CHIPOTLE ANNOUNCES SECOND QUARTER 2024 RESULTS
Chipotle Mexican Grill (NYSE: CMG) reported strong second quarter 2024 results, with total revenue increasing 18.2% to $3.0 billion. Comparable restaurant sales rose 11.1%, driven by an 8.7% increase in transactions and a 2.4% increase in average check. The company's operating margin expanded to 19.7%, up from 17.2% in the previous year. Diluted earnings per share grew 32.0% to $0.33, while adjusted diluted EPS increased 36.0% to $0.34.
Chipotle opened 52 new company-operated restaurants during the quarter, with 46 locations including a Chipotlane. Digital sales represented 35.3% of total food and beverage revenue. The company also completed a 50-for-1 stock split and repurchased $151.4 million of stock. For the full year 2024, Chipotle anticipates mid to high-single digit comparable restaurant sales growth and plans to open 285 to 315 new restaurants.
Chipotle Mexican Grill (NYSE: CMG) ha riportato risultati robusti per il secondo trimestre del 2024, con un aumento del fatturato totale del 18,2% a 3,0 miliardi di dollari. Le vendite comparabili dei ristoranti sono aumentate dell'11,1%, trainate da un incremento delle transazioni dell'8,7% e un aumento del 2,4% nel controllo medio. Il margine operativo dell'azienda è cresciuto al 19,7%, rispetto al 17,2% dell'anno precedente. Gli utili per azione diluiti sono aumentati del 32,0% a 0,33 dollari, mentre l'EPS diluito rettificato è aumentato del 36,0% a 0,34 dollari.
Chipotle ha aperto 52 nuovi ristoranti operati dall'azienda durante il trimestre, con 46 sedi che includono un Chipotlane. Le vendite digitali hanno rappresentato il 35,3% del fatturato totale di cibo e bevande. L'azienda ha anche completato uno split azionario di 50 per 1 e riacquistato azioni per 151,4 milioni di dollari. Per l'intero anno 2024, Chipotle prevede una crescita delle vendite comparabili dei ristoranti a una cifra media-alta e progetta di aprire da 285 a 315 nuovi ristoranti.
Chipotle Mexican Grill (NYSE: CMG) reportó resultados sólidos para el segundo trimestre de 2024, con un aumento del ingreso total del 18,2% a 3,0 mil millones de dólares. Las ventas comparables de restaurantes crecieron un 11,1%, impulsadas por un incremento del 8,7% en las transacciones y un aumento del 2,4% en el ticket promedio. El margen operativo de la compañía se expandió al 19,7%, en comparación con el 17,2% del año anterior. Las ganancias por acción diluidas crecieron un 32,0% a $0,33, mientras que el EPS diluido ajustado aumentó un 36,0% a $0,34.
Chipotle abrió 52 nuevos restaurantes operados por la empresa durante el trimestre, con 46 ubicaciones que incluyen un Chipotlane. Las ventas digitales representaron el 35,3% del ingreso total de alimentos y bebidas. La compañía también completó un desdoblamiento de acciones de 50 por 1 y recompró acciones por un total de 151,4 millones de dólares. Para el año completo de 2024, Chipotle anticipa un crecimiento en las ventas comparables de restaurantes de un dígito medio a alto y planea abrir entre 285 y 315 nuevos restaurantes.
치폴레 멕시칸 그릴(뉴욕증권거래소: CMG)은 2024년 2분기 실적을 발표하며 총 수익이 18.2% 증가하여 30억 달러에 이르렀습니다. 비교 가능한 레스토랑 판매는 11.1% 증가하였으며, 이는 거래량이 8.7% 증가하고 평균 체크가 2.4% 증가한 결과입니다. 회사의 영업 마진은 17.2%에서 19.7%로 확대되었습니다. 희석 주당 순이익은 32.0% 증가한 0.33달러에 달했고, 조정된 희석 EPS는 36.0% 증가하여 0.34달러에 이르렀습니다.
