Highlights for the fourth quarter of 2015 as compared to the fourth quarter of 2014 include:
- Revenue decreased 6.8% to
$997.5 million - Comparable restaurant sales decreased 14.6%
- Restaurant level operating margin was 19.6%, a decrease of 700 basis points
- Net income was
$67.9 million , a decrease of 44.0% - Diluted earnings per share was
$2.17 , a decrease of 43.5% - Opened 79 new restaurants
Highlights for the twelve months ended
- Revenue increased 9.6% to
$4.5 billion - Comparable restaurant sales increased 0.2%
- Restaurant level operating margin was 26.1%, a decrease of 110 basis points
- Net income was
$475.6 million , an increase of 6.8% - Diluted earnings per share was
$15.10 , an increase of 6.9% - Opened 229 new restaurants
“The fourth quarter of 2015 was the most challenging period in Chipotle’s history, but the
Fourth quarter 2015 results
Revenue for the quarter was
We opened 79 new restaurants during the quarter, bringing the total restaurant count to 2,010.
Food costs were 33.8% of revenue, a decrease of 120 basis points as compared to the fourth quarter of 2014, as a result of relief in dairy, avocado and beef prices and the benefit of our menu price increase, partially offset by costs related to food waste and testing.
Restaurant level operating margin was 19.6% in the quarter, a decrease of 700 basis points from the fourth quarter 2014. The decrease was primarily driven by the significant decrease in comparable restaurant sales and non-recurring costs related to the food-borne illness incidents, partially offset by favorable food costs.
General and administrative expenses were 4.7% of revenue, a decrease of 100 basis points due primarily to lower non-cash stock-based compensation expense and bonus costs, partially offset by higher wages as we grew.
Net income for the fourth quarter of 2015 was
Full year ended
Revenue for the full year of 2015 was
We opened 229 new restaurants during the full year of 2015, bringing the total restaurant count to 2,010.
Food costs were 33.4% of revenue, a decrease of 120 basis points as compared to the prior year, primarily as a result of the benefit of menu price increases and relief in dairy and avocado costs. The decrease was partially offset by inflation on beef.
Restaurant level operating margin was 26.1% for the full year of 2015, a decrease of 110 basis points from the prior year. The decrease was primarily driven by higher labor and other operating costs, partially offset by lower food costs.
General and administrative expenses were 5.6% of revenue, a decrease of 110 basis points due to decreased non-cash stock-based compensation expense, lower bonus expense, and decreased expense associated with our biennial All Managers’ Conference held in the third quarter of 2014, partially offset by higher wages as we grew.
Net income for the full year 2015 was
“2016 will be a very difficult year relative to our past performance. But, by staying true to our food culture and unique people culture, and layering on our rigorous food safety program, we are confident that we are now in a position to aggressively welcome customers into our restaurants and restore customer confidence in the things that make Chipotle great. With our full commitment to becoming an industry leader in food safety, and our continued focus on delivering an exceptional customer experience, we are confident that Chipotle will emerge as an even stronger company,” said
On
Additionally, our Board of Directors has approved the investment of up to an additional
Outlook
For 2016, management expects the following:
- 220-235 new restaurant openings
- An effective full year tax rate of approximately 39.0%
Definitions
The following definitions apply to these terms as used throughout this release:
Comparable restaurant sales represent the change in period-over-period sales for restaurants in operation for at least 13 full calendar months.
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.
