NEWPORT BEACH, Calif.,
Feb. 4, 2020 /PRNewswire/
-- Chipotle Mexican Grill, Inc. (NYSE: CMG) today reported
financial results for its fourth quarter and fiscal year ended
December 31, 2019.
Fourth quarter highlights, year over year:
- Revenue increased 17.6% to $1.4
billion
- Comparable restaurant sales increased 13.4% with no net impact
from loyalty deferral, and included 8.0% comparable restaurant
transactions growth
- Digital sales grew 78.3% and accounted for 19.6% of sales
- Restaurant level operating margin was 19.2%, an increase of 220
bps
- Diluted earnings per share was $2.55, net of a $0.31 after-tax impact from expenses related to
legal, corporate restructuring, and certain other costs, a 121.7%
increase from $1.15. Adjusted diluted
earnings per share excluding these charges was $2.86, a 66.3% increase from $1.72.1
- Opened 80 new restaurants including one relocation, and closed
three
Full year 2019 highlights, year over year:
- Revenue increased 14.8% to $5.6
billion
- Comparable restaurant sales increased 11.1%, net of 20 bps from
loyalty deferral, and included 7.0% comparable restaurant
transactions growth
- Digital sales grew 90.3% and accounted for 18.0% of sales
- Restaurant level operating margin was 20.5%, an increase of 180
bps
- Diluted earnings per share was $12.38, net of a $1.67 after-tax impact from expenses related to
legal, corporate restructuring, restaurant closure costs, and
certain other costs, a 96.2% increase from $6.31. Adjusted diluted earnings per share
excluding these charges was $14.05, a
55.1% increase from $9.06.1
- Opened 140 new restaurants including two relocations, and
closed seven
1 Adjusted net income and adjusted diluted
earnings per share are non-GAAP financial measures. Reconciliations
to GAAP measures and further information are set forth in the table
at the end of this press release.
"We had a strong ending to 2019 as Q4 marks the
eighth-consecutive quarter of accelerating comparable sales, which
highlights that running great restaurants with the right leaders
and the right culture is delivering outstanding financial
performance," said Brian Niccol,
Chief Executive Officer, Chipotle. "For the full year,
Chipotle's average unit volumes exceeded $2.2 million and digital sales surpassed a
billion dollars, showing that our key strategies are working, and
the Chipotle brand is thriving as we build a sustainable model that
helps cultivate a better world."
Fourth quarter 2019 results:
Revenue for the quarter was $1.4
billion, an increase of 17.6% from the fourth quarter of
2018. The increase in revenue was driven by a 13.4% increase in
comparable restaurant sales and new restaurant openings. Comparable
restaurant sales included no net impact from our rewards program as
deferred revenue was essentially offset by redemptions and a
refined breakage rate assumption for chips and guacamole.
Comparable restaurant sales improved primarily as a result of an
8.0% transaction growth, as well as a 5.4% increase in the average
check.
We opened a record 80 new restaurants including one relocation
during the quarter and closed three. This included 46 Chipotlanes
resulting in a total of 66 Chipotlanes at year-end. For 2020, we
anticipate opening 150-165 new restaurants with more than half
including a Chipotlane.
Food, beverage and packaging costs were 33.1% of revenue, a
decrease of 10 bps compared to the fourth quarter of 2018. The
decrease was primarily due to the benefit of menu price increases
and to a lesser extent favorable avocado pricing, partially offset
by increased costs of several other ingredients, including carne
asada and expenses related to loyalty.
Restaurant level operating margin was 19.2% in the quarter, an
improvement from 17.0% in the fourth quarter of 2018. The
improvement was driven primarily by leverage from the comparable
restaurant sales increase, partially offset by wage inflation at
the crew level and increased delivery expense.