치폴레는 이번 분기에 52개의 새로운 직영 레스토랑을 열었고, 그 중 46개는 치폴라인을 포함합니다. 디지털 판매는 전체 음식 및 음료 수익의 35.3%를 차지했습니다. 회사는 또한 50대 1의 주식 분할을 완료하고 1억 5140만 달러의 주식을 재구매했습니다. 2024년 전체 연도에 대해 치폴레는 중에서 높은 한 자리 수의 비교 가능한 레스토랑 판매 성장을 예상하며 285개에서 315개의 새로운 레스토랑을 열 계획입니다.
Chipotle Mexican Grill (NYSE: CMG) a annoncé de solides résultats pour le 2ème trimestre 2024, avec un chiffre d'affaires total en hausse de 18,2 % à 3,0 milliards de dollars. Les ventes comparables des restaurants ont augmenté de 11,1 %, soutenues par une hausse de 8,7 % des transactions et une augmentation de 2,4 % du ticket moyen. La marge opérationnelle de l'entreprise a progressé à 19,7 %, contre 17,2 % l'année précédente. Le bénéfice par action dilué a augmenté de 32,0 % à 0,33 dollar, tandis que l'EPS dilué ajusté a crû de 36,0 % à 0,34 dollar.
Chipotle a ouvert 52 nouveaux restaurants gérés par l'entreprise au cours du trimestre, dont 46 disposent d'un Chipotlane. Les ventes digitales ont représenté 35,3 % du chiffre d'affaires total des aliments et des boissons. L'entreprise a également réalisé une division d'actions de 50 pour 1 et a racheté des actions pour un montant de 151,4 millions de dollars. Pour l'année entière 2024, Chipotle prévoit une croissance des ventes comparables des restaurants de moyen à haut chiffre unitaire et prévoit d'ouvrir entre 285 et 315 nouveaux restaurants.
Chipotle Mexican Grill (NYSE: CMG) meldete starke Ergebnisse für das 2. Quartal 2024, mit einem Umsatzanstieg von 18,2% auf 3,0 Milliarden US-Dollar. Vergleichbare Restaurantverkäufe stiegen um 11,1%, angetrieben durch einen Anstieg der Transaktionen um 8,7% und einem Anstieg des durchschnittlichen Schecks um 2,4%. Die operative Marge des Unternehmens erweiterte sich auf 19,7%, verglichen mit 17,2% im Vorjahr. Der verwässertet Gewinn pro Aktie wuchs um 32,0% auf 0,33 US-Dollar, während der bereinigte verwässerte EPS um 36,0% auf 0,34 US-Dollar zunahm.
Chipotle eröffnete im Quartal 52 neue von der Firma betriebene Restaurants, darunter 46 Standorte mit einem Chipotlane. Digitale Verkäufe machten 35,3% des Gesamterlöses aus Speisen und Getränken aus. Das Unternehmen schloss auch einen Aktiensplit im Verhältnis 50 zu 1 ab und kaufte Aktien im Wert von 151,4 Millionen US-Dollar zurück. Für das gesamte Jahr 2024 geht Chipotle von einem Wachstum der vergleichbaren Restaurantverkäufe im mittleren bis hohen einstelligen Bereich aus und plant, 285 bis 315 neue Restaurants zu eröffnen.
- Total revenue increased 18.2% year-over-year to $3.0 billion
- Comparable restaurant sales grew 11.1%, with transactions up 8.7%
- Operating margin expanded to 19.7% from 17.2% in the previous year
- Diluted EPS increased 32.0% to $0.33, adjusted diluted EPS up 36.0% to $0.34
- Opened 52 new company-operated restaurants, 46 with Chipotlanes
- Digital sales represented 35.3% of total food and beverage revenue
- Restaurant level operating margin improved to 28.9% from 27.5% year-over-year
- Food, beverage and packaging costs remained flat at 29.4% of total revenue
- Increased inflation in avocados and higher oil usage for frying chips
- Higher incidence of beef due to marketing initiatives
- Effective income tax rate increased to 25.0% from 23.8% in Q2 2023
Chipotle's Q2 2024 results demonstrate robust growth and operational efficiency. The 18.2% increase in total revenue to
The company's focus on digital sales, representing
Profitability metrics show significant improvement, with operating margin expanding to
The
Looking ahead, management's guidance of mid to high-single digit comparable restaurant sales growth for 2024, along with plans for 285-315 new restaurant openings, suggests continued momentum. However, investors should monitor potential headwinds such as ongoing inflationary pressures and the competitive landscape in the fast-casual dining sector.
