110
locations including a Chipotlane. These formats continue to perform
well and are helping enhance guest access and convenience, as well
as increase new restaurant sales, margins, and returns.
Food, beverage and packaging costs in the fourth quarter were
29.7% of total revenue, an increase of 40 basis points compared to
the fourth quarter of 2022. Food costs increased due to a higher
mix of beef as well as inflation across the menu, most notably
higher costs for beef, produce, and queso. These increases were
partially offset by the benefit of menu price increases and, to a
lesser extent, lower paper costs.
Restaurant level operating margin in the fourth quarter was
25.4% compared to 24.0% in the fourth quarter of 2022. The
improvement was primarily due to the benefit of sales leverage and,
to a lesser extent, lower paper costs. These decreases were
partially offset by higher inflation across several food costs and,
to a lesser extent, wage inflation.
General and administrative expenses for the fourth quarter
were $169.2 million on a GAAP basis, or $170.0
million1 on a non-GAAP basis, excluding a
$0.8 million reduction in
contingencies related to certain legal proceedings. GAAP and
non-GAAP general and administrative expenses for the fourth quarter
also include $122.0 million of
underlying general and administrative expenses, $35.7 million of non-cash stock compensation,
$10.1 million of higher bonus
accruals and payroll taxes on equity vesting and exercises and
$2.2 million of other costs,
primarily related to our upcoming All Managers Conference scheduled
for the first quarter of 2024.
The effective income tax rate for the fourth quarter was 26.2%
compared to 26.3% in the fourth quarter of 2022. The slight
decrease in the tax rate was primarily due to an increase in tax
benefits from option exercises and equity vesting, partially offset
by an increase in tax reserves and nondeductible expenses.
Net income for the fourth quarter was $282.1 million, or $10.21 per diluted share, compared to
$223.7 million, or $8.02 per diluted share, in the fourth quarter of
2022. Excluding a $0.15 after-tax
impact from expenses related to accelerated depreciation, partially
offset by a reduction in contingencies related to certain legal
proceedings, adjusted net income was $286.2
million1 and adjusted diluted earnings per share
was $10.361.
During the fourth quarter, our Board of Directors approved the
investment of up to an additional $200
million, exclusive of commissions, to repurchase shares of
our common stock, subject to market conditions. Including this
repurchase authorization, $424.1
million was available as of December
31, 2023. The repurchase authorization may be modified,
suspended, or discontinued at any time. We repurchased $144.3 million of stock at an average price per
share of $1,935.80 during the fourth
quarter.
Results for the full year ended December 31, 2023:
Total revenue for 2023 was $9.9
billion, an increase of 14.3% compared to 2022. The increase
in total revenue was driven by a 7.9% increase in comparable
restaurant sales attributable to higher transactions of 5.0% and an
increase in average check of 2.9% and, to a lesser extent, new
restaurant openings. Digital sales represented 37.4% of total food
and beverage revenue.
We opened 271 new restaurants during 2023, bringing the total
restaurant count at year-end to 3,437. Of the 271 new restaurants
opened during the year, 238 locations included a Chipotlane. We had
a total of 811 Chipotlanes as of year-end, which includes
conversions of existing restaurants.
Food, beverage and packaging costs for 2023 were 29.5% of total
revenue, a decrease of 60 basis points compared to 2022. Food costs
benefited from menu price increases and, to a lesser extent, lower
avocado costs. These benefits were partially offset by inflation
across several ingredient costs, most notably beef, tortillas, and
queso.
Restaurant level operating margin for 2023 was 26.2% compared to
23.9% in 2022. The improvement was primarily due to the benefit of
sales leverage and, to a lesser extent, lower avocado prices. These
decreases were partially offset by higher inflation across several
food costs and, to a lesser extent, wage inflation.
General and administrative expenses for 2023 were $633.6
million on a GAAP basis, or $629.6
million1 on a non-GAAP basis, excluding
$4.8 million of corporate
restructuring costs and a $0.8
million reduction in contingencies related to certain legal
proceedings. GAAP and non-GAAP General and administrative expenses
for full year 2023 also include $478.9
million of underlying general and administrative expenses,
$118.5 million of non-cash stock
compensation, $25.3 million of higher
bonus accruals and payroll taxes on equity vesting and exercises
and $6.9 million of other costs,
primarily related to our upcoming All Managers Conference scheduled
for the first quarter of 2024.
The effective income tax rate for 2023 was 24.2% compared to
23.9% in 2022. The increase in the tax rate was primarily due to
fewer tax benefits related to option exercises and equity
vesting.