General and administrative expenses were $112.4
million on a GAAP basis, or $106.4 million on a
non-GAAP basis, excluding $3.6 million net related to several
legal matters and $2.3 million related to transformation
expenses. Included in the legal matters this quarter was a
$10 million reserve related to the US
Attorney's investigation that began in January 2016. This brings the total reserve to
$25 million. We believe this
amount is a reasonable estimate of what we may be expected to pay
to settle this matter. While there can be no assurance that a
settlement will be reached, we have been cooperating with the
investigation and are in discussions to resolve this matter. GAAP
and non-GAAP general and administrative expenses for the fourth
quarter of 2019 also included underlying general and administrative
expenses totaling $74.9 million, $25.4
million related to non-cash stock compensation, $4.5
million related to higher bonus accruals from our strong
operating performance and payroll taxes, and $1.6
million related to our upcoming All Manager
Conference.
The GAAP effective tax rate was 28.3% in the fourth quarter of
2019, compared to 26.3% in the fourth quarter of 2018. The
increase was primarily due to current year increases in
non-deductible executive compensation. On a non-GAAP basis, the
2019 fourth quarter effective tax rate was 27.0%.
Net income for the fourth quarter of 2019 was $72.4 million, or $2.55 per diluted share, compared to net income
of $32.0 million, or $1.15 per diluted share, in the fourth quarter of
2018. Excluding the impact of legal expenses, corporate
restructuring, and certain other costs, adjusted net income was
$81.0 million and adjusted diluted
earnings per share was $2.86.
During the quarter, our Board of Directors approved the
investment of up to an additional $100
million, exclusive of commissions, to repurchase shares of
our common stock, subject to market conditions. This repurchase
authorization, in addition to approximately $69.4 million available as of December 31, 2019, for repurchases under a
previously announced repurchase authorization, may be modified,
suspended, or discontinued at any time.
Full year 2019 results:
Revenue for 2019 was $5.6 billion,
an increase of 14.8% from 2018. The increase in revenue was driven
by a 11.1% increase in comparable restaurant sales net of 20 bps
from loyalty deferral, and new restaurant openings. Comparable
restaurant sales improved primarily as a result of a 7.0%
transaction growth, as well as a 4.1% increase in the average
check.
We opened 140 new restaurants during the year, including two
relocations, and closed seven, in-line with previous guidance,
bringing the total restaurant count at year-end to 2,622.
Food, beverage and packaging costs were 33.1% of revenue, an
increase of 20 bps compared to 2018. The increase was driven by
higher costs of several ingredients including carne asada, dairy,
avocados, and expenses related to loyalty, partially offset by the
benefit of menu price increases.
Restaurant level operating margin was 20.5% for 2019, an
improvement from 18.7% in 2018. The improvement was driven
primarily by leverage from the comparable restaurant sales
increase, partially offset by higher food costs, wage inflation at
the crew level, increased delivery expense, and increased marketing
spend.
General and administrative expenses were $451.6
million on a GAAP basis, or $406.9 million on a
non-GAAP basis, excluding $30.8 million net related to
several legal matters and $13.9 million related to
transformation expenses, restaurant closure costs and certain other
costs. GAAP and non-GAAP general and administrative expenses for
the full year also included underlying general and administrative
expenses totaling $293.0 million, $90.4
million related to non-cash stock compensation, $19.3
million related to higher bonus accruals from our strong
operating performance and payroll taxes, and $4.2
million related to our upcoming All Manager
Conference.
The GAAP effective tax rate was 23.6% in 2019, compared to 34.2%
in 2018. The decrease was primarily due to excess benefits
from stock-based compensation and a year over year decrease in tax
expense related to expirations of stock-based awards, partially
offset by current year increases in non-deductible executive
compensation. On a non-GAAP basis, the 2019 full year effective tax
rate was 22.4%.
Net income for 2019 was $350.2
million, or $12.38 per diluted
share, compared to net income of $176.6
million, or $6.31 per diluted
share for 2018. Excluding the impact of legal expenses, corporate
restructuring, restaurant asset impairment, and certain other
costs, adjusted net income was $397.7
million and adjusted diluted earnings per share was
$14.05.
