COMPARABLE SALES INCREASE 11% DRIVEN BY OVER 8%
TRANSACTION GROWTH AS MARGINS EXPAND
NEWPORT
BEACH, Calif., July 24,
2024 /PRNewswire/ -- Chipotle Mexican Grill, Inc.
(NYSE: CMG) today reported financial results for its second quarter
ended June 30, 2024.
Second quarter highlights, year over
year:
- Total revenue increased 18.2% to $3.0
billion
- Comparable restaurant sales increased 11.1%
- Operating margin was 19.7%, an increase from 17.2%
- Restaurant level operating margin was 28.9%1, an
increase of 140 basis points
- Diluted earnings per share was $0.33, a 32.0% increase from $0.25. Adjusted diluted earnings per share, which
excluded a $0.01 after-tax impact
from an unrealized loss on a long-term investment and an increase
in legal reserves, was $0.341, a 36.0% increase from
$0.251
- Opened 52 new company-operated restaurants with 46 locations
including a Chipotlane, and one international licensed
restaurant
"The second quarter was outstanding as successful brand
marketing, including the return of Chicken Al Pastor, drove strong
demand to our restaurants. Our focus and training around throughput
paid off as we were able to meet the stronger demand trends with
terrific service and speed driving over 8% transaction growth in
the quarter," said Brian Niccol,
Chairman and CEO, Chipotle.
Common Stock Split Completed
On June 26, 2024, we executed a
50-for-1 stock split of our common stock with a record date of
June 18, 2024, and proportionately
increased the number of authorized shares of common stock to
reflect the effect of the stock split.
Results for the three months ended June 30,
2024:
Total revenue in the second quarter was $3.0 billion, an increase of 18.2% compared to
the second quarter of 2023. The increase in total revenue was
driven by new restaurant openings and an 11.1% increase in
comparable restaurant sales due to higher transactions of 8.7% and
a 2.4% increase in average check. Digital sales represented 35.3%
of total food and beverage revenue.
During the second quarter we opened 52 new company-operated
restaurants, of which 46 included a Chipotlane, and one
international licensed restaurant. 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 second quarter of 2024
were 29.4% of total revenue, in line with the second quarter of
2023. The benefit of last year's menu price increase was partially
offset by inflation of avocados, and, to a lesser extent, increased
oil usage for frying chips and higher incidence of beef as a result
of the continued success of our Braised Beef Barbacoa marketing
initiative.
Restaurant level operating margin in the second quarter was
28.9%1 compared to 27.5%1 in the second
quarter of 2023. The improvement was primarily driven by the
benefit of sales leverage, partially offset by wage and ingredient
inflation.
General and administrative expenses for the second quarter were
$175.0 million on a GAAP basis, or
$171.3 million1 on a
non-GAAP basis, excluding a $3.8
million increase in legal reserves. GAAP and non-GAAP
general and administrative expenses for the second quarter also
include $121.9 million of underlying
general and administrative expenses, $43.5
million of non-cash stock compensation, and $5.9 million of higher performance-based accruals
and payroll taxes on equity vesting and exercises.
The effective income tax rate for the second quarter was 25.0%
compared to 23.8% in the second quarter of 2023. The increase in
the effective income tax rate was primarily due to a decrease in
tax benefits related to option exercises and equity vesting,
partially offset with a decrease in tax reserves.
Net income for the second quarter was $455.7 million, or $0.33 per diluted share, compared to $341.8 million, or $0.25 per diluted share in the second quarter of
2023. In the second quarter of 2024, excluding the $0.01 after-tax impact from an unrealized loss on
a long-term investment and an increase in legal reserves, adjusted
net income was $463.0
million1 and adjusted diluted earnings per share
was $0.341.
During the second quarter we repurchased $151.4 million of stock at an average price per
share of $63.52. As of June 30,
2024, $647.7 million remained
available under share repurchase authorizations from our Board of
Directors, including an additional $400
million in authorized repurchases approved by the Board on
June 5, 2024. The repurchase
authorization may be modified, suspended, or discontinued at any
time.
More information will be available in our Quarterly Report on
Form 10-Q, which will be filed with the SEC by the end of July.
Outlook
For 2024, management is anticipating the following:
- Full year comparable restaurant sales growth in the mid to
high-single digit range
- 285 to 315 new restaurant openings with over 80% having a
Chipotlane
- 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 Wednesday, July 24,
2024, at 4:30 PM Eastern time to
discuss second quarter 2024 financial results as well as provide a
business update for the third quarter 2024.
