DENVER - (BUSINESS WIRE) - Jul. 18, 2013 - Chipotle Mexican Grill, Inc. (NYSE: CMG) today reported financial results for its second quarter ended June 30, 2013.
Highlights for the second quarter of 2013 as compared to the second quarter of 2012 include:
Highlights for the six months ended June 30, 2013 as compared to the prior year include:
“This month marks Chipotle’s 20th anniversary. What started out as one restaurant serving burritos and tacos, has evolved into a national brand which is changing the way people think about and eat fast food. Our vision has connected with our loyal customers, who visit Chipotle to enjoy great tasting food made from premium ingredients. It's rewarding to look back and see what we've accomplished, but it's even more inspiring to think about what lies ahead over the next twenty years.” said Steve Ells, Founder, Chairman and co-CEO of Chipotle.
Revenue for the quarter was $816.8 million, up 18.2% from the prior year period. The growth in revenue was the result of new restaurants not in the comparable base and a 5.5% increase in comparable restaurant sales. Comparable restaurant sales growth was driven by increased traffic and from the benefit of one additional trading day in the quarter as compared to the second quarter of 2012.
During the quarter we opened 44 new restaurants, bringing the total restaurant count to 1,502.
Food costs were 33.1% of revenue, an increase of 100 basis points driven by higher commodity costs. Higher commodity costs were driven by increased prices for all of our salsa ingredients, as well as for dairy items and chicken. These increases were partially offset by lower avocado prices.
Restaurant level operating margin was 27.6% in the quarter, a decrease of 160 basis points from the prior year period. The decrease was primarily driven by higher food and marketing costs.
General and administrative expenses were 6.2% of revenue, an increase of 10 basis points due to higher legal and payroll costs partially offset by favorable sales leverage.
Net income for the first quarter of 2013 was $87.9 million, or $2.82 per diluted share, compared to $81.7 million, or $2.56 per diluted share, in the second quarter of 2012. Income taxes were negatively impacted by non-recurring tax adjustments that reduced earnings by $0.03 per share.
Revenue for the first six months of 2013 was $1.54 billion, up 15.9% from the prior year period. The growth in revenue was the result of new restaurants not in the comparable base and a 3.4% increase in comparable restaurant sales. Comparable restaurant sales growth was primarily driven by increased traffic.
During the first six months of the year, we opened 92 new restaurants, bringing the total restaurant count to 1,502.
Restaurant level operating margin was 27.0% for the first six months, a decrease of 130 basis points from the prior year period. The decrease was primarily from higher food costs and higher marketing costs.
General and administrative expense for the first six months of 2013 was 6.2% of revenue, or a decrease of 70 basis points from the prior year period. The decrease was from lower stock based compensation expense and lower employee related payroll taxes.
Net income for the first six months of 2013 was $164.4 million, or $5.27 per diluted share, compared to $144.3 million, or $4.53 per diluted share, in the first six months of 2012.
“We are delighted with our strong financial performance during the second quarter. We know that empowered cultures create excellent teams, who deliver a special dining experience for each customer who visits Chipotle. They attract great employees and develop them to be the very best leaders from within the organization, which not only supports our great operations, but also makes our strong performance sustainable as we add more restaurants,” said Monty Moran, co-CEO
For 2013, management expects the following:
The following definitions apply to these terms as used throughout this release:
Comparable restaurant sales 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 2013 financial results on Thursday, July 18, 2013 at 4:30 PM Eastern time.
The conference call can be accessed live over the phone by dialing 1-888-337-8192 or for international callers by dialing 1-719-325-2284. 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 6035922. The replay will be available until July 25, 2013. 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-CEO, 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 from using ingredients that are not only fresh, but that—where possible—are sustainably grown responsibly raised with respect for the animals, the land, and the farmers who produce the food. A similarly focused people culture, with an emphasis on identifying and empowering top performing employees, enables us to develop future leaders from within. Chipotle opened with a single restaurant in 1993 and currently operates more than 1,500 restaurants. For more information, visit Chipotle.com.
Certain statements in this press release, including statements under the heading “Outlook” of our expected number of new restaurant openings, comparable restaurant sales trends, potential menu price increases, and effective tax rates in 2013, 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: the uncertainty of our ability to achieve expected levels of comparable restaurant sales increases due to factors such as decreased consumer spending and economic uncertainty, our possible inability to increase menu prices or realize the benefits of menu price increases, or the impact of competition; 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 performance of new restaurants and their impact on existing restaurant sales; increases in the cost of food ingredients and other key supplies; the potential for increased labor costs or difficulty retaining qualified employees, including as a result of immigration enforcement activities; the risk of food-borne illnesses and other health concerns about our food; risks relating to our expansion into new markets; the impact of federal, state or local government regulations relating to our employees, our restaurant design, or the sale of food or alcoholic beverages; risks associated with our Food With Integrity strategy, including supply shortages and potential liabilities related to advertising claims and other marketing activities related to Food With Integrity; 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; risks relating to litigation; risks relating to our insurance coverage and self-insurance; our dependence on key personnel; risks related to our marketing and advertising strategies; security risks associated with the acceptance of electronic payment cards or electronic storage of confidential customer or employee information; 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 Web site at chipotle.com
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Source: Chipotle Mexican Grill, Inc.
Chipotle Mexican Grill, Inc.
Investor Relations
Alex Spong
303-222-2552
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.