Outlook
For 2020, management is anticipating the following:
- Mid-single digit comparable restaurant sales growth
- 150 to 165 new restaurant openings
- An estimated effective full year tax rate between 26% and
29%
Definitions
The following definitions apply to these terms as used
throughout this release:
- Comparable restaurant sales, or sales comps, and comparable
restaurant transactions, represent the change in
period-over-period sales or transactions 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 direct restaurant operating costs, expressed as a
percent of total revenue.
Conference Call Details
Chipotle will host a conference call to discuss fourth
quarter and full year 2019 financial results on Tuesday, February 4, 2020, at 4:30 PM Eastern time.
The conference call can be accessed live over the phone by
dialing 1-888-317-6003 or for international callers by dialing
1-412-317-6061 and use code: 7638969. The call will be webcast live
from the company's website on the investor relations page at
ir.chipotle.com/events. An archived webcast will be available
approximately one hour after the end of the call.
About Chipotle
Chipotle Mexican Grill, Inc. (NYSE: CMG) is cultivating a better
world by serving responsibly sourced, classically-cooked, real food
with wholesome ingredients without artificial colors, flavors or
preservatives. Chipotle had over 2,600 restaurants as of
December 30, 2019, in the United States, Canada, the United
Kingdom, France and
Germany and is the only restaurant
company of its size that owns and operates all its restaurants.
With more than 83,000 employees passionate about providing a great
guest experience, Chipotle is a longtime leader and innovator in
the food industry. Chipotle is committed to making its food more
accessible to everyone while continuing to be a brand with a
demonstrated purpose as it leads the way in digital, technology and
sustainable business practices. Steve
Ells, founder and executive chairman, first opened Chipotle
with a single restaurant in Denver,
Colorado in 1993. For more information or to place an order
online, visit WWW.CHIPOTLE.COM.
Forward-Looking Statements
Certain statements in this press release, including
statements under the heading "Outlook" about our anticipated
comparable restaurant sales, effective tax rate and estimated
number of new restaurant openings in 2020, 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", "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 currently available operating,
financial and competitive information available to us as of the
date of this release 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, including but
not limited to: risks of food safety and food-borne illnesses and
other health concerns about our food; risks associated with our
reliance on certain information technology systems and potential
failures or interruptions; privacy and cyber security risks related
to our acceptance of electronic payments or electronic processing
of confidential customer or employee information; the impact of
competition, including from sources outside the restaurant
industry; the increasingly competitive labor market and our ability
to attract and retain qualified employees; the impact of federal,
state or local government regulations relating to our employees,
restaurant design and construction, or the sale of food or
alcoholic beverages; our ability to achieve our planned growth,
such as the availability of suitable new restaurant sites;
increases in ingredient and other operating costs due to our Food
With Integrity philosophy, tariffs or trade restrictions and supply
shortages; the uncertainty of our ability to achieve expected
levels of comparable restaurant sales due to factors such as
changes in consumers' perceptions of our brand, including as a
result of actual or rumored food safety concerns or other negative
publicity, decreased overall consumer spending, or the inability to
increase menu prices or realize the benefits of menu price
increases; risks associated with our increased focus on our digital
business, including risks arising from our reliance on third party
delivery services; risks relating to litigation, including possible
governmental actions related to food safety incidents and potential
class action litigation regarding employment laws, advertising
claims or other matters; and other risk factors described from time
to time in our SEC reports, including our annual report on Form
10-K and quarterly reports on Form 10-Q, all of which are available
on the investor relations page of our website at
ir.Chipotle.com.
CHIPOTLE MEXICAN
GRILL, INC.
