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SEC Filings

10-Q
CHIPOTLE MEXICAN GRILL INC filed this Form 10-Q on 07/26/2017
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Labor Costs



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended June 30,

 

%

 

Six months ended June 30,

 

 



2017

 

2016

 

increase

 

2017

 

2016

 

% increase



(dollars in millions)

 

 

 

(dollars in millions)

 

 

Labor costs

$

305.9 

 

$

276.9 

 

10.4% 

 

$

593.7 

 

$

534.6 

 

11.1% 

As a percentage of revenue

 

26.2% 

 

 

27.7% 

 

 

 

 

26.5% 

 

 

29.2% 

 

 



Labor costs as a percentage of revenue decreased for the three months ended June 30, 2017, primarily due to sales leverage and labor efficiencies resulting from fewer managers in each of our restaurants and more efficient crew deployment, partially offset by wage inflation. Labor costs as a percentage of revenue decreased for the six months ended June 30, 2017 due to labor efficiencies from fewer managers in each of our restaurants, and more efficient crew deployment, as well as sales leverage, partially offset by wage inflation. Labor efficiencies were driven by abnormally high labor expenses in the comparable 2016 periods as a result of being fully staffed during the heavy sales promotional activity we were conducting during those periods.

Occupancy Costs



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended June 30,

 

%

 

Six months ended June 30,

 

 



2017

 

2016

 

increase

 

2017

 

2016

 

% increase



(dollars in millions)

 

 

 

(dollars in millions)

 

 

Occupancy costs

$

80.3 

 

$

72.4 

 

11.0% 

 

$

159.3 

 

$

142.9 

 

11.4% 

As a percentage of revenue

 

6.9% 

 

 

7.2% 

 

 

 

 

7.1% 

 

 

7.8% 

 

 



Occupancy costs as a percentage of revenue decreased for the three and six months ended June 30, 2017, primarily due to sales leverage on a partially fixed-cost base.

Other Operating Costs



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended June 30,

 

%

 

Six months ended June 30,

 

 



2017

 

2016

 

increase

 

2017

 

2016

 

% increase



(dollars in millions)

 

 

 

(dollars in millions)

 

 

Other operating costs

$

163.7 

 

$

152.2 

 

7.6% 

 

$

314.3 

 

$

307.3 

 

2.3% 

As a percentage of revenue

 

14.0% 

 

 

15.2% 

 

 

 

 

14.0% 

 

 

16.8% 

 

 



Other operating costs include, among other items, marketing and promotional costs, bank and credit card fees, and restaurant utilities and maintenance costs. Other operating costs as a percentage of revenue decreased for the three and six months ended June 30, 2017, due primarily to sales leverage and decreased marketing and promotional spend, as well as decreased kitchen supplies expense. While marketing and promotional spend decreased to 3.5% of revenue for the first six months of 2017, as compared to 5.4% for the first six months of 2016, it remains above historical levels as we continue our efforts to drive customer traffic.

General and Administrative Expenses



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended June 30,

 

%

 

Six months ended June 30,

 

 



2017

 

2016

 

decrease

 

2017

 

2016

 

% increase



(dollars in millions)

 

 

 

(dollars in millions)

 

 

General and administrative expense

$

70.1 

 

$

70.8 

 

(1.0%)

 

$

139.5 

 

$

132.8 

 

5.1% 

As a percentage of revenue

 

6.0% 

 

 

7.1% 

 

 

 

 

6.2% 

 

 

7.2% 

 

 



For the three months ended June 30, 2017, general and administrative expenses were relatively consistent in dollar terms with the three months ended June 30, 2016 due primarily to decreased legal expenses, partially offset by increased bonus costs and higher non-cash stock based compensation expense. For the six months ended June 30, 2017, general and administrative expenses increased in dollar terms due to increased non-cash stock based compensation expense and bonus costs, partially offset by decreased legal expenses, lower meeting costs because of an all-team employee meeting held in February 2016, and decreased travel expenses. The increase in stock-based compensation expense during 2017 was a result of a cumulative reduction of expense in the first quarter of 2016 for performance share awards that were no longer expected to vest.

11

 


 

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