Chipotle's Q2 performance underscores its strong market position and effective strategies in the fast-casual dining segment. The
The success of marketing initiatives, such as the return of Chicken Al Pastor and the Braised Beef Barbacoa, demonstrates Chipotle's ability to innovate and drive customer engagement. This is important in a competitive market where menu innovation can significantly impact consumer choice.
The continued focus on digital sales, accounting for
Chipotle's ability to maintain food costs at
The company's expansion plans, with 285-315 new restaurant openings projected for 2024, indicate confidence in market demand and the scalability of their business model. However, it will be important to monitor how this rapid expansion affects operational efficiency and brand consistency across locations.
Overall, Chipotle's performance suggests it is well-positioned to capitalize on the ongoing recovery in the restaurant sector, with strategies that align well with evolving consumer preferences and market trends.
COMPARABLE SALES INCREASE
Second quarter highlights, year over year:
- Total revenue increased
18.2% to$3.0 billion - Comparable restaurant sales increased
11.1% - Operating margin was
19.7% , an increase from17.2% - Restaurant level operating margin was
28.9% 1, an increase of 140 basis points - Diluted earnings per share was
$0.33 32.0% increase from$0.25 $0.01 $0.34 36.0% increase from$0.25 - Opened 52 new company-operated restaurants with 46 locations including a Chipotlane, and one international licensed restaurant
"The second quarter was outstanding as successful brand marketing, including the return of Chicken Al Pastor, drove strong demand to our restaurants. Our focus and training around throughput paid off as we were able to meet the stronger demand trends with terrific service and speed driving over
Common Stock Split Completed
On June 26, 2024, we executed a 50-for-1 stock split of our common stock with a record date of June 18, 2024, and proportionately increased the number of authorized shares of common stock to reflect the effect of the stock split.
Results for the three months ended June 30, 2024:
Total revenue in the second quarter was
During the second quarter we opened 52 new company-operated restaurants, of which 46 included a Chipotlane, and one international licensed restaurant. These formats continue to perform well and are helping enhance guest access and convenience, as well as increase new restaurant sales, margins, and returns.
Food, beverage and packaging costs in the second quarter of 2024 were
Restaurant level operating margin in the second quarter was
General and administrative expenses for the second quarter were
The effective income tax rate for the second quarter was
Net income for the second quarter was
During the second quarter we repurchased
More information will be available in our Quarterly Report on Form 10-Q, which will be filed with the SEC by the end of July.
Outlook
For 2024, management is anticipating the following:
- Full year comparable restaurant sales growth in the mid to high-single digit range
- 285 to 315 new restaurant openings with over
80% having a Chipotlane - An estimated underlying effective full year tax rate between
25% and27% before discrete items
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 total revenue or transactions for restaurants in operation for at least 13 full calendar months.
- Average restaurant sales refer to the average trailing 12-month food and beverage revenue 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.
- Digital sales represent food and beverage revenue generated through the Chipotle website, Chipotle app or third-party delivery aggregators. Digital sales include revenue deferrals associated with Chipotle Rewards.
Conference Call Details
Chipotle will host a conference call on Wednesday, July 24, 2024, at 4:30 PM Eastern time to discuss second quarter 2024 financial results as well as provide a business update for the third quarter 2024.