Net income for 2023 was $1.23
billion, or $44.34 per diluted
share, compared to net income of $899.1
million, or $32.04 per diluted
share for 2022. Excluding a $0.52
after-tax impact from expenses related to restaurant and corporate
level impairment and closure costs, accelerated depreciation,
corporate restructuring, partially offset by a reduction in
contingencies related to certain legal proceedings, adjusted net
income for 2023 was $1.24
billion1 and adjusted diluted earnings per share
was $44.861.
During 2023 we repurchased a total of $589.8 million of stock at an average price per
share of $1,827.46.
More information will be available in our Annual Report on Form
10-K, which will be filed with the SEC in early February 2024.
Outlook
For 2024, management is anticipating the following:
- Full year comparable restaurant sales growth in the mid-single
digit range
- 285 to 315 new restaurant openings, which assumes developer,
permit, inspection, and utility delays do not worsen
- An estimated underlying effective full year tax rate between
25% and 27% before discrete items
Definitions
The following definitions apply to these terms as used
throughout this release:
- Comparable restaurant sales, or sales comps, and comparable
restaurant transactions, represent the change in
period-over-period total revenue or transactions for restaurants in
operation for at least 13 full calendar months.
- Average restaurant sales refer to the average trailing
12-month food and beverage revenue for restaurants in operation for
at least 12 full calendar months.
- Restaurant level operating margin represents total
revenue less direct restaurant operating costs, expressed as a
percent of total revenue.
- Digital sales represent food and beverage revenue
generated through the Chipotle website, Chipotle app or third-party
delivery aggregators. Digital sales include revenue deferrals
associated with Chipotle Rewards.
Conference Call Details
Chipotle will host a conference call on Tuesday, February 6, 2024, at 4:30 PM Eastern time to discuss fourth quarter
and full year 2023 financial results, as well as provide a business
update for the 2024 first quarter.
The conference call can be accessed live over the phone by
dialing 1-888-317-6003, or for international callers by dialing
1-412-317-6061, and use code: 2191312. The call will be webcast
live from the company's website on the investor relations page at
ir.chipotle.com/events. An archived webcast will be available
approximately one hour after the end of the call.
About Chipotle
Chipotle Mexican Grill, Inc. (NYSE: CMG) is cultivating a better
world by serving responsibly sourced, classically-cooked, real food
with wholesome ingredients without artificial colors, flavors or
preservatives. Chipotle had over 3,400 restaurants as of
December 31, 2023, in the United States, Canada, the United
Kingdom, France and
Germany and is the only restaurant
company of its size that owns and operates all its restaurants in
North America and Europe. Chipotle is ranked on the Fortune 500
and is recognized on Fortune's Most Admired Companies 2024 list and
Time Magazine's Most Influential Companies. With over 115,000
employees passionate about providing a great guest experience,
Chipotle is a longtime leader and innovator in the food industry.
Chipotle is committed to making its food more accessible to
everyone while continuing to be a brand with a demonstrated purpose
as it leads the way in digital, technology and sustainable business
practices. For more information or to place an order online, visit
WWW.CHIPOTLE.COM.
Forward-Looking Statements
Certain statements in this press release and in the
February 6, 2024, conference call are
forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995, including statements under "Outlook"
about our anticipated full year 2024 comparable restaurant sales
growth, goals for number of new restaurant openings, and estimated
underlying effective full year tax rate, as well as statements
about first quarter 2024 business results to date, expected
restaurants with Chipotlanes and rate of expansion, future labor
costs, future general and administrative and other costs, future
estimated tax rates and future long-term prospects. We use words
such as "anticipate", "believe", "could", "should", "may",
"approximately", "estimate", "expect", "intend", "project",
"target", "goal" 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
currently available operating, financial and competitive
information available to us as of the date of this release 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, including but not limited to: increasing wage
inflation and the competitive labor market, including as a result
of regulations such as California AB 1228, which impacts our
ability to attract and retain qualified employees and has resulted
in occasional staffing shortages; the impact of any union
organizing efforts and our responses to such efforts; increasing
supply costs (including beef, tortillas, queso, salsa, beans and
rice); risks of food safety incidents and food-borne illnesses;
risks associated with our reliance on certain information
technology systems and potential material failures or
interruptions; privacy and cyber security risks, including risk of
breaches, unauthorized access, theft, modification, destruction or
ransom of guest or employee personal or confidential information
stored on our network or the network of third party providers; the
impact of competition, including from sources outside the
restaurant industry; the financial impact of increasing our average
hourly wages; the impact of federal, state or local government
regulations relating to our employees, employment practices,
restaurant design and construction, and the sale of food or
alcoholic beverages; our ability to achieve our planned growth,
such as the costs and availability of suitable new restaurant
sites, construction materials and contractors and the expected
costs to accelerate our international expansion through franchise
restaurants in the Middle East;
increases in ingredient and other operating costs due to inflation,
global conflicts, climate change, our Food with Integrity
philosophy, tariffs or trade restrictions and supply shortages; the
uncertainty of our ability to achieve expected levels of comparable
restaurant sales due to factors such as changes in guests'
perceptions of our brand, including as a result of actual or
rumored food safety concerns or other negative publicity, decreased
consumer spending (including as a result of higher inflation, mass
layoffs, fear of possible recession and higher energy prices), or
the inability to increase menu prices or realize the benefits of
menu price increases; risks associated with our digital business,
including risks arising from our reliance on third party delivery
services; risks relating to litigation, including possible
governmental actions and potential class action litigation related
to food safety incidents, cybersecurity incidents, employment or
privacy laws, advertising claims or other matters; and other risk
factors described from time to time in our SEC reports, including
our annual report on Form 10-K and quarterly reports on Form 10-Q,
all of which are available on the investor relations page of our
website at ir.Chipotle.com.
