Chipotle Mexican Grill's (CMG) Q1 2022 Earnings Call Transcript

For the period ending March 31, 2022

April 26, 2022 4:30 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Chipotle Mexican Grill First Quarter 2022 Results Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded.

I would now like to turn the conference over to Adam Rymer, VP of Finance. Please go ahead.

Adam Rymer – VP-Finance

Hello, everyone, and welcome to our first quarter fiscal 2022 earnings call. By now, you should have access to our earnings press release. If not, it may be found on our Investor Relations website at ir.chipotle.com. I will begin by reminding you that certain statements and projections made in this presentation about our future business and financial results constitute forward-looking statements. These statements are based on management's current business and market expectations, and our actual results could differ materially from those projected in the forward-looking statements. Please see the risk factors contained in our annual report on Form 10-K and our Form 10-Qs for a discussion of risks that may cause our actual results to vary from the forward-looking statements.

Our discussion today will include non-GAAP financial measures. A reconciliation to GAAP measures can be found via the link included on the presentation page within the Investor Relations section of our website. We will start today's call with prepared remarks from Brian Niccol, Chairman and Chief Executive Officer; and Jack Hartung, Chief Financial Officer, after which we will take your questions. Our entire executive leadership team is available during the Q&A session.

And with that, I will turn the call over to Brian.

Brian Niccol – Chairman and CEO

Thanks, Adam, and good afternoon, everyone. Before I share our first quarter results, I want to express my gratitude for the 3,200 outstanding general managers and field leaders that attended our All Managers Conference in Las Vegas last month. It was our first time together in nearly four years, allowing us to celebrate our general managers as well as inspire and learn from one another as we codified our 2022 strategic priorities. It truly was great to be back together again.

Chipotle's performance in the first quarter was strong despite challenges from the Omicron variant. For the quarter, sales grew 16% to reach $2 billion driven by a 9% comp, in-store sales grew by 33% over last year, digital represented 42% of sales, restaurant level margin was 20.7%, a decrease of 160 basis points year-over-year, adjusted diluted EPS was $5.70, representing 6.3% growth over last year and we opened 51 new restaurants, including 42 Chipotles. Although our restaurant margins remain bumpy due to inflation, we have the ability to be patient while costs are volatile, and the growth in pricing power to recover our margins over time. And I'm pleased to report that Q2 is also off to a strong start, fueled by Pollo Asado our most popular new protein to date.