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: 5419901. 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. There are over 3,500 restaurants as of June 30, 2024, in
Forward-Looking Statements
Certain statements in this press release and in the July 24, 2024, conference call are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements under "Outlook" about our anticipated full year 2024 comparable restaurant sales growth, goals for number of new restaurant openings, and estimated underlying effective full year tax rate, as well as statements about expected restaurants with Chipotlanes, our ability to achieve our long-term target of more than doubling our business in
1 | Restaurant level operating margin, adjusted diluted earnings per share, adjusted net income, non-GAAP general and administrative expenses, and non-GAAP effective income tax rate 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. |
CHIPOTLE MEXICAN GRILL, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) (unaudited) | |||||||
Three months ended June 30, | |||||||
2024 | 2023 | ||||||
Food and beverage revenue | $ 2,954,913 | 99.4 % | $ 2,497,509 | 99.3 % | |||
Delivery service revenue | 18,204 | 0.6 | 17,292 | 0.7 | |||
Total revenue | 2,973,117 | 100.0 | 2,514,801 | 100.0 | |||
Restaurant operating costs (exclusive of depreciation and amortization shown separately below): | |||||||
Food, beverage and packaging | 873,673 | 29.4 | 738,664 | 29.4 | |||
Labor | 716,627 | 24.1 | 611,678 | 24.3 | |||
Occupancy | 138,663 | 4.7 | 123,897 | 4.9 | |||
Other operating costs | 384,754 | 12.9 | 349,707 | 13.9 | |||
General and administrative expenses | 175,028 | 5.9 | 156,496 | 6.2 | |||
Depreciation and amortization | 83,562 | 2.8 | 78,771 | 3.1 | |||
Pre-opening costs | 8,995 | 0.3 | 7,538 | 0.3 | |||
Impairment, closure costs, and asset disposals | 5,762 | 0.2 | 16,240 | 0.6 | |||
Total operating expenses | 2,387,064 | 80.3 | 2,082,991 | 82.8 | |||
Income from operations | 586,053 | 19.7 | 431,810 | 17.2 | |||
Interest and other income, net | 21,861 | 0.7 | 16,446 | 0.7 | |||
Income before income taxes | 607,914 | 20.4 | 448,256 | 17.8 | |||
Provision for income taxes | 152,243 | 5.1 | 106,466 | 4.2 | |||
Net income | $ 455,671 | 15.3 % | $ 341,790 | 13.6 % | |||
Earnings per share: | |||||||
Basic | $ 0.33 | $ 0.25 | |||||
Diluted | $ 0.33 | $ 0.25 | |||||
Weighted-average common shares outstanding: | |||||||
Basic | 1,372,800 | 1,380,222 | |||||
Diluted | 1,381,518 | 1,387,372 | |||||
CHIPOTLE MEXICAN GRILL, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) (unaudited) | |||||||
Six months ended June 30, | |||||||
2024 | 2023 | ||||||
Food and beverage revenue | $ 5,639,361 | 99.4 % | $ 4,848,518 | 99.3 % | |||
Delivery service revenue | 35,605 | 0.6 | 34,863 | 0.7 | |||
Total revenue | 5,674,966 | 100.0 | 4,883,381 | 100.0 | |||
Restaurant operating costs (exclusive of depreciation and amortization shown separately below): | |||||||
Food, beverage and packaging | 1,652,749 | 29.1 | 1,431,223 | 29.3 | |||
Labor | 1,376,077 | 24.2 | 1,195,472 | 24.5 | |||
Occupancy | 274,362 | 4.8 | 245,828 | 5.0 | |||
Other operating costs | 770,528 | 13.6 | 712,913 | 14.6 | |||
General and administrative expenses | 379,653 | 6.7 | 304,836 | 6.2 | |||
Depreciation and amortization | 166,805 | 2.9 | 155,356 | 3.2 | |||
Pre-opening costs | 16,206 | 0.3 | 13,736 | 0.3 | |||
Impairment, closure costs, and asset disposals | 11,241 | 0.2 | 24,601 | 0.5 | |||
Total operating expenses | 4,647,621 | 81.9 | 4,083,965 | 83.6 | |||
Income from operations | 1,027,345 | 18.1 | 799,416 | 16.4 | |||
Interest and other income, net | 41,225 | 0.7 | 25,395 | 0.5 | |||