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(in thousands,
except per share data)
|
(unaudited)
|
|
|
Three months ended
December 31,
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
1,440,224
|
|
100.0
|
%
|
|
$
|
1,225,061
|
|
100.0
|
%
|
Restaurant operating
costs (exclusive of depreciation and amortization shown separately
below):
|
|
|
|
|
|
|
|
|
|
|
|
Food, beverage and
packaging
|
|
476,769
|
|
33.1
|
|
|
|
406,536
|
|
33.2
|
|
Labor
|
|
381,520
|
|
26.5
|
|
|
|
332,509
|
|
27.1
|
|
Occupancy
|
|
92,970
|
|
6.5
|
|
|
|
88,404
|
|
7.2
|
|
Other operating
costs
|
|
212,520
|
|
14.8
|
|
|
|
189,303
|
|
15.5
|
|
General and
administrative expenses
|
|
112,416
|
|
7.8
|
|
|
|
103,720
|
|
8.5
|
|
Depreciation and
amortization
|
|
55,149
|
|
3.8
|
|
|
|
53,217
|
|
4.3
|
|
Pre-opening
costs
|
|
4,986
|
|
0.3
|
|
|
|
1,756
|
|
0.1
|
|
Impairment, closure
costs, and asset disposals
|
|
5,738
|
|
0.4
|
|
|
|
10,004
|
|
0.8
|
|
Total operating
expenses
|
|
1,342,068
|
|
93.2
|
|
|
|
1,185,449
|
|
96.8
|
|
Income from
operations
|
|
98,156
|
|
6.8
|
|
|
|
39,612
|
|
3.2
|
|
Interest and other
income, net
|
|
2,840
|
|
0.2
|
|
|
|
3,858
|
|
0.3
|
|
Income before income
taxes
|
|
100,996
|
|
7.0
|
|
|
|
43,470
|
|
3.5
|
|
Provision for income
taxes
|
|
(28,580)
|
|
(2.0)
|
|
|
|
(11,451)
|
|
(0.9)
|
|
Net income
|
$
|
72,416
|
|
5.0
|
%
|
|
$
|
32,019
|
|
2.6
|
%
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
2.61
|
|
|
|
|
$
|
1.15
|
|
|
|
Diluted
|
$
|
2.55
|
|
|
|
|
$
|
1.15
|
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
27,769
|
|
|
|
|
|
27,763
|
|
|
|
Diluted
|
|
28,372
|
|
|
|
|
|
27,946
|
|
|
|
CHIPOTLE MEXICAN
GRILL, INC.
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(in thousands,
except per share data)
|
|
|
Year ended
December 31,
|
|
2019
|
|
2018
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
5,586,369
|
|
100.0
|
%
|
|
$
|
4,864,985
|
|
100.0
|
%
|
Restaurant operating
costs (exclusive of depreciation and amortization shown separately
below):
|
|
|
|
|
|
|
|
|
|
|
|
Food, beverage and
packaging
|
|
1,847,916
|
|
33.1
|
|
|
|
1,600,760
|
|
32.9
|
|
Labor
|
|
1,472,060
|
|
26.4
|
|
|
|
1,326,079
|
|
27.3
|
|
Occupancy
|
|
363,072
|
|
6.5
|
|
|
|
347,123
|
|
7.1
|
|
Other operating
costs
|
|
760,831
|
|
13.6
|
|
|
|
680,031
|
|
14.0
|
|
General and
administrative expenses
|
|
451,552
|
|
8.1
|
|
|
|
375,460
|
|
7.7
|
|
Depreciation and
amortization
|
|
212,778
|
|
3.8
|
|
|
|
201,979
|
|
4.2
|
|
Pre-opening
costs
|
|
11,108
|
|
0.2
|
|
|
|
8,546
|
|
0.2
|
|
Impairment, closure
costs, and asset disposals
|
|
23,094
|
|
0.4
|
|
|
|
66,639
|
|
1.4
|
|
Total operating
expenses
|
|
5,142,411
|
|
92.1
|
|
|
|
4,606,617
|
|
94.7
|
|
Income from
operations
|
|
443,958
|
|
7.9
|
|
|
|
258,368
|
|
5.3
|
|
Interest and other
income, net