Conference Call
Chipotle will host a conference call to discuss the fourth quarter and full year 2015 financial results on
The conference call can be accessed live over the phone by dialing 1-888-523-1232 or for international callers by dialing 1-719-325-4877. 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 214044. The replay will be available until
About Chipotle
Forward-Looking Statements
Certain statements in this press release, including statements under the heading “Outlook” of our expected number of new restaurant openings and effective tax rates for 2016, as well as statements regarding our enhanced food safety plan and restoring customer confidence in Chipotle, 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 changes in consumers’ acceptance of and enthusiasm for our brand, including as a result of recent food-borne illness incidents, the impact of competition, or our possible inability to increase menu prices or realize the benefits of menu price increases; the risk of food-borne illnesses and other health concerns about our food or dining out generally; 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 or higher food costs due to new supply chain protocols; the potential for increased labor costs or difficulty retaining qualified employees, including as a result of market pressures, enhanced food safety procedures in our restaurants, or new regulatory requirements; 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 from advertising claims and other marketing activities related to Food With Integrity; security risks associated with the acceptance of electronic payment cards or electronic storage and processing of confidential customer or employee information; risks relating to litigation, including possible governmental actions related to food-borne illness incidents, as well as class action litigation regarding employment laws, advertising claims or other matters; risks relating to our insurance coverage and self-insurance; our dependence on key personnel; risks related to our marketing and advertising strategies and ability to protect our brand and reputation; risks associated with our ability to effectively manage our growth; and other risk factors described from time to time in our
|
Chipotle Mexican Grill, Inc. |
|||||||||||||
| Three months ended December 31, | |||||||||||||
| 2015 | 2014 | ||||||||||||
| Revenue | $ | 997,507 | 100.0 | % | $ | 1,069,811 | 100.0 | % | |||||
|
Restaurant operating costs (exclusive of depreciation and |
|||||||||||||
| Food, beverage and packaging | 337,065 | 33.8 | 373,991 | 35.0 | |||||||||
| Labor | 260,585 | 26.1 | 237,310 | 22.2 | |||||||||
| Occupancy | 68,143 | 6.8 | 60,930 | 5.7 | |||||||||
| Other operating costs | 136,184 | 13.7 | 112,732 | 10.5 | |||||||||
| General and administrative expenses | 46,875 | 4.7 | 60,929 | 5.7 | |||||||||
| Depreciation and amortization | 34,140 | 3.4 | 29,750 | 2.8 | |||||||||
| Pre-opening costs | 5,452 | 0.5 | 4,088 | 0.4 | |||||||||
| Loss on disposal of assets | 5,450 | 0.5 | 2,209 | 0.2 | |||||||||
| Total operating expenses | 893,894 | 89.6 | 881,939 | 82.4 | |||||||||
| Income from operations | 103,613 | 10.4 | 187,872 | 17.6 | |||||||||
| Interest and other income (expense), net | 1,795 | 0.2 | 885 | 0.1 | |||||||||
| Income before income taxes | 105,408 | 10.6 | 188,757 | 17.6 | |||||||||
| Provision for income taxes | (37,534 | ) | (3.8 | ) | (67,523 | ) | (6.3 | ) | |||||
| Net income | $ | 67,874 | 6.8 | % | $ | 121,234 | 11.3 | % | |||||
| Other comprehensive loss, net of income taxes: | |||||||||||||
| Foreign currency translation adjustments | (1,718 | ) | (1,008 | ) | |||||||||
|
Unrealized loss on investments, net of income taxes of |
(1,522 | ) | - | ||||||||||
| Other comprehensive loss, net of income taxes | (3,240 | ) | (1,008 | ) | |||||||||
| Comprehensive income | $ | 64,634 | $ | 120,226 | |||||||||