Income before income taxes | 1,068,570 | 18.8 | 824,811 | 16.9 | |||
Provision for income taxes | 253,612 | 4.5 | 191,377 | 3.9 | |||
Net income | $ 814,958 | 14.4 % | $ 633,434 | 13.0 % | |||
Earnings per share: | |||||||
Basic | $ 0.59 | $ 0.46 | |||||
Diluted | $ 0.59 | $ 0.46 | |||||
Weighted-average common shares outstanding: | |||||||
Basic | 1,372,488 | 1,380,711 | |||||
Diluted | 1,381,347 | 1,388,386 | |||||
CHIPOTLE MEXICAN GRILL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) | |||
June 30, | December 31, | ||
(unaudited) | |||
Assets | |||
Current assets: | |||
Cash and cash equivalents | $ 806,528 | $ 560,609 | |
Accounts receivable, net | 97,542 | 115,535 | |
Inventory | 35,560 | 39,309 | |
Prepaid expenses and other current assets | 91,852 | 117,462 | |
Income tax receivable | 71,529 | 52,960 | |
Investments | 683,287 | 734,838 | |
Total current assets | 1,786,298 | 1,620,713 | |
Leasehold improvements, property and equipment, net | 2,265,694 | 2,170,038 | |
Long-term investments | 972,644 | 564,488 | |
Restricted cash | 27,664 | 25,554 | |
Operating lease assets | 3,770,997 | 3,578,548 | |
Other assets | 74,599 | 63,082 | |
Goodwill | 21,939 | 21,939 | |
Total assets | $ 8,919,835 | $ 8,044,362 | |
Liabilities and shareholders' equity | |||
Current liabilities: | |||
Accounts payable | $ 203,480 | $ 197,646 | |
Accrued payroll and benefits | 223,410 | 227,537 | |
Accrued liabilities | 169,631 | 147,688 | |
Unearned revenue | 182,331 | 209,680 | |
Current operating lease liabilities | 264,304 | 248,074 | |
Total current liabilities | 1,043,156 | 1,030,625 | |
Long-term operating lease liabilities | 4,014,454 | 3,803,551 | |
Deferred income tax liabilities | 83,298 | 89,109 | |
Other liabilities | 67,107 | 58,870 | |
Total liabilities | 5,208,015 | 4,982,155 | |
Shareholders' equity: | |||
Preferred stock, | - | - | |
Common stock, | 13,713 | 18,741 | |
Additional paid-in capital | 2,023,802 | 1,937,794 | |
Treasury stock, at cost, 0 and 502,843 common shares as of June 30, 2024 and | - | (4,944,656) | |
Accumulated other comprehensive loss | (8,514) | (6,657) | |
Retained earnings | 1,682,819 | 6,056,985 | |
Total shareholders' equity | 3,711,820 | 3,062,207 | |
Total liabilities and shareholders' equity | $ 8,919,835 | $ 8,044,362 | |
CHIPOTLE MEXICAN GRILL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) | |||
Six months ended June 30, | |||
2024 | 2023 | ||
Operating activities | |||
Net income | $ 814,958 | $ 633,434 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 166,805 | 155,356 | |
Deferred income tax provision | (5,826) | 7,827 | |
Impairment, closure costs, and asset disposals | 9,917 | 24,173 | |
Provision for credit losses | (155) | 312 | |
Stock-based compensation expense | 81,243 | 50,756 | |
Other | 4,511 | (9,237) | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 18,331 | 44,027 | |
Inventory | 3,763 | (313) | |
Prepaid expenses and other current assets | 20,348 | (21,365) | |
Operating lease assets | 135,881 | 121,363 | |
Other assets | 1,769 | 3,455 | |
Accounts payable | 7,802 | (10,783) | |
Accrued payroll and benefits | (4,438) | 7,597 | |
Accrued liabilities | 17,056 | (66) | |
Unearned revenue | (22,260) | (19,894) | |
Income tax payable/receivable | (18,565) | 146,177 | |
Operating lease liabilities | (101,348) | (100,794) | |
Other long-term liabilities | 2,020 | 5,521 | |
Net cash provided by operating activities | 1,131,812 | 1,037,546 | |
Investing activities | |||
Purchases of leasehold improvements, property and equipment | (273,193) | (257,601) | |
Purchases of investments | (738,434) | (590,656) | |
Maturities of investments | 374,373 | 220,565 | |
Net cash used in investing activities | (637,254) | (627,692) | |