|
|
14,327
|
|
0.3
|
|
|
|
10,068
|
|
0.2
|
|
Income before income
taxes
|
|
458,285
|
|
8.2
|
|
|
|
268,436
|
|
5.5
|
|
Provision for income
taxes
|
|
(108,127)
|
|
(1.9)
|
|
|
|
(91,883)
|
|
(1.9)
|
|
Net income
|
$
|
350,158
|
|
6.3
|
%
|
|
$
|
176,553
|
|
3.6
|
%
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
12.62
|
|
|
|
|
$
|
6.35
|
|
|
|
Diluted
|
$
|
12.38
|
|
|
|
|
$
|
6.31
|
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
27,740
|
|
|
|
|
|
27,823
|
|
|
|
Diluted
|
|
28,295
|
|
|
|
|
|
27,962
|
|
|
|
CHIPOTLE MEXICAN
GRILL, INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(in thousands,
except per share data)
|
|
|
December
31,
|
|
2019
|
|
2018
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
480,626
|
|
$
|
249,953
|
Accounts receivable,
net
|
|
80,545
|
|
|
62,312
|
Inventory
|
|
26,096
|
|
|
21,555
|
Prepaid expenses and
other current assets
|
|
57,076
|
|
|
54,129
|
Income tax
receivable
|
|
27,705
|
|
|
-
|
Investments
|
|
400,156
|
|
|
426,845
|
Total current
assets
|
|
1,072,204
|
|
|
814,794
|
Leasehold
improvements, property and equipment, net
|
|
1,458,690
|
|
|
1,379,254
|
Restricted
cash
|
|
27,855
|
|
|
30,199
|
Operating lease
assets
|
|
2,505,466
|
|
|
-
|
Other
assets
|
|
18,450
|
|
|
19,332
|
Goodwill
|
|
21,939
|
|
|
21,939
|
Total
assets
|
$
|
5,104,604
|
|
$
|
2,265,518
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
115,816
|
|
$
|
113,071
|
Accrued payroll and
benefits
|
|
126,600
|
|
|
113,467
|
Accrued
liabilities
|
|
155,843
|
|
|
147,849
|
Unearned
revenue
|
|
95,195
|
|
|
70,474
|
Current operating
lease liabilities
|
|
173,139
|
|
|
-
|
Income tax
payable
|
|
-
|
|
|
5,129
|
Total current
liabilities
|
|
666,593
|
|
|
449,990
|
Deferred
rent
|
|
-
|
|
|
330,985
|
Long-term operating
lease liabilities
|
|
2,678,374
|
|
|
-
|
Deferred income tax
liabilities
|
|
37,814
|
|
|
11,566
|
Other
liabilities
|
|
38,797
|
|
|
31,638
|
Total
liabilities
|
|
3,421,578
|
|
|
824,179
|
Shareholders'
equity:
|
|
|
|
|
|
Preferred stock, $0.01
par value, 600,000 shares authorized, no shares issued as of
December 31, 2019 and 2018, respectively
|
|
-
|
|
|
-
|
Common stock, $0.01
par value, 230,000 shares authorized, 36,323 and 35,973 shares
issued as of December 31, 2019 and 2018, respectively
|
|
363
|
|
|
360
|
Additional paid-in
capital
|
|
1,465,697
|
|
|
1,374,154
|
Treasury stock, at
cost, 8,568 and 8,276 common shares as of December 31, 2019 and
2018, respectively
|
|
(2,699,119)
|
|
|
(2,500,556)
|
Accumulated other
comprehensive loss
|
|
(5,363)
|
|
|
(6,236)
|
Retained
earnings
|
|
2,921,448
|
|
|
2,573,617
|
Total shareholders'
equity
|
|
1,683,026
|
|
|
1,441,339
|
Total liabilities and
shareholders' equity
|
$
|
5,104,604
|
|
$
|
2,265,518
|
CHIPOTLE MEXICAN
GRILL, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