| Earnings per share: | |||||||||||||
| Basic | $ | 2.19 | $ | 3.91 | |||||||||
| Diluted | $ | 2.17 | $ | 3.84 | |||||||||
| Weighted average common shares outstanding: | |||||||||||||
| Basic | 31,027 | 31,024 | |||||||||||
| Diluted | 31,312 | 31,542 | |||||||||||
|
Chipotle Mexican Grill, Inc. |
|||||||||||||
| Year ended December 31, | |||||||||||||
| 2015 | 2014 | ||||||||||||
| Revenue | $ | 4,501,223 | 100.0 | % | $ | 4,108,269 | 100.0 | % | |||||
|
Restaurant operating costs (exclusive of depreciation and |
|||||||||||||
| Food, beverage and packaging | 1,503,835 | 33.4 | 1,420,994 | 34.6 | |||||||||
| Labor | 1,045,726 | 23.2 | 904,407 | 22.0 | |||||||||
| Occupancy | 262,412 | 5.8 | 230,868 | 5.6 | |||||||||
| Other operating costs | 514,963 | 11.4 | 434,244 | 10.6 | |||||||||
| General and administrative expenses | 250,214 | 5.6 | 273,897 | 6.7 | |||||||||
| Depreciation and amortization | 130,368 | 2.9 | 110,474 | 2.7 | |||||||||
| Pre-opening costs | 16,922 | 0.4 | 15,609 | 0.4 | |||||||||
| Loss on disposal of assets | 13,194 | 0.3 | 6,976 | 0.2 | |||||||||
| Total operating expenses | 3,737,634 | 83.0 | 3,397,469 | 82.7 | |||||||||
| Income from operations | 763,589 | 17.0 | 710,800 | 17.3 | |||||||||
| Interest and other income (expense), net | 6,278 | 0.1 | 3,503 | 0.1 | |||||||||
| Income before income taxes | 769,867 | 17.1 | 714,303 | 17.4 | |||||||||
| Provision for income taxes | (294,265 | ) | (6.5 | ) | (268,929 | ) | (6.5 | ) | |||||
| Net income | $ | 475,602 | 10.6 | % | $ | 445,374 | 10.8 | % | |||||
| Other comprehensive loss, net of income taxes: | |||||||||||||
| Foreign currency translation adjustments | (6,322 | ) | (2,049 | ) | |||||||||
|
Unrealized loss on investments, net of income taxes of |
(1,522 | ) | - | ||||||||||
| Other comprehensive loss, net of income taxes | (7,844 | ) | (2,049 | ) | |||||||||
| Comprehensive income | $ | 467,758 | $ | 443,325 | |||||||||
| Earnings per share: | |||||||||||||
| Basic | $ | 15.30 | $ | 14.35 | |||||||||
| Diluted | $ | 15.10 | $ | 14.13 | |||||||||
| Weighted average common shares outstanding: | |||||||||||||
| Basic | 31,092 | 31,038 | |||||||||||
| Diluted | 31,494 | 31,512 | |||||||||||
|
Chipotle Mexican Grill, Inc. |
||||||||
| December 31, | ||||||||
| 2015 | 2014 | |||||||
|
(as adjusted)1 |
||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 248,005 | $ | 419,465 | ||||
|
Accounts receivable, net of allowance for doubtful accounts of $1,176 and $1,199 as of December |
38,283 | 34,839 | ||||||
| Inventory | 15,043 | 15,332 | ||||||
| Prepaid expenses and other current assets | 39,965 | 34,795 | ||||||
| Income tax receivable | 58,152 | 16,488 | ||||||
| Investments | 415,199 | 338,592 | ||||||
| Total current assets | 814,647 | 859,511 | ||||||
| Leasehold improvements, property and equipment, net | 1,217,220 | 1,106,984 | ||||||
| Long term investments | 622,939 | 496,106 | ||||||
| Other assets | 48,321 | 42,777 | ||||||
| Goodwill | 21,939 | 21,939 | ||||||
| Total assets | $ | 2,725,066 | $ | 2,527,317 | ||||
| Liabilities and shareholders' equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 85,709 | $ | 69,613 | ||||
| Accrued payroll and benefits | 64,958 | 73,894 | ||||||
| Accrued liabilities | 129,275 | 102,203 | ||||||
| Total current liabilities | 279,942 | 245,710 | ||||||
| Deferred rent | 251,962 | 219,414 | ||||||
| Deferred income tax liability | 32,305 | 21,561 | ||||||
| Other liabilities | 32,883 | 28,263 | ||||||
| Total liabilities | 597,092 | 514,948 | ||||||
| Shareholders' equity: | ||||||||
|
Preferred stock, $0.01 par value, 600,000 shares authorized, no shares issued as of December 31, |
- | - | ||||||
|
Common stock $0.01 par value, 230,000 shares authorized, and 35,790 and 35,394 shares issued as |
358 | 354 | ||||||
| Additional paid-in capital | 1,172,628 | 1,038,932 | ||||||