1 Restaurant level operating margin, adjusted
diluted earnings per share, adjusted net income, non-GAAP
general and administrative expenses, adjusted depreciation and
amortization, and non-GAAP effective income tax rate are
non-GAAP financial measures. Reconciliations to GAAP measures and
further information are set forth in the table at the end of this
press release.
|
CHIPOTLE MEXICAN
GRILL, INC.
CONSOLIDATED
STATEMENTS OF INCOME
(in thousands,
except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
2023
|
|
2022
|
Food and beverage
revenue
|
$
|
2,499,567
|
|
99.3
|
%
|
|
$
|
2,163,907
|
|
99.2
|
%
|
Delivery service
revenue
|
|
16,753
|
|
0.7
|
|
|
|
16,692
|
|
0.8
|
|
Total
revenue
|
|
2,516,320
|
|
100.0
|
|
|
|
2,180,599
|
|
100.0
|
|
Restaurant operating
costs (exclusive of depreciation and amortization shown separately
below):
|
|
|
|
|
|
|
|
|
|
|
|
Food, beverage and
packaging
|
|
747,155
|
|
29.7
|
|
|
|
638,851
|
|
29.3
|
|
Labor
|
|
629,228
|
|
25.0
|
|
|
|
558,914
|
|
25.6
|
|
Occupancy
|
|
131,167
|
|
5.2
|
|
|
|
118,648
|
|
5.4
|
|
Other operating
costs
|
|
370,466
|
|
14.7
|
|
|
|
341,644
|
|
15.7
|
|
General and
administrative expenses
|
|
169,247
|
|
6.7
|
|
|
|
135,073
|
|
6.2
|
|
Depreciation and
amortization
|
|
85,492
|
|
3.4
|
|
|
|
74,012
|
|
3.4
|
|
Pre-opening
costs
|
|
13,590
|
|
0.5
|
|
|
|
11,341
|
|
0.5
|
|
Impairment, closure
costs, and asset disposals
|
|
6,528
|
|
0.3
|
|
|
|
5,785
|
|
0.3
|
|
Total operating
expenses
|
|
2,152,873
|
|
85.6
|
|
|
|
1,884,268
|
|
86.4
|
|
Income from
operations
|
|
363,447
|
|
14.4
|
|
|
|
296,331
|
|
13.6
|
|
Interest and other
income, net
|
|
18,906
|
|
0.8
|
|
|
|
7,057
|
|
0.3
|
|
Income before income
taxes
|
|
382,353
|
|
15.2
|
|
|
|
303,388
|
|
13.9
|
|
Provision for income
taxes
|
|
(100,267)
|
|
(4.0)
|
|
|
|
(79,661)
|
|
(3.7)
|
|
Net income
|
$
|
282,086
|
|
11.2
|
%
|
|
$
|
223,727
|
|
10.3
|
%
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
10.28
|
|
|
|
|
$
|
8.08
|
|
|
|
Diluted
|
$
|
10.21
|
|
|
|
|
$
|
8.02
|
|
|
|
Weighted-average common
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
27,440
|
|
|
|
|
|
27,684
|
|
|
|
Diluted
|
|
27,621
|
|
|
|
|
|
27,899
|
|
|
|
CHIPOTLE MEXICAN
GRILL, INC.