|
|
Year ended
December 31,
|
|
2019
|
|
2018
|
|
(unaudited)
|
|
|
Operating
activities
|
|
|
|
|
|
Net income
|
$
|
350,158
|
|
$
|
176,553
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
212,778
|
|
|
201,979
|
Amortization of
operating lease assets
|
|
163,952
|
|
|
-
|
Deferred income tax
(benefit) provision
|
|
29,962
|
|
|
10,585
|
Impairment, closure
costs, and asset disposals
|
|
15,402
|
|
|
61,987
|
Bad debt
allowance
|
|
33
|
|
|
125
|
Stock-based
compensation expense
|
|
91,396
|
|
|
69,164
|
Other
|
|
(10,592)
|
|
|
(2,918)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
Accounts
receivable
|
|
(2,630)
|
|
|
(8,298)
|
Inventory
|
|
(4,530)
|
|
|
(1,722)
|
Prepaid expenses and
other current assets
|
|
(23,066)
|
|
|
(3,811)
|
Other
assets
|
|
2,818
|
|
|
(2,005)
|
Accounts
payable
|
|
(973)
|
|
|
32,080
|
Accrued payroll and
benefits
|
|
11,759
|
|
|
29,568
|
Accrued
liabilities
|
|
36,543
|
|
|
14,831
|
Unearned
revenue
|
|
30,400
|
|
|
6,829
|
Income tax
payable/receivable
|
|
(32,083)
|
|
|
14,439
|
Deferred
rent
|
|
-
|
|
|
21,297
|
Operating lease
liabilities
|
|
(151,557)
|
|
|
-
|
Other long-term
liabilities
|
|
1,862
|
|
|
869
|
Net cash provided by
operating activities
|
|
721,632
|
|
|
621,552
|
Investing
activities
|
|
|
|
|
|
Purchases of
leasehold improvements, property and equipment
|
|
(333,912)
|
|
|
(287,390)
|
Purchases of
investments
|
|
(448,754)
|
|
|
(485,188)
|
Maturities of
investments
|
|
476,723
|
|
|
385,000
|
Proceeds from sale of
equipment
|
|
13,969
|
|
|
-
|
Net cash used in
investing activities
|
|
(291,974)
|
|
|
(387,578)
|
Financing
activities
|
|
|
|
|
|
Acquisition of
treasury stock
|
|
(190,617)
|
|
|
(160,937)
|
Tax withholding on
stock-based compensation awards
|
|
(10,420)
|
|
|
(5,411)
|
Stock plan
transactions and other financing activities
|
|
(698)
|
|
|
(187)
|
Net cash used in
financing activities
|
|
(201,735)
|
|
|
(166,535)
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
|
406
|
|
|
(1,457)
|
Net change in cash,
cash equivalents, and restricted cash
|
|
228,329
|
|
|
65,982
|
Cash, cash
equivalents, and restricted cash at beginning of period
|
|
280,152
|
|
|
214,170
|
Cash, cash
equivalents, and restricted cash at end of period
|
$
|
508,481
|
|
$
|
280,152
|
Supplemental
disclosures of cash flow information
|
|
|
|
|
|
Income taxes
paid
|
$
|
109,571
|
|
$
|
67,053
|
Purchases of
leasehold improvements, property, and equipment accrued in accounts
payable and accrued liabilities
|
$
|
36,886
|
|
$
|
30,870
|
Acquisition of
treasury stock accrued in accounts payable and accrued
liabilities
|
$
|
-
|
|
$
|
2,474
|
CHIPOTLE MEXICAN
GRILL, INC.
|
SUPPLEMENTAL
FINANCIAL AND OTHER DATA
|
(dollars in
thousands)
|
|
|
|
For the three
months ended
|
|
|
Dec.
31,
|
|
Sep.
30,
|
|
Jun.