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: 5419901. 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. There are over 3,500 restaurants as of June 30,
2024, in the United States,
Canada, the United Kingdom, France, Germany, and Kuwait and it 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 120,000
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
July 24, 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 expected restaurants with Chipotlanes, our ability
to achieve our long-term target of more than doubling our business
in North America and expanding
internationally, our rate of expansion, future food costs, 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, including as a result of state or local regulations
mandating higher minimum wages, and the competitive labor market,
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; risks of food safety incidents and
food-borne illnesses; risks associated with our reliance on certain
information technology systems and potential material failures,
interruptions or outages; 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 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; the
expected costs and risks related to our international expansion,
including through licensed restaurants in the Middle East; increases in ingredient and other
operating costs due to inflation, global conflicts, severe weather
and climate change, our Food with Integrity philosophy, tariffs or
trade restrictions; intermittent supply shortages relating to our
Food with Integrity philosophy, rapid expansion and supply chain
disruptions; 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 negative publicity or social media posts, 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 and the IT infrastructure; litigation risks, including
possible governmental actions and potential class action litigation
related to food safety incidents, cybersecurity incidents,
employment or privacy laws, advertising claims, contract disputes
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, 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.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(in thousands,
except per share data)
(unaudited)
|
|
|
Three months ended
June 30,
|
|
2024
|
|
2023
|
Food and beverage
revenue
|
$
2,954,913
|
|
99.4 %
|
|
$
2,497,509
|
|
99.3 %
|
Delivery service
revenue
|
18,204
|
|
0.6
|
|
17,292
|
|
0.7
|
Total
revenue
|
2,973,117
|
|
100.0
|
|
2,514,801
|
|
100.0
|
Restaurant operating
costs (exclusive of depreciation and amortization shown separately
below):
|
|
|
|
|
|
|
|
Food, beverage and
packaging
|
873,673
|
|
29.4
|
|
738,664
|
|
29.4
|
Labor
|
716,627
|
|
24.1
|
|
611,678
|
|
24.3
|
Occupancy
|
138,663
|
|
4.7
|
|
123,897
|
|
4.9
|
Other operating
costs
|
384,754
|
|
12.9
|
|
349,707
|
|
13.9
|
General and
administrative expenses
|
175,028
|
|
5.9
|
|
156,496
|
|
6.2
|
Depreciation and
amortization
|
83,562
|
|
2.8
|
|
78,771
|
|
3.1
|
Pre-opening
costs
|
8,995
|
|
0.3
|
|
7,538
|
|
0.3
|
Impairment, closure
costs, and asset disposals
|
5,762
|
|
0.2
|
|
16,240
|
|
0.6
|
Total operating
expenses
|
2,387,064
|
|
80.3
|
|
2,082,991
|
|
82.8
|
Income from
operations
|
586,053
|
|
19.7
|
|
431,810
|
|
17.2
|
Interest and other
income, net
|
21,861
|
|
0.7
|
|
16,446
|
|
0.7
|
Income before income
taxes
|
607,914
|
|
20.4
|
|
448,256
|
|
17.8
|
Provision for income
taxes
|
152,243
|
|
5.1
|
|
106,466
|
|
4.2
|
Net income
|
$
455,671
|
|
15.3 %
|
|
$
341,790
|
|
13.6 %
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.33
|
|
|
|
$
0.25
|
|
|
Diluted
|
$
0.33
|
|
|
|
$
0.25
|
|
|
Weighted-average common
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
1,372,800
|
|
|