CONSOLIDATED
STATEMENTS OF INCOME
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December
31,
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Food and beverage
revenue
|
$
|
9,804,124
|
|
99.3
|
%
|
|
$
|
8,558,001
|
|
99.1
|
%
|
Delivery service
revenue
|
|
67,525
|
|
0.7
|
|
|
|
76,651
|
|
0.9
|
|
Total
revenue
|
|
9,871,649
|
|
100.0
|
|
|
|
8,634,652
|
|
100.0
|
|
Restaurant operating
costs (exclusive of depreciation and amortization shown separately
below):
|
|
|
|
|
|
|
|
|
|
|
|
Food, beverage and
packaging
|
|
2,912,564
|
|
29.5
|
|
|
|
2,602,245
|
|
30.1
|
|
Labor
|
|
2,440,982
|
|
24.7
|
|
|
|
2,197,958
|
|
25.5
|
|
Occupancy
|
|
503,264
|
|
5.1
|
|
|
|
460,425
|
|
5.3
|
|
Other operating
costs
|
|
1,428,747
|
|
14.5
|
|
|
|
1,311,905
|
|
15.2
|
|
General and
administrative expenses
|
|
633,584
|
|
6.4
|
|
|
|
564,191
|
|
6.5
|
|
Depreciation and
amortization
|
|
319,394
|
|
3.2
|
|
|
|
286,826
|
|
3.3
|
|
Pre-opening
costs
|
|
36,931
|
|
0.4
|
|
|
|
29,560
|
|
0.3
|
|
Impairment, closure
costs, and asset disposals
|
|
38,370
|
|
0.4
|
|
|
|
21,139
|
|
0.2
|
|
Total operating
expenses
|
|
8,313,836
|
|
84.2
|
|
|
|
7,474,249
|
|
86.6
|
|
Income from
operations
|
|
1,557,813
|
|
15.8
|
|
|
|
1,160,403
|
|
13.4
|
|
Interest and other
income, net
|
|
62,693
|
|
0.6
|
|
|
|
21,128
|
|
0.2
|
|
Income before income
taxes
|
|
1,620,506
|
|
16.4
|
|
|
|
1,181,531
|
|
13.7
|
|
Provision for income
taxes
|
|
(391,769)
|
|
(4.0)
|
|
|
|
(282,430)
|
|
(3.3)
|
|
Net income
|
$
|
1,228,737
|
|
12.4
|
%
|
|
$
|
899,101
|
|
10.4
|
%
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
44.59
|
|
|
|
|
$
|
32.28
|
|
|
|
Diluted
|
$
|
44.34
|
|
|
|
|
$
|
32.04
|
|
|
|
Weighted-average common
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
27,555
|
|
|
|
|
|
27,851
|
|
|
|
Diluted
|
|
27,710
|
|
|
|
|
|
28,062
|
|
|
|
CHIPOTLE MEXICAN
GRILL, INC.
CONSOLIDATED BALANCE
SHEETS
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
December
31,
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
560,609
|
|
$
|
384,000
|
Accounts receivable,
net
|
|
115,535
|
|
|
106,880
|
Inventory
|
|
39,309
|
|
|
35,668
|
Prepaid expenses and
other current assets
|
|
117,462
|
|
|
86,412
|
Income tax
receivable
|
|
52,960
|
|
|
47,741
|
Investments
|
|
734,838
|
|
|
515,136
|
Total current
assets
|
|
1,620,713
|
|
|
1,175,837
|
Leasehold improvements,
property and equipment, net
|
|
2,170,038
|
|
|
1,951,147
|
Long-term
investments
|
|
564,488
|
|
|
388,055
|
Restricted
cash
|
|
25,554
|
|
|
24,966
|
Operating lease
assets
|
|
3,578,548
|
|
|
3,302,402
|
Other assets
|
|
63,082
|
|
|
63,158
|
Goodwill
|
|
21,939
|
|
|
21,939
|
Total assets
|
$
|
8,044,362
|
|
$
|
6,927,504
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
197,646
|
|
$
|
184,566
|
Accrued payroll and
benefits
|
|
227,537
|
|
|
170,456
|
Accrued
liabilities
|
|
147,688
|
|
|
147,539
|
Unearned
revenue
|
|
209,680
|
|
|
183,071
|
Current operating
lease liabilities
|
|
248,074
|
|
|
236,248
|
Total current
liabilities
|
|
1,030,625
|
|
|
921,880
|
Long-term operating
lease liabilities
|
|
3,803,551
|
|
|
3,495,162
|
Deferred income tax
liabilities
|
|
89,109
|
|
|
98,623
|
Other
liabilities
|
|
58,870
|
|
|
43,816
|
Total
liabilities
|
|
4,982,155
|
|
|
4,559,481
|
Shareholders'
equity:
|
|
|
|
|
|
Preferred stock, $0.01
par value, 600,000 shares authorized, no shares issued as of