Financing activities | |||
Acquisition of treasury stock | (172,368) | (221,754) | |
Tax withholding on stock-based compensation awards | (73,011) | (67,474) | |
Other financing activities | (29) | 115 | |
Net cash used in financing activities | (245,408) | (289,113) | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1,121) | 265 | |
Net change in cash, cash equivalents, and restricted cash | 248,029 | 121,006 | |
Cash, cash equivalents, and restricted cash at beginning of period | 586,163 | 408,966 | |
Cash, cash equivalents, and restricted cash at end of period | $ 834,192 | $ 529,972 | |
Supplemental disclosures of cash flow information | |||
Income taxes paid | $ 277,427 | $ 33,252 | |
Purchases of leasehold improvements, property and equipment accrued in accounts payable and accrued liabilities | $ 76,304 | $ 55,904 | |
Acquisition of treasury stock accrued in accounts payable and accrued liabilities | $ 9,803 | $ 2,406 | |
CHIPOTLE MEXICAN GRILL, INC. SUPPLEMENTAL FINANCIAL AND OTHER DATA (dollars in thousands) (unaudited) | ||||||||||
For the three months ended | ||||||||||
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | ||||||
Company-operated restaurants opened | 52 | 47 | 121 | 62 | 47 | |||||
Chipotle permanent closures | (1) | (3) | (2) | (1) | - | |||||
Chipotle relocations | - | (2) | (3) | (2) | (3) | |||||
Non-Chipotle permanent closures | - | - | - | (6) | - | |||||
Company-operated restaurants at end of period | 3,530 | 3,479 | 3,437 | 3,321 | 3,268 | |||||
Average restaurant sales | $ 3,146 | $ 3,082 | $ 3,018 | $ 2,972 | $ 2,941 | |||||
Comparable restaurant sales increase | 11.1 % | 7.0 % | 8.4 % | 5.0 % | 7.4 % | |||||
For the three months ended | ||||||||||
Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | ||||||
Licensed restaurants opened | 1 | - | - | - | - | |||||
Licensed restaurants at end of period | 1 | - | - | - | - | |||||
CHIPOTLE MEXICAN GRILL, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Below are definitions of the non-GAAP financial measures in this release. The following tables provide a reconciliation of non-GAAP financial measures presented in this release to the most directly comparable financial measures calculated and presented in accordance with GAAP.
Adjusted net income is net income excluding expenses related to restaurant and corporate asset impairment, corporate restructuring, certain legal proceedings, and loss on investments. Adjusted general and administrative expense is general and administrative expense excluding expenses related to corporate restructuring and certain legal proceedings. The adjusted effective income tax rate is the effective income tax rate adjusted to reflect the after tax impact of non-GAAP adjustments. Restaurant Level Operating Margin is equal to the revenues generated by our restaurants less their direct operating costs which consist of food, beverage and packaging, labor, occupancy and other operating costs. This performance measure primarily includes the costs that restaurant level managers can directly control and excludes other costs that are essential to conduct our business. Management uses restaurant level operating margin as a measure of restaurant performance. Management believes restaurant level operating margin is useful to investors in that it highlights trends in our core business that may not otherwise be apparent to investors when relying solely on GAAP financial measures. 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, adjusted general and administrative expenses, adjusted effective income tax rate and restaurant level operating margin 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.
