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SEC Filings

10-K
CHIPOTLE MEXICAN GRILL INC filed this Form 10-K on 02/08/2018
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Occupancy costs as a percentage of revenue increased in 2016 primarily due to lower average restaurant sales on a largely fixed-cost base. Occupancy costs increased in dollar terms for the year ended December  31, 2016, primarily due to costs associated with new restaurants.

Other Operating Costs  



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



Year ended December 31,

 

% increase

 

% increase



2017

 

2016

 

2015

 

2017 over 2016

 

2016 over 2015



(dollars in millions)

 

 

 

 

Other operating costs

$

651.6 

 

$

642.0 

 

$

515.0 

 

1.5% 

 

24.7% 

As a percentage of revenue

 

14.6% 

 

 

16.4% 

 

 

11.4% 

 

 

 

 

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 decreased as a percentage of revenue in 2017 due primarily to decreased marketing and promotional spend, sales leverage including the benefit of menu price increases, and decreased kitchen supplies expense. Marketing and promotional spend decreased to 3.5% of revenue in 2017, as compared to 5.1% of revenue in 2016.  We expect other operating costs as a percentage of revenue in 2018 to remain consistent with 2017 as planned lower marketing and promotional spend is offset by expected higher maintenance costs from investments in our existing restaurants.

Other operating costs increased as a percentage of revenue in 2016 due primarily to higher marketing and promotional expense as well as sales deleveraging. We increased our marketing and promotional spend in an effort to regain customers, which contributed $98.2 million to the increase.

General and Administrative Expenses  



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



Year ended December 31,

 

% increase

 

% increase



2017

 

2016

 

2015

 

2017 over 2016

 

2016 over 2015



(dollars in millions)

 

 

 

 

General and administrative expense

$

296.4 

 

$

276.2 

 

$

250.2 

 

7.3% 

 

10.4% 

As a percentage of revenue

 

6.6% 

 

 

7.1% 

 

 

5.6% 

 

 

 

 

General and administrative expenses increased in dollar terms in 2017, due to recording a liability of $30.0 million as an estimate of potential losses associated with anticipated claims and assessments by payment card networks for the data security incident that occurred in 2017. Increased bonus costs and higher non-cash stock-based compensation expense also contributed to the increase. The increase was partially offset by lower legal costs, and decreased meeting costs because of the biennial All Managers Conference held in September 2016. The increase in stock-based compensation expense during 2017 was primarily a result of a cumulative reduction of expense in 2016 for performance share awards that were no longer expected to vest.  We expect that general and administrative expenses will increase in dollar terms in 2018 due to increased wages and benefits, the biennial All Managers’ Conference planned for the third quarter of 2018, and an increase in stock-based compensation expense.

The increase in general and administrative expenses in dollar terms for 2016 primarily resulted from increased legal expense, higher payroll costs as we grew, and expenses associated with our biennial All Managers’ Conference held during 2016, partially offset by lower bonus expense and travel costs. 

Depreciation and Amortization  



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



Year ended December 31,

 

% increase

 

% increase



2017

 

2016

 

2015

 

2017 over 2016

 

2016 over 2015



(dollars in millions)

 

 

 

 

Depreciation and amortization

$

163.3 

 

$

146.4 

 

$

130.4 

 

11.6% 

 

12.3% 

As a percentage of revenue

 

3.6% 

 

 

3.7% 

 

 

2.9% 

 

 

 

 

Depreciation and amortization decreased as a percentage of revenue in 2017 due to sales leverage on a partially fixed-cost base.

Depreciation and amortization increased as a percentage of revenue in 2016 due to sales deleveraging.    The increase in dollar terms was due primarily to depreciation and amortization costs associated with new restaurants. 

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