December
31, 2023 and December 31, 2022, respectively
|
|
-
|
|
|
-
|
Common stock, $0.01
par value, 230,000 shares authorized, 37,483 and 37,320 shares
issued as
of December 31, 2023 and December 31, 2022, respectively
|
|
375
|
|
|
373
|
Additional paid-in
capital
|
|
1,956,160
|
|
|
1,829,304
|
Treasury stock, at
cost, 10,057 and 9,693 common shares as of December 31, 2023
and
December 31, 2022, respectively
|
|
(4,944,656)
|
|
|
(4,282,014)
|
Accumulated other
comprehensive loss
|
|
(6,657)
|
|
|
(7,888)
|
Retained
earnings
|
|
6,056,985
|
|
|
4,828,248
|
Total shareholders'
equity
|
|
3,062,207
|
|
|
2,368,023
|
Total liabilities and
shareholders' equity
|
$
|
8,044,362
|
|
$
|
6,927,504
|
CHIPOTLE MEXICAN
GRILL, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in
thousands)
|
|
|
|
|
|
|
|
Year ended December
31,
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
|
Operating
activities
|
|
|
|
|
|
Net income
|
$
|
1,228,737
|
|
$
|
899,101
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
319,394
|
|
|
286,826
|
Deferred income tax
provision
|
|
(9,505)
|
|
|
(43,195)
|
Impairment, closure
costs, and asset disposals
|
|
37,025
|
|
|
20,738
|
Provision for credit
losses
|
|
1,570
|
|
|
(760)
|
Stock-based
compensation expense
|
|
124,016
|
|
|
98,030
|
Other
|
|
(13,080)
|
|
|
(16,202)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
Accounts
receivable
|
|
(11,216)
|
|
|
(14,026)
|
Inventory
|
|
(3,649)
|
|
|
(3,011)
|
Prepaid expenses and
other current assets
|
|
(39,211)
|
|
|
(14,660)
|
Operating lease
assets
|
|
254,241
|
|
|
234,273
|
Other
assets
|
|
4,204
|
|
|
(346)
|
Accounts
payable
|
|
5,313
|
|
|
18,208
|
Accrued payroll and
benefits
|
|
57,048
|
|
|
9,864
|
Accrued
liabilities
|
|
3,188
|
|
|
(27,964)
|
Unearned
revenue
|
|
35,685
|
|
|
33,374
|
Income tax
payable/receivable
|
|
(5,237)
|
|
|
46,262
|
Operating lease
liabilities
|
|
(214,477)
|
|
|
(207,186)
|
Other long-term
liabilities
|
|
9,431
|
|
|
3,853
|
Net cash provided by
operating activities
|
|
1,783,477
|
|
|
1,323,179
|
Investing
activities
|
|
|
|
|
|
Purchases of leasehold
improvements, property and equipment
|
|
(560,731)
|
|
|
(479,164)
|
Purchases of
investments
|
|
(1,115,131)
|
|
|
(614,416)
|
Maturities of
investments
|
|
729,853
|
|
|
263,548
|
Net cash used in
investing activities
|
|
(946,009)
|
|
|
(830,032)
|
Financing
activities
|
|
|
|
|
|
Acquisition of treasury
stock
|
|
(592,349)
|
|
|
(830,140)
|
Tax withholding on
stock-based compensation awards
|
|
(69,146)
|
|
|
(98,970)
|
Other financing
activities
|
|
843
|
|
|
(294)
|
Net cash used in
financing activities
|
|
(660,652)
|
|
|
(929,404)
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
|
381
|
|
|
(1,007)
|
Net change in cash,
cash equivalents, and restricted cash
|
|
177,197
|
|
|
(437,264)
|
Cash, cash equivalents,
and restricted cash at beginning of year
|
|
408,966
|
|
|
846,230
|
Cash, cash equivalents,
and restricted cash at end of year
|
$
|
586,163
|
|
$
|
408,966
|
Supplemental
disclosures of cash flow information
|
|
|
|
|
|
Income taxes
paid
|
$
|
400,229
|
|
$
|
275,796
|
Purchases of leasehold
improvements, property and equipment accrued in accounts payable
and
accrued liabilities
|
$
|
76,415
|
|
$
|
72,021
|
Acquisition of treasury
stock accrued in accounts payable and accrued
liabilities
|
$
|
5,643
|
|
$
|
4,497
|
CHIPOTLE MEXICAN
GRILL, INC.
