DENVER--(BUSINESS WIRE)--Jul. 19, 2012-- Chipotle Mexican Grill, Inc. (NYSE: CMG) today reported financial results for its second quarter ended June 30, 2012.
Highlights for the second quarter of 2012 as compared to the second quarter of 2011 include:
Highlights for the six months ended June 30, 2012 as compared to the prior year include:
"We are pleased that our continued focus on improving the quality and taste of our food, along with strengthening our people culture, has lead to a better dining experience for our customers, and ultimately better financial results for our shareholders," said Steve Ells, Founder, Chairman and Co-CEO of Chipotle.
Revenue for the quarter was $690.9 million, up 20.9% from the prior year period. The growth in revenue was the result of new restaurants not in the comparable base and an 8.0% increase in comparable restaurant sales. Comparable restaurant sales growth was primarily driven by the impact of menu price increases, most of which were taken in 2011, as well as from increased traffic.
During the quarter we opened 55 new restaurants, including our first restaurant in Paris, France, bringing the total restaurant count to 1,316.
Restaurant level operating margin was 29.2% in the quarter, an increase of 340 basis points from the prior year period. The increase was primarily driven by leverage from higher average restaurant sales and lower marketing expenses.
G&A costs were 6.1% of revenue, down 120 basis points from the prior year period. The decrease as a percent of revenue was driven by favorable sales leverage, lower employee bonus accruals, and lower legal expenses, partially offset by an increase in non-cash stock-based compensation expense.
Net income for the second quarter of 2012 was $81.7 million, or $2.56 per diluted share, compared to $50.7 million, or $1.59 per diluted share, in the second quarter of 2011.
Revenue for the first six months of 2012 was $1.33 billion, up 23.2% from the prior year period. The growth in revenue was the result of new restaurants not in the comparable base and a 10.2% increase in comparable restaurant sales. Comparable restaurant sales growth was primarily driven by increased traffic as well as the impact from menu price increases, most of which were taken in 2011.
During the first six months of the year, we opened 87 new Chipotle restaurants, bringing the total restaurant count to 1,316.
Restaurant level operating margin was 28.3% for the first six months, an increase of 280 basis points from the prior year period. The increase was primarily driven by the impact of leverage from higher restaurant sales and from lower marketing costs.
G&A costs for the first six months of 2012 were 6.9% of revenue, or flat to prior year primarily due to leverage from higher sales as well as a lower bonus accrual, offset by higher stock based compensation expense.
Net income for the first six months of 2012 was $144.3 million, or $4.53 per diluted share, compared to $97.0 million, or $3.06 per diluted share, in the first six months of 2011.
"While I'm pleased with the financial results in the quarter, I'm even more delighted that we are developing more restaurateurs than ever before, and our restaurant teams are the strongest they have ever been. We know that having strong leaders in our restaurants, who are hiring and empowering top performers to deliver high standards and an extraordinary dining experience, will lead to more loyal Chipotle customers, and greater shareholder value," commented Co-CEO Monty Moran.
For 2012, management expects the following:
The following definitions apply to these terms as used throughout this release:
Comparable restaurant sales increases 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 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.
Chipotle will host a conference call to discuss the second quarter 2012 financial results today at 4:30 PM Eastern Time. The conference call can be accessed live over the phone by dialing 1-866-431-5320 or for international callers by dialing 1-719-325-2197. A replay will be available one hour after the call and can be accessed by dialing 1-877-870-5176 or 1-858-384-5517 for international callers; the password is 7427674. The replay will be available until July 26, 2012. The call will be webcast live from the Company's website at chipotle.com under the investor relations section. An archived webcast will be available one hour after the end of the call.
Steve Ells, Founder, Chairman and Co-Chief Executive Officer, started Chipotle with the idea that food served fast did not have to be a typical fast food experience. Today, Chipotle continues to offer 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 over 1,300 restaurants. For more information, visit chipotle.com.
Certain statements in this press release, including statements about financial results and shareholder returns, as well as statements under the heading "Outlook" of our expected number of new restaurant openings, comparable restaurant sales increases, and effective tax rate in 2012, 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 expected levels of comparable restaurant sales increases; the performance of new restaurants and their impact on existing restaurant sales; increases in the cost of food ingredients and other key supplies; the risk of food-borne illnesses and other health concerns about our food; the potential for increased labor costs or difficulty retaining qualified employees, including as a result of immigration enforcement activities; risks relating to our expansion into new markets; the impact of federal, state or local government regulations relating to our employees and the sale of food or alcoholic beverages; risks associated with our Food With Integrity strategy, including supply shortages; changes in consumer preferences, general economic conditions or consumer discretionary spending; the effect of competition in the restaurant industry; the effects of continuing economic uncertainty on our business and on our suppliers, landlords and potential developers; the impact of increasing general and administrative expenses due to higher non-cash stock-based compensation expense and other increased expenses; risks relating to litigation; risks relating to our insurance coverage and self-insurance; our dependence on key personnel; security risks associated with the acceptance of electronic payment cards; the uncertainty of our ability to protect our name, logo and other proprietary information or the reputation of our brand; the potential effects of inclement weather; risks related to the tax treatment of our separation from McDonald's; 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 our Investor Relations page of our Web site at chipotle.com.
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Chipotle continues to offer a focused menu of burritos, tacos, burrito bowls and salads made from fresh, high-quality raw ingredients, prepared using classic cooking methods and served in a distinctive atmosphere.