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
|
2019
|
|
2019
|
|
2019
|
|
2019
|
|
2018
|
Number of restaurants
opened
|
|
|
80
|
|
|
25
|
|
|
20
|
|
|
15
|
|
|
40
|
Restaurant
closures
|
|
|
(3)
|
|
|
(1)
|
|
|
(1)
|
|
|
(2)
|
|
|
(8)
|
Restaurant
relocations
|
|
|
(1)
|
|
|
(1)
|
|
|
-
|
|
|
-
|
|
|
(4)
|
Number of restaurants
at end of period
|
|
|
2,622
|
|
|
2,546
|
|
|
2,523
|
|
|
2,504
|
|
|
2,491
|
Average restaurant
sales
|
|
$
|
2,221
|
|
$
|
2,154
|
|
$
|
2,099
|
|
$
|
2,048
|
|
$
|
2,004
|
Comparable restaurant
sales increase
|
|
|
13.4%
|
|
|
11.0%
|
|
|
10.0%
|
|
|
9.9%
|
|
|
6.1%
|
CHIPOTLE MEXICAN GRILL, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except per share amounts)
(unaudited)
The following table provides a reconciliation of non-GAAP
financial measures presented in the text above to the most directly
comparable financial measures calculated and presented in
accordance with GAAP.
Adjusted net income is net income excluding restaurant asset
impairment, corporate restructuring, distinct legal proceedings,
and certain other costs. Adjusted general and administrative
expense is general and administrative expense excluding distinct
legal proceedings and transformation expenses. We present these
non-GAAP measures in order to facilitate meaningful evaluation of
our operating performance across periods. These adjustments are
intended to provide greater transparency of underlying performance
and to allow investors to evaluate our business on the same basis
as our management, which uses these non-GAAP measures in evaluating
the company's performance. Our adjusted net income, adjusted
diluted earnings per share, and adjusted general and administrative
expenses measures may not be comparable to other companies'
adjusted measures. These adjustments are not necessarily indicative
of what our actual financial performance would have been during the
periods presented and should be viewed in addition to, and not as
an alternative to, our results prepared in accordance with GAAP.
Further details regarding these adjustments are included in the
tables below.
Adjusted Net
Income and Adjusted Diluted Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
December
31,
|
|
December
31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income
|
$
|
72,416
|
|
$
|
32,019
|
|
$
|
350,158
|
|
$
|
176,553
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant closure
costs:
|
|
|
|
|
|
|
|
|
|
|
|
Operating lease asset
impairment and other restaurant closure
costs(1)
|
|
2,523
|
|
|
5,931
|
|
|
3,285
|
|
|
35,752
|
Accelerated
depreciation(2)
|
|
-
|
|
|
1,027
|
|
|
109
|
|
|
6,570
|
Duplicate rent
expense(3)
|
|
229
|
|
|
-
|
|
|
1,270
|
|
|
-
|
Corporate
Restructuring:
|
|
|
|
|
|
|
|
|
|
|
|
Operating lease asset
impairment and other office closure costs(4)
|
|
-
|
|
|
348
|
|
|
1,719
|
|
|
15,571
|
Accelerated
depreciation(2)
|
|
-
|
|
|
283
|
|
|
83
|
|
|
720
|
Duplicate rent
expense(3)
|
|
944
|
|
|
1,565
|
|
|
4,045
|
|
|
2,518
|
Employee related
restructuring costs(5)
|
|
1,176
|
|
|
12,178
|
|
|
8,552
|
|
|
24,534
|
Legal expenses,
net(6)
|
|
3,635
|
|
|
-
|
|
|
30,785
|
|
|
-
|
Other
adjustments(7)
|
|
1,431
|
|
|
1,396
|
|
|
4,469
|
|
|
5,040
|
Total non-GAAP
adjustments
|
$
|
9,938
|
|
$
|
22,728
|
|
$
|
54,317
|
|
$
|
90,705
|
Tax effect of
non-GAAP adjustments(8)
|
|
(1,332)
|
|
|
(6,694)
|
|
|
(6,810)
|
|
|
(13,852)
|
After tax impact of
non-GAAP adjustments
|
$
|
8,606
|
|
$
|
16,034
|
|
$
|
47,507
|
|
$
|
76,853
|
Adjusted net
income
|
$
|
81,022
|
|
$
|
48,053
|
|
$
|
397,665
|
|
$
|
253,406
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted-average number of common shares outstanding
|
|
28,372
|
|
|
27,946
|
|
|
28,295
|
|
|
27,962
|
Diluted earnings per
share
|
$
|
2.55
|
|
$
|
1.15
|
|
$
|
12.38
|
|
$
|
6.31
|
Adjusted diluted
earnings per share
|
$
|
2.86
|
|
$
|
1.72
|
|
$
|
14.05
|
|
$
|
9.06
|
|
(1) Operating lease
asset impairment charges, and other closure expenses for restaurant
closures due to underperformance.