|
1,380,222
|
|
|
Diluted
|
1,381,518
|
|
|
|
1,387,372
|
|
|
CHIPOTLE MEXICAN
GRILL, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(in thousands,
except per share data)
(unaudited)
|
|
|
Six months ended
June 30,
|
|
2024
|
|
2023
|
Food and beverage
revenue
|
$ 5,639,361
|
|
99.4 %
|
|
$ 4,848,518
|
|
99.3 %
|
Delivery service
revenue
|
35,605
|
|
0.6
|
|
34,863
|
|
0.7
|
Total
revenue
|
5,674,966
|
|
100.0
|
|
4,883,381
|
|
100.0
|
Restaurant operating
costs (exclusive of depreciation and amortization shown separately
below):
|
|
|
|
|
|
|
|
Food, beverage and
packaging
|
1,652,749
|
|
29.1
|
|
1,431,223
|
|
29.3
|
Labor
|
1,376,077
|
|
24.2
|
|
1,195,472
|
|
24.5
|
Occupancy
|
274,362
|
|
4.8
|
|
245,828
|
|
5.0
|
Other operating
costs
|
770,528
|
|
13.6
|
|
712,913
|
|
14.6
|
General and
administrative expenses
|
379,653
|
|
6.7
|
|
304,836
|
|
6.2
|
Depreciation and
amortization
|
166,805
|
|
2.9
|
|
155,356
|
|
3.2
|
Pre-opening
costs
|
16,206
|
|
0.3
|
|
13,736
|
|
0.3
|
Impairment, closure
costs, and asset disposals
|
11,241
|
|
0.2
|
|
24,601
|
|
0.5
|
Total operating
expenses
|
4,647,621
|
|
81.9
|
|
4,083,965
|
|
83.6
|
Income from
operations
|
1,027,345
|
|
18.1
|
|
799,416
|
|
16.4
|
Interest and other
income, net
|
41,225
|
|
0.7
|
|
25,395
|
|
0.5
|
Income before income
taxes
|
1,068,570
|
|
18.8
|
|
824,811
|
|
16.9
|
Provision for income
taxes
|
253,612
|
|
4.5
|
|
191,377
|
|
3.9
|
Net income
|
$
814,958
|
|
14.4 %
|
|
$
633,434
|
|
13.0 %
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.59
|
|
|
|
$
0.46
|
|
|
Diluted
|
$
0.59
|
|
|
|
$
0.46
|
|
|
Weighted-average common
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
1,372,488
|
|
|
|
1,380,711
|
|
|
Diluted
|
1,381,347
|
|
|
|
1,388,386
|
|
|
CHIPOTLE MEXICAN
GRILL, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(in thousands,
except per share data)
|
|
|
June 30,
2024
|
|
December 31,
2023
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
806,528
|
|
$
560,609
|
Accounts receivable,
net
|
97,542
|
|
115,535
|
Inventory
|
35,560
|
|
39,309
|
Prepaid expenses and
other current assets
|
91,852
|
|
117,462
|
Income tax
receivable
|
71,529
|
|
52,960
|
Investments
|
683,287
|
|
734,838
|
Total current
assets
|
1,786,298
|
|
1,620,713
|
Leasehold improvements,
property and equipment, net
|
2,265,694
|
|
2,170,038
|
Long-term
investments
|
972,644
|
|
564,488
|
Restricted
cash
|
27,664
|
|
25,554
|
Operating lease
assets
|
3,770,997
|
|
3,578,548
|
Other assets
|
74,599
|
|
63,082
|
Goodwill
|
21,939
|
|
21,939
|
Total assets
|
$
8,919,835
|
|
$
8,044,362
|
Liabilities and
shareholders' equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
203,480
|
|
$
197,646
|
Accrued payroll and
benefits
|
223,410
|
|
227,537
|
Accrued
liabilities
|
169,631
|
|
147,688
|
Unearned
revenue
|
182,331
|
|
209,680
|
Current operating
lease liabilities
|
264,304
|
|
248,074
|
Total current
liabilities
|
1,043,156
|
|
1,030,625
|
Long-term operating
lease liabilities
|
4,014,454
|
|
3,803,551
|
Deferred income tax
liabilities
|
83,298
|
|
89,109
|
Other
liabilities
|
67,107
|
|
58,870
|
Total
liabilities
|
5,208,015
|
|
4,982,155
|
Shareholders'
equity:
|
|
|
|
Preferred stock, $0.01
par value, 600,000 shares authorized, no shares issued as
of June 30, 2024 and December 31, 2023, respectively
|
-
|
|
-
|
Common stock, $0.01
par value, 11,500,000 shares authorized, 1,371,372 and
1,874,139
shares issued as of June 30, 2024 and December 31, 2023,
respectively
|
13,713
|
|
18,741
|
Additional paid-in
capital
|
2,023,802
|
|
1,937,794
|
Treasury stock, at
cost, 0 and 502,843 common shares as of June 30, 2024 and
December 31, 2023, respectively
|
-
|
|
(4,944,656)
|
Accumulated other