SUPPLEMENTAL
FINANCIAL AND OTHER DATA
(dollars in
thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
|
Dec.
31,
|
|
Sep.
30,
|
|
Jun.
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
|
2023
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
Number of restaurants
opened
|
|
|
121
|
|
|
62
|
|
|
47
|
|
|
41
|
|
|
100
|
Chipotle permanent
closures
|
|
|
(2)
|
|
|
(1)
|
|
|
-
|
|
|
-
|
|
|
-
|
Chipotle
relocations
|
|
|
(3)
|
|
|
(2)
|
|
|
(3)
|
|
|
(4)
|
|
|
(3)
|
Non-Chipotle permanent
closures
|
|
|
-
|
|
|
(6)
|
|
|
-
|
|
|
-
|
|
|
-
|
Number of restaurants
at end of period
|
|
|
3,437
|
|
|
3,321
|
|
|
3,268
|
|
|
3,224
|
|
|
3,187
|
Average restaurant
sales
|
|
$
|
3,018
|
|
$
|
2,972
|
|
$
|
2,941
|
|
$
|
2,892
|
|
$
|
2,824
|
Comparable restaurant
sales increase
|
|
|
8.4 %
|
|
|
5.0 %
|
|
|
7.4 %
|
|
|
10.9 %
|
|
|
5.6 %
|
CHIPOTLE MEXICAN GRILL,
INC.
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
The following tables provide a reconciliation of non-GAAP
financial measures presented in the text above to the most directly
comparable financial measures calculated and presented in
accordance with GAAP.
Adjusted net income is net income excluding expenses related to
restaurant and corporate asset impairment, corporate restructuring,
certain legal proceedings, stock-based compensation modification
expense, unrealized gains on equity investments, separation costs,
accelerated depreciation and certain other costs. Adjusted general
and administrative expense is general and administrative expense
excluding corporate restructuring expenses, certain legal
proceedings, stock-based compensation modification expense,
separation costs, and certain other costs. Adjusted depreciation
and amortization is depreciation and amortization expense excluding
certain accelerated depreciation expense. The adjusted effective
income tax rate is the effective income tax rate adjusted to
reflect the after tax impact of non-GAAP adjustments. Restaurant
Level Operating Margin, a non-GAAP financial measure, is equal to
the revenues generated by our restaurants less their direct
operating costs which consist of food, beverage and packaging,
labor, occupancy and other operating costs. This performance
measure primarily includes the costs that restaurant level managers
can directly control and excludes other costs that are essential to
conduct our business. Management uses restaurant level operating
margin as a measure of restaurant performance. Management believes
restaurant level operating margin is useful to investors in that it
highlights trends in our core business that may not otherwise be
apparent to investors when relying solely on GAAP financial
measures. We present these non-GAAP measures in order to facilitate
meaningful evaluation of our operating performance across periods.
These adjustments are intended to provide greater transparency of
underlying performance and to allow investors to evaluate our
business on the same basis as our management, which uses these
non-GAAP measures in evaluating the company's performance. Our
adjusted net income, adjusted diluted earnings per share, adjusted
general and administrative expenses, adjusted effective income tax
rate and restaurant level operating margin measures may not be
comparable to other companies' adjusted measures. These adjustments
are not necessarily indicative of what our actual financial
performance would have been during the periods presented and should
be viewed in addition to, and not as an alternative to, our results
prepared in accordance with GAAP. Further details regarding these
adjustments are included in the tables below.
CHIPOTLE MEXICAN
GRILL, INC.