|
(2) Accelerated
depreciation for restaurant and office closures announced in June
2018 due to underperformance and the corporate
restructuring.
|
(3) Duplicate rent
expense for the corporate headquarter relocation and office
consolidation announced in May 2018 and rent expense for closed
restaurants for the announced restaurant closures in June
2018.
|
(4) Asset impairment
charges and other closure expenses for the corporate headquarter
relocation and office consolidation announced in May
2018.
|
(5) Costs for
employee severance, stock modifications, transition expenses,
recruitment, relocation costs, third party and other
employee-related costs.
|
(6) Charges relate to
settlements for several distinct legal matters, net of reversals of
prior amounts. These amounts are expected to exceed typical
costs for these types of legal proceedings.
|
(7) The three months
ended December 31, 2019, consists of interest expense related to an
uncertain tax position for the 2017 data breach. The year ended
December 31, 2019, consists of an asset impairment charge related
to our company-owned aircraft and interest expense related to an
uncertain tax position for the 2017 data breach.
|
(8) The three months
ended December 31, 2019, includes a write-off of deferred tax
assets related to expired share awards of $940. The year
ended December 31, 2019, includes a write-off of deferred tax
assets related to expired share awards of $2,523.
|
CHIPOTLE MEXICAN
GRILL, INC.
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
(in thousands,
except per share amounts)
|
(unaudited)
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
December 31,
2019
|
|
December 31,
2019
|
General and
administrative expenses
|
$
|
112,416
|
|
$
|
451,552
|
Non-GAAP
adjustments:
|
|
|
|
|
|
Legal expenses,
net(1)
|
|
(3,635)
|
|
|
(30,785)
|
Transformation
expenses(2)
|
|
(2,349)
|
|
|
(13,867)
|
Total non-GAAP
adjustments
|
$
|
(5,984)
|
|
$
|
(44,652)
|
Adjusted general and
administrative expenses
|
$
|
106,432
|
|
$
|
406,900
|
|
(1) Charges relate to
settlements for several distinct legal matters, net of reversals of
prior amounts. These amounts are expected to exceed typical costs
for these types of legal proceedings.
|
(2) Transformation
expenses include duplicate rent expense for office and restaurant
closures announced in June 2018 due to the corporate restructuring
and underperformance of $1,173 an $5,315 for the three and twelve
months ended December 31, 2019, respectively and employee related
restructuring costs of $1,176 and $8,552 for the three and twelve
months ended December 31, 2019, respectively.
|
CHIPOTLE MEXICAN
GRILL, INC.
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
(in thousands,
except per share amounts)
|
(unaudited)
|
|
|
Three months
ended
December 31,
|
|
Year ended
December 31,
|
|
2019
|
|
2019
|
Effective income tax
rate
|
28.3
|
%
|
|
23.6
|
%
|
Tax effect of
non-GAAP adjustments
|
(1.3)
|
|
|
(1.2)
|
|
Adjusted income tax
rate
|
27.0
|
%
|
|
22.4
|
%
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/chipotle-announces-fourth-quarter-and-full-year-2019-results-300998906.html
SOURCE Chipotle Mexican Grill