comprehensive loss
|
(8,514)
|
|
(6,657)
|
Retained
earnings
|
1,682,819
|
|
6,056,985
|
Total shareholders'
equity
|
3,711,820
|
|
3,062,207
|
Total liabilities and
shareholders' equity
|
$
8,919,835
|
|
$
8,044,362
|
CHIPOTLE MEXICAN
GRILL, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in
thousands)
(unaudited)
|
|
|
Six months ended
June 30,
|
|
2024
|
|
2023
|
Operating
activities
|
|
|
|
Net income
|
$
814,958
|
|
$
633,434
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
166,805
|
|
155,356
|
Deferred income tax
provision
|
(5,826)
|
|
7,827
|
Impairment, closure
costs, and asset disposals
|
9,917
|
|
24,173
|
Provision for credit
losses
|
(155)
|
|
312
|
Stock-based
compensation expense
|
81,243
|
|
50,756
|
Other
|
4,511
|
|
(9,237)
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
18,331
|
|
44,027
|
Inventory
|
3,763
|
|
(313)
|
Prepaid expenses and
other current assets
|
20,348
|
|
(21,365)
|
Operating lease
assets
|
135,881
|
|
121,363
|
Other
assets
|
1,769
|
|
3,455
|
Accounts
payable
|
7,802
|
|
(10,783)
|
Accrued payroll and
benefits
|
(4,438)
|
|
7,597
|
Accrued
liabilities
|
17,056
|
|
(66)
|
Unearned
revenue
|
(22,260)
|
|
(19,894)
|
Income tax
payable/receivable
|
(18,565)
|
|
146,177
|
Operating lease
liabilities
|
(101,348)
|
|
(100,794)
|
Other long-term
liabilities
|
2,020
|
|
5,521
|
Net cash provided by
operating activities
|
1,131,812
|
|
1,037,546
|
Investing
activities
|
|
|
|
Purchases of leasehold
improvements, property and equipment
|
(273,193)
|
|
(257,601)
|
Purchases of
investments
|
(738,434)
|
|
(590,656)
|
Maturities of
investments
|
374,373
|
|
220,565
|
Net cash used in
investing activities
|
(637,254)
|
|
(627,692)
|
Financing
activities
|
|
|
|
Acquisition of treasury
stock
|
(172,368)
|
|
(221,754)
|
Tax withholding on
stock-based compensation awards
|
(73,011)
|
|
(67,474)
|
Other financing
activities
|
(29)
|
|
115
|
Net cash used in
financing activities
|
(245,408)
|
|
(289,113)
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
(1,121)
|
|
265
|
Net change in cash,
cash equivalents, and restricted cash
|
248,029
|
|
121,006
|
Cash, cash equivalents,
and restricted cash at beginning of period
|
586,163
|
|
408,966
|
Cash, cash equivalents,
and restricted cash at end of period
|
$
834,192
|
|
$
529,972
|
Supplemental
disclosures of cash flow information
|
|
|
|
Income taxes
paid
|
$
277,427
|
|
$
33,252
|
Purchases of leasehold
improvements, property and equipment accrued in accounts payable
and accrued liabilities
|
$
76,304
|
|
$
55,904
|
Acquisition of treasury
stock accrued in accounts payable and accrued
liabilities
|
$
9,803
|
|
$
2,406
|
CHIPOTLE MEXICAN
GRILL, INC.
SUPPLEMENTAL
FINANCIAL AND OTHER DATA
(dollars in
thousands)
(unaudited)
|
|
|
|
For the three months
ended
|
|
|
Jun. 30,
2024
|
|
Mar. 31,
2024
|
|
Dec. 31,
2023
|
|
Sep. 30,
2023
|
|
Jun. 30,
2023
|
Company-operated
restaurants opened
|
|
52
|
|
47
|
|
121
|
|
62
|
|
47
|
Chipotle permanent
closures
|
|
(1)
|
|
(3)
|
|
(2)
|
|
(1)
|
|
-
|
Chipotle
relocations
|
|
-
|
|
(2)
|
|
(3)
|
|
(2)
|
|
(3)
|
Non-Chipotle permanent
closures
|
|
-
|
|
-
|
|
-
|
|
(6)
|
|
-
|
Company-operated
restaurants at end of period
|
|
3,530
|
|
3,479
|
|
3,437
|
|
3,321
|
|
3,268
|
Average restaurant
sales
|
|
$
3,146
|
|
$
3,082
|
|
$
3,018
|
|
$
2,972
|
|
$
2,941
|
Comparable restaurant
sales increase
|
|
11.1 %
|
|
7.0 %
|
|
8.4 %
|
|
5.0 %
|
|
7.4 %
|
|
|
|
|
|
For the three months
ended
|
|
|
Jun. 30,
2024
|
|
Mar. 31,
2024
|
|
Dec. 31,
2023
|
|
Sep. 30,
2023
|
|
Jun. 30,
2023
|
Licensed restaurants
opened
|
|
1
|
|
-
|
|
-
|
|
-
|
|
-
|
Licensed restaurants at
end of period
|
|
1
|
|
-
|
|
-
|
|
-
|
|
-
|
CHIPOTLE MEXICAN GRILL,
INC.