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
Adjusted Net Income
and Adjusted Diluted Earnings per Share
(in thousands,
except per share amounts)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
December
31,
|
|
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income
|
$
|
282,086
|
|
$
|
223,727
|
|
$
|
1,228,737
|
|
$
|
899,101
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and exit
costs:
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant asset
impairment and other restaurant exit costs(1)
|
|
-
|
|
|
-
|
|
|
4,765
|
|
|
1,738
|
Corporate asset
impairment(2)
|
|
-
|
|
|
-
|
|
|
3,735
|
|
|
961
|
Corporate
Restructuring:
|
|
|
|
|
|
|
|
|
|
|
|
Duplicate rent
expense(3)
|
|
-
|
|
|
881
|
|
|
-
|
|
|
3,937
|
Employee related and
other restructuring costs(4)
|
|
-
|
|
|
-
|
|
|
4,829
|
|
|
-
|
Legal
proceedings(5)
|
|
(797)
|
|
|
3,718
|
|
|
(797)
|
|
|
9,516
|
Stock-based
compensation modification expense(6)
|
|
-
|
|
|
1,117
|
|
|
-
|
|
|
7,411
|
Unrealized gain on
equity investments(7)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(10,410)
|
Separation
costs(8)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
3,538
|
Accelerated
depreciation(9)
|
|
6,388
|
|
|
-
|
|
|
6,388
|
|
|
-
|
Total non-GAAP
adjustments
|
$
|
5,591
|
|
$
|
5,716
|
|
$
|
18,920
|
|
$
|
16,691
|
Tax effect of non-GAAP
adjustments above(10)
|
|
(1,495)
|
|
|
1,951
|
|
|
(4,607)
|
|
|
4,003
|
After tax impact of
non-GAAP adjustments
|
$
|
4,096
|
|
$
|
7,667
|
|
$
|
14,313
|
|
$
|
20,694
|
Adjusted net
income
|
$
|
286,182
|
|
$
|
231,394
|
|
$
|
1,243,050
|
|
$
|
919,795
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted-average number of common shares outstanding
|
|
27,621
|
|
|
27,899
|
|
|
27,710
|
|
|
28,062
|
Diluted earnings per
share
|
$
|
10.21
|
|
$
|
8.02
|
|
$
|
44.34
|
|
$
|
32.04
|
Adjusted diluted
earnings per share
|
$
|
10.36
|
|
$
|
8.29
|
|
$
|
44.86
|
|
$
|
32.78
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Operating lease
asset and leasehold improvements, property, plant and equipment
impairment charges and other expenses for
restaurants due to closures, relocations, or
underperformance.
|
(2) Operating lease
asset and leasehold improvements, property, plant and equipment
impairment charges and other expenses for
offices or other corporate assets.
|
(3) Duplicate rent
expense for the corporate headquarter relocation and office
consolidation announced in May 2018.
|
(4) Charges for
third-party vendors, stock-based compensation, and employee
severance related to the May 2023 optimization of
our organizational structure.
|
(5) Charges/(reduction)
for estimated settlements for distinct legal matters that exceeded
or are expected to exceed typical costs for
these types of legal proceedings.
|
(6) Charges for a
COVID-19 related modification made in December 2020 to our 2018
performance shares.
|
(7) Unrealized gain on
equity investments based on a subsequent investment by an unrelated
party in one of our investees, which
subsequent investment represents an observable price change in an
orderly transaction for a similar investment of the same
issuer.
|
(8) Expenses related to
an employee separation, which consist of incremental compensation
costs net of forfeitures of stock-based
compensation.
|
(9) Accelerated
depreciation due to a reduction of the estimated useful lives for
certain leasehold improvements.
|
(10) Adjustments relate
to the tax effect of non-GAAP adjustments, which were determined
based on the nature of the underlying
non-GAAP adjustments and their relevant jurisdictional tax
rates.
|
CHIPOTLE MEXICAN
GRILL, INC.
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
Adjusted General and
Administrative Expenses
(in
thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
December
31,
|
|
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
General and
administrative expenses
|
$
|
169,247
|
|
$
|
135,073
|
|
$
|
633,584
|
|
$
|
564,191
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
expense(1)
|
|
-
|
|
|
(881)
|
|
|
(4,829)
|
|
|
(3,937)
|
Legal
proceedings(2)
|
|
797
|
|
|
(3,718)
|
|
|
797
|
|
|
(9,516)
|
Stock-based
compensation modification expense(3)
|
|
-
|
|
|
(1,117)
|
|
|
-
|
|
|
(7,411)
|
Separation
costs(4)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(3,538)
|
Total non-GAAP
adjustments
|
$
|
797
|
|
$
|
(5,716)
|
|
$
|
(4,032)
|
|
$
|
(24,402)
|
Adjusted general and
administrative expenses
|
$
|
170,044
|
|
$
|
129,357
|
|
$
|
629,552
|
|
$
|
539,789
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the year ended
December 31, 2023, third-party vendor expense, stock-based
compensation, and employee severance related to
the May 2023 optimization of our organizational structure. For the
three months and year ended December 31, 2022, charges relate
to
duplicate rent expense for office and restaurant closures announced
in June 2018 due to the corporate restructuring and
underperformance
of $881 and $3,937, respectively.
|
(2) Charges/(reduction)
for estimated settlements for distinct legal matters that exceeded
or are expected to exceed typical costs for these
types of legal proceedings.
|
(3) Charges for a
COVID-19 related modification made in December 2020 to our 2018
performance shares.
|
(4) Expenses related to
an employee separation, which consisted of incremental compensation
costs net of forfeitures of stock-based
compensation.
|
CHIPOTLE MEXICAN
GRILL, INC.
