Chipotle Announces First Quarter 2019 Results

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First quarter highlights, year over year:

  • Revenue increased 13.9% to $1.3 billion
  • Comparable restaurant sales increased 9.9%, net of 30 bps from loyalty deferral, and included 5.8% of comparable restaurant transaction growth and 2% in mix contribution
  • Digital sales grew 100.7% and accounted for 15.7% of sales for the quarter
  • Restaurant level operating margin was 21.0%, an increase from 19.5%
  • Diluted earnings per share was $3.13, net of a $0.27 after-tax impact from expenses related to restaurant asset impairment, corporate restructuring, and certain other costs, a 46.9% increase from $2.13. Adjusted diluted earnings per share excluding these charges was $3.40, a 59.6% increase from $2.13.1
  • Opened 15 new restaurants and closed 2

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.

“The on-going improvement in each of our key operating metrics over the past few quarters gives us confidence that our mission to win today and cultivate the future, is resonating,” said Brian Niccol, chief executive officer. “This is the fifth consecutive quarter of accelerating comps, which reinforces our view that when we connect with guests through culturally relevant marketing focused on Chipotle’s great taste and real ingredients, and provide more convenient access with less friction, they respond enthusiastically.”

Results for the three months ended March 31, 2019:

Revenue for the quarter was $1.3 billion, an increase of 13.9% from the first quarter of 2018. The increase in revenue was driven by a 9.9% increase in comparable restaurant sales and new restaurant openings. Comparable restaurant sales improved primarily as a result of a 5.8% increase in comparable restaurant transactions and included a 30 basis point negative impact as a result of deferred revenue from our Chipotle Rewards loyalty program.

We opened 15 new restaurants during the quarter and closed 2, bringing the total restaurant count to 2,504.

Food, beverage and packaging costs were 32.2% of revenue, a decrease of 20 basis points compared to the first quarter of 2018. The decrease was primarily due to the modest menu price increase at the end of 2018, partially offset by an increased demand for steak (a higher priced ingredient), and higher paper cost.

Restaurant level operating margin was 21.0% in the quarter, an improvement from 19.5% in the first quarter of 2018.  The improvement was driven primarily by comparable restaurant sales increases and lower repair and maintenance expense, partially offset by wage inflation, increased marketing and promotional cost, and delivery expense associated with increased delivery sales.

General and administrative expenses were 7.8% of revenue for the first quarter of 2019, an increase of 110 basis points over the first quarter of 2018. In dollar terms, general and administrative expenses increased compared to the first quarter of 2018 primarily due to $13.1 million in increased performance bonus expense including: non-cash stock-based compensation,  bonus expense, and associated taxes; $3.4 million in outside service expense related to company initiatives to support restaurant growth, including digitizing and modernizing our restaurant experience; $4.3 millionrelated to restructuring; and $1.3 million in other expenses.

The effective tax rate decreased to 22.2% in the first quarter of 2019, compared to 36.9% in the first quarter of 2018.  The decrease was primarily due to unfavorable discrete tax items in the first quarter of 2018 including equity vesting at an amount less than original book value and negative impacts from tax reform, and favorable discrete tax items in the first quarter of 2019 related to stock option exercises.

Net income for the first quarter of 2019 was $88.1 million, or $3.13 per diluted share, compared to net income of $59.4 million, or $2.13 per diluted share, in the first quarter of 2018. Excluding the impact of restaurant asset impairment, corporate restructuring, and certain other costs, adjusted net income was $95.5 million and adjusted diluted earnings per share was $3.40.


For 2019, management is anticipating the following:

  • Mid to high single digit comparable restaurant sales growth, up from the prior mid-single digit growth expectation
  • 140 to 155 new restaurant openings
  • An estimated underlying effective full year tax rate on the low end of the previously disclosed range of 27.0% and 30.0%, excluding the potential impact of excess tax deductions from equity vesting or exercises

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