|
Treasury stock, at cost, 5,206 and 4,367 common shares at December 31, 2015 and December 31, |
(1,234,612 | ) | (748,759 | ) | ||||
| Accumulated other comprehensive income (loss) | (8,273 | ) | (429 | ) | ||||
| Retained earnings | 2,197,873 | 1,722,271 | ||||||
| Total shareholders' equity | 2,127,974 | 2,012,369 | ||||||
| Total liabilities and shareholders' equity | $ | 2,725,066 | $ | 2,527,317 | ||||
|
1 Balances were adjusted because we adopted Financial Accounting Standards Board Accounting Standards Update No. |
||||||||
|
Chipotle Mexican Grill, Inc. |
||||||||
| Year ended December 31, | ||||||||
| 2015 | 2014 | |||||||
| Operating activities | ||||||||
| Net income | $ | 475,602 | $ | 445,374 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 130,368 | 110,474 | ||||||
| Deferred income tax (benefit) provision | 11,666 | (20,671 | ) | |||||
| Loss on disposal of assets | 13,194 | 6,976 | ||||||
| Bad debt allowance | (23 | ) | 9 | |||||
| Stock-based compensation expense | 57,911 | 96,440 | ||||||
| Excess tax benefit on stock-based compensation | (74,442 | ) | (21,667 | ) | ||||
| Other | 582 | 104 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (3,504 | ) | (10,966 | ) | ||||
| Inventory | 262 | (2,307 | ) | |||||
| Prepaid expenses and other current assets | (5,259 | ) | (658 | ) | ||||
| Other assets | (5,619 | ) | 1,071 | |||||
| Accounts payable | 19,525 | 2,168 | ||||||
| Accrued liabilities | (7,440 | ) | 35,019 | |||||
| Income tax payable/receivable | 32,756 | 8,831 | ||||||
| Deferred rent | 32,911 | 27,025 | ||||||
| Other long-term liabilities | 4,826 | 4,845 | ||||||
| Net cash provided by operating activities | 683,316 | 682,067 | ||||||
| Investing activities | ||||||||
| Purchases of leasehold improvements, property and equipment | (257,418 | ) | (252,590 | ) | ||||
| Purchases of investments | (559,372 | ) | (521,004 | ) | ||||
| Maturities of investments | 352,650 | 254,750 | ||||||
| Net cash used in investing activities | (464,140 | ) | (518,844 | ) | ||||
| Financing activities | ||||||||
| Acquisition of treasury stock | (460,675 | ) | (88,338 | ) | ||||
| Excess tax benefit on stock-based compensation | 74,442 | 21,667 | ||||||
| Stock plan transactions and other financing activities | (207 | ) | (66 | ) | ||||
| Net cash used in financing activities | (386,440 | ) | (66,737 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | (4,196 | ) | (224 | ) | ||||
| Net change in cash and cash equivalents | (171,460 | ) | 96,262 | |||||
| Cash and cash equivalents at beginning of year | 419,465 | 323,203 | ||||||
| Cash and cash equivalents at end of year | $ | 248,005 | $ | 419,465 | ||||
| Supplemental disclosures of cash flow information | ||||||||
| Income taxes paid | $ | 248,547 | $ | 280,687 | ||||
|
Increase (decrease) in purchases of leasehold improvements, property and equipment accrued in |
$ | (2,870 | ) | $ | 9,424 | |||
| Increase in acquisition of treasury stock accrued in accrued liabilities | $ | 25,178 | $ | - | ||||
|
Chipotle Mexican Grill, Inc. |
||||||||||||||||||||
| For the three months ended | ||||||||||||||||||||
| Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | ||||||||||||||||
| 2015 | 2015 | 2015 | 2015 | 2014 | ||||||||||||||||
| Number of restaurants opened | 79 | 53 | 48 | 49 | 60 | |||||||||||||||
| Restaurant relocations | - | - | (1 | ) | (1 | ) | (1 | ) | ||||||||||||
| Number of restaurants at end of period | 2,010 | 1,931 | 1,878 | 1,831 | 1,783 | |||||||||||||||
| Average restaurant sales | $ | 2,424 | $ | 2,532 | $ | 2,530 | $ | 2,516 | $ | 2,472 | ||||||||||
| Comparable restaurant sales increase (decrease) | (14.6 | %) | 2.6 | % | 4.3 | % | 10.4 | % | 16.1 | % | ||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20160202006613/en/
Source:
Chipotle Mexican Grill, Inc.
Investor Relations:
Mark Alexee, 303-605-1042