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
Adjusted
Depreciation and Amortization
(in
thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
December
31,
|
|
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Depreciation and
amortization
|
$
|
85,492
|
|
$
|
74,012
|
|
$
|
319,394
|
|
$
|
286,826
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated
depreciation(1)
|
|
(6,388)
|
|
|
-
|
|
|
(6,388)
|
|
|
-
|
Total non-GAAP
adjustments
|
$
|
(6,388)
|
|
$
|
-
|
|
$
|
(6,388)
|
|
$
|
-
|
Adjusted depreciation
and amortization
|
$
|
79,104
|
|
$
|
74,012
|
|
$
|
313,006
|
|
$
|
286,826
|
Adjusted depreciation
and amortization as a percent of total revenue
|
|
3.1 %
|
|
|
3.4 %
|
|
|
3.2 %
|
|
|
3.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Accelerated
depreciation due to a reduction of the estimated useful lives for
certain leasehold improvements.
|
CHIPOTLE MEXICAN
GRILL, INC.
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
Adjusted Effective
Income Tax Rate
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
December
31,
|
|
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Effective income tax
rate
|
26.2
|
%
|
|
26.3
|
%
|
|
24.2
|
%
|
|
23.9
|
%
|
Tax impact of non-GAAP
adjustments(1)
|
-
|
|
|
(1.2)
|
|
|
-
|
|
|
(0.7)
|
|
Adjusted effective
income tax rate
|
26.2
|
%
|
|
25.1
|
%
|
|
24.2
|
%
|
|
23.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjustments related
to the tax effect of non-GAAP adjustments, which were determined
based on the nature of the underlying non-
GAAP adjustments and their relevant jurisdictional tax
rates.
|
CHIPOTLE MEXICAN
GRILL, INC.
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
Restaurant Level
Operating Margin
(in
thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
2023
|
|
Percent of
total revenue
|
|
2022
|
|
Percent of
total revenue
|
Income from
operations
|
$
|
363,447
|
|
14.4
|
%
|
|
$
|
296,331
|
|
13.6
|
%
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative expenses
|
|
169,247
|
|
6.7
|
|
|
|
135,073
|
|
6.2
|
|
Depreciation and
amortization
|
|
85,492
|
|
3.4
|
|
|
|
74,012
|
|
3.4
|
|
Pre-opening
costs
|
|
13,590
|
|
0.5
|
|
|
|
11,341
|
|
0.5
|
|
Impairment, closure
costs, and asset disposals
|
|
6,528
|
|
0.3
|
|
|
|
5,785
|
|
0.3
|
|
Total non-GAAP
Adjustments
|
$
|
274,857
|
|
10.9
|
%
|
|
$
|
226,211
|
|
10.4
|
%
|
Restaurant level
operating margin
|
$
|
638,304
|
|
25.4
|
%
|
|
$
|
522,542
|
|
24.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December
31,
|
|
2023
|
|
Percent of
total revenue
|
|
2022
|
|
Percent of
total revenue
|
Income from
operations
|
$
|
1,557,813
|
|
15.8
|
%
|
|
$
|
1,160,403
|
|
13.4
|
%
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative expenses
|
|
633,584
|
|
6.4
|
|
|
|
564,191
|
|
6.5
|
|
Depreciation and
amortization
|
|
319,394
|
|
3.2
|
|
|
|
286,826
|
|
3.3
|
|
Pre-opening
costs
|
|
36,931
|
|
0.4
|
|
|
|
29,560
|
|
0.3
|
|
Impairment, closure
costs, and asset disposals
|
|
38,370
|
|
0.4
|
|
|
|
21,139
|
|
0.2
|
|
Total non-GAAP
Adjustments
|
$
|
1,028,279
|
|
10.4
|
%
|
|
$
|
901,716
|
|
10.4
|
%
|
Restaurant level
operating margin
|
$
|
2,586,092
|
|
26.2
|
%
|
|
$
|
2,062,119
|
|
23.9
|
%
|
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SOURCE Chipotle Mexican Grill, Inc.