Chipotle Mexican Grill, Inc. Announces Third Quarter 2009 Results

Chipotle Mexican Grill, Inc. (NYSE: CMG and CMG.B) today reported financial results for its third quarter ended September 30, 2009.

Highlights for the third quarter of 2009 as compared to the third quarter of 2008 include:

• Revenue increased 13.8% to $387.6 million

• Comparable restaurant sales increased 2.7%

• Restaurant level operating margin was 25.5%, an increase of 410 basis points

• Net income was $34.5 million, an increase of 76.9%

• Diluted earnings per share was $1.08, an increase of 83.1%

Highlights for the nine months ended September 30, 2009 as compared to the prior year period include:

• Revenue increased 14.6% to $1.13 billion

• Comparable restaurant sales increased 2.2%

• Restaurant level operating margin was 25.1%, an increase of 340 basis points

• Net income was $95.2 million, an increase of 55.6%

• Diluted earnings per share was $2.96, an increase of 60.9%

'Our performance continues to be driven by our efficient business model, and our emphasis on doing just a few things, but always working hard to do them better. This approach to running our business enables us to continue to deliver impressive financial performance to our shareholders even in this challenging environment,' said Founder, Chairman, and Co-CEO, Steve Ells.

Third quarter 2009 results

Revenue for the third quarter of 2009 increased 13.8% to $387.6 million from $340.5 million in the third quarter of 2008. This growth in revenue was attributable to new restaurants not in the comparable base and a 2.7% increase in comparable restaurant sales in the third quarter. Comparable restaurant sales growth was due to the impact of menu price increases partially offset by a decline in customer visits. Chipotle opened 26 new restaurants during the third quarter of 2009 and operated 911 restaurants as of the end of the quarter.

Restaurant level operating margins increased to 25.5% in the third quarter of 2009 from 21.4% in the third quarter of 2008, primarily due to menu price increases and labor efficiencies, partially offset by the impact of lower transaction volumes and increased occupancy costs.

General and administrative expenses were $24.6 million in the third quarter of 2009, or 6.3% of revenue, compared to $22.6 million in the third quarter of 2008, or 6.6% of revenue. The decrease as a percentage of revenue resulted from menu price increases, thoughtful management of expenses and an all manager conference held during the third quarter of 2008, partially offset by higher performance based bonus accruals in 2009.

Net income for the third quarter of 2009 was $34.5 million, or $1.08 per diluted share, compared to $19.5 million, or $0.59 per diluted share in the third quarter of 2008.

Results for the nine months ended September 30, 2009

Revenue for the nine months ended September 30, 2009 increased 14.6% to $1,130.9 million from $986.6 million in the prior year period. This growth in revenue was attributable to new restaurants not in the comparable base and a 2.2% increase in comparable restaurant sales. Comparable restaurant sales growth was due to the impact of menu price increases partially offset by a decline in customer visits. Chipotle opened 76 new restaurants during the nine months ended September 30, 2009.

Restaurant level operating margins increased to 25.1% in the period, versus 21.7% in the nine months ended September 30, 2008 primarily due to menu price increases, labor efficiencies and a decrease in marketing and promotional spend, partially offset by the impact of lower transaction volumes and increased occupancy costs.

General and administrative expenses were $74.1 million for nine months ended September 30, 2009, or 6.5% of revenue, compared to $64.9 million, or 6.6% of revenue, for the prior year period. General and administrative expenses decreased as a percentage of revenue primarily due to the impact of menu price increases and thoughtful management of expenses, partially offset by higher performance-based bonus accruals and stock-based compensation expense for 2009.

Net income for the nine months ended September 30, 2009 was $95.2 million, or $2.96 per diluted share, compared to $61.2 million, or $1.84 per diluted share in the prior year period.

'What pleases me most about our results for the first nine months is that most of this success is the result of the hard work of our restaurant managers and crew, who by their increasingly efficient operation of our restaurants have allowed Chipotle to achieve some of the best margins in the restaurant industry, while creating exceptional restaurant experiences for our guests,' said Monty Moran, Co-CEO.

Outlook

For 2009, management expects the following:

• Full year comparable restaurant increases in the low single digits

• 120-130 new restaurant openings

• An effective tax rate of 38.1%

• Diluted weighted average common shares outstanding of approximately 32.2 million

For 2010, management expects the following:

• 120-130 new restaurant openings

• Flat comparable restaurant sales

• An effective tax rate of approximately 38.5%

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