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
Below are definitions of the non-GAAP financial measures in this
release. The following tables provide a reconciliation of non-GAAP
financial measures presented in this release 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, and loss on investments. Adjusted
general and administrative expense is general and administrative
expense excluding expenses related to corporate restructuring and
certain legal proceedings. 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
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
June 30,
|
|
2024
|
|
2023
|
Net income
|
$
455,671
|
|
$
341,790
|
Non-GAAP
adjustments:
|
|
|
|
Impairment and exit
costs:
|
|
|
|
Restaurant asset
impairment and other restaurant exit costs(1)
|
-
|
|
4,765
|
Corporate asset
impairment(2)
|
-
|
|
3,735
|
Corporate
Restructuring:
|
|
|
|
Employee related and
other restructuring costs(3)
|
-
|
|
3,495
|
Legal
proceedings(4)
|
3,775
|
|
-
|
Investment(5)
|
6,016
|
|
-
|
Total non-GAAP
adjustments
|
9,791
|
|
11,995
|
Tax effect of non-GAAP
adjustments above(6)
|
(2,471)
|
|
(2,891)
|
After tax impact of
non-GAAP adjustments
|
7,320
|
|
9,104
|
Adjusted net
income
|
$
462,991
|
|
$
350,894
|
|
|
|
|
Diluted
weighted-average number of common shares outstanding
|
1,381,518
|
|
1,387,372
|
Diluted earnings per
share
|
$
0.33
|
|
$
0.25
|
Adjusted diluted
earnings per share
|
$
0.34
|
|
$
0.25
|
|
|
(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)
|
Charges for employee
severance, stock modifications and third-party vendors related to
the May 2023 optimization of our organizational
structure.
|
(4)
|
Charges for estimated
settlements for distinct legal matters that exceeded or are
expected to exceed typical costs for these types of legal
proceedings.
|
(5)
|
Charges for an
unrealized loss in a long-term investment.
|
(6)
|
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
June
30,
|
|
2024
|
|
2023
|
General and
administrative expenses
|
$
175,028
|
|
$
156,496
|
Non-GAAP
adjustments:
|
|
|
|
Restructuring
expense(1)
|
-
|
|
(3,495)
|
Legal
proceedings(2)
|
(3,775)
|
|
-
|
Total non-GAAP
adjustments
|
(3,775)
|
|
(3,495)
|
Adjusted general and
administrative expenses
|
$
171,253
|
|
$
153,001
|
|
|
(1)
|
For three months ended
June 30, 2023, costs for employee severance, stock modifications
and third party related to the May 2023 optimization of our
organizational structure.
|
(2)
|
Charges for estimated
settlements for distinct legal matters that exceeded or are
expected to exceed typical costs for these types of legal
proceedings.
|
CHIPOTLE MEXICAN
GRILL, INC.
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
|
Adjusted Effective
Income Tax Rate
(unaudited)
|
|
|
Three months
ended
June
30,
|
|
2024
|
|
2023
|
Effective income tax
rate
|
25.0 %
|
|
23.8 %
|
Tax impact of non-GAAP
adjustments(1)
|
-
|
|
-
|
Adjusted effective
income tax rate
|
25.0 %
|
|
23.8 %
|
|
|
(1)
|
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
|
|
Restaurant Level
Operating Margin
(in
thousands)
(unaudited)
|
|
|
Three months ended
June 30,
|
|
2024
|
|
Percent of
total revenue
|
|
2023
|
|
Percent of
total revenue
|
Income from
operations
|
$
586,053
|
|
19.7 %
|
|
$
431,810
|
|
17.2 %
|
Non-GAAP
Adjustments
|
|
|
|
|
|
|
|
General and
administrative expenses
|
175,028
|
|
5.9
|
|
156,496
|
|
6.2
|
Depreciation and
amortization
|
83,562
|
|
2.8
|
|
78,771
|
|
3.1
|
Pre-opening
costs
|
8,995
|
|
0.3
|
|
7,538
|
|
0.3
|
Impairment, closure
costs, and asset disposals
|
5,762
|
|
0.2
|
|
16,240
|
|
0.6
|
Total non-GAAP
Adjustments
|
$
273,347
|
|
9.2 %
|
|
$
259,045
|
|
10.3 %
|
Restaurant level
operating margin
|
$
859,400
|
|
28.9 %
|
|
$
690,855
|
|
27.5 %
|
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SOURCE Chipotle Mexican Grill