CHIPOTLE MEXICAN GRILL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | |||
Adjusted Net Income and Adjusted Diluted Earnings per Share (in thousands, except per share amounts) (unaudited) | |||
Three months ended June 30, | |||
2024 | 2023 | ||
Net income | $ 455,671 | $ 341,790 | |
Non-GAAP adjustments: | |||
Impairment and exit costs: | |||
Restaurant asset impairment and other restaurant exit costs(1) | - | 4,765 | |
Corporate asset impairment(2) | - | 3,735 | |
Corporate Restructuring: | |||
Employee related and other restructuring costs(3) | - | 3,495 | |
Legal proceedings(4) | 3,775 | - | |
Investment(5) | 6,016 | - | |
Total non-GAAP adjustments | 9,791 | 11,995 | |
Tax effect of non-GAAP adjustments above(6) | (2,471) | (2,891) | |
After tax impact of non-GAAP adjustments | 7,320 | 9,104 | |
Adjusted net income | $ 462,991 | $ 350,894 | |
Diluted weighted-average number of common shares outstanding | 1,381,518 | 1,387,372 | |
Diluted earnings per share | $ 0.33 | $ 0.25 | |
Adjusted diluted earnings per share | $ 0.34 | $ 0.25 | |
(1) | Operating lease asset and leasehold improvements, property, plant and equipment impairment charges and other expenses for restaurants due to closures, relocations, or underperformance. |
(2) | Operating lease asset and leasehold improvements, property, plant and equipment impairment charges and other expenses for offices or other corporate assets. |
(3) | Charges for employee severance, stock modifications and third-party vendors related to the May 2023 optimization of our organizational structure. |
(4) | Charges for estimated settlements for distinct legal matters that exceeded or are expected to exceed typical costs for these types of legal proceedings. |
(5) | Charges for an unrealized loss in a long-term investment. |
(6) | Adjustments relate to the tax effect of non-GAAP adjustments, which were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates. |
CHIPOTLE MEXICAN GRILL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | |||
Adjusted General and Administrative Expenses (in thousands) (unaudited) | |||
Three months ended June 30, | |||
2024 | 2023 | ||
General and administrative expenses | $ 175,028 | $ 156,496 | |
Non-GAAP adjustments: | |||
Restructuring expense(1) | - | (3,495) | |
Legal proceedings(2) | (3,775) | - | |
Total non-GAAP adjustments | (3,775) | (3,495) | |
Adjusted general and administrative expenses | $ 171,253 | $ 153,001 | |
(1) | For three months ended June 30, 2023, costs for employee severance, stock modifications and third party related to the May 2023 optimization of our organizational structure. |
(2) | Charges for estimated settlements for distinct legal matters that exceeded or are expected to exceed typical costs for these types of legal proceedings. |
CHIPOTLE MEXICAN GRILL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | |||
Adjusted Effective Income Tax Rate (unaudited) | |||
Three months ended June 30, | |||
2024 | 2023 | ||
Effective income tax rate | 25.0 % | 23.8 % | |
Tax impact of non-GAAP adjustments(1) | - | - | |
Adjusted effective income tax rate | 25.0 % | 23.8 % | |
(1) | Adjustments relate to the tax effect of non-GAAP adjustments, which were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates. |
CHIPOTLE MEXICAN GRILL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | |||||||
Restaurant Level Operating Margin (in thousands) (unaudited) | |||||||
Three months ended June 30, | |||||||
2024 | Percent of | 2023 | Percent of | ||||
Income from operations | $ 586,053 | 19.7 % | $ 431,810 | 17.2 % | |||
Non-GAAP Adjustments | |||||||
General and administrative expenses | 175,028 | 5.9 | 156,496 | 6.2 | |||
Depreciation and amortization | 83,562 | 2.8 | 78,771 | 3.1 | |||
Pre-opening costs | 8,995 | 0.3 | 7,538 | 0.3 | |||
Impairment, closure costs, and asset disposals | 5,762 | 0.2 | 16,240 | 0.6 | |||
Total non-GAAP Adjustments | $ 273,347 | 9.2 % | $ 259,045 | 10.3 % | |||
Restaurant level operating margin | $ 859,400 | 28.9 % | $ 690,855 | 27.5 % | |||
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SOURCE Chipotle Mexican Grill
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