Chipotle 1Q24: Revenues +14%, Comps +7%, Restaurant-Level Margin +1.9%

May 1, 2024 | Insights, Restaurant Research

Chipotle’s 1Q24 strength was driven by the continued success of its strong protein LTOs (such as its Chicken al Pastor & newly marketed Braised Beef Barbacoa) and operational improvements which have increased service speeds and in-store visitations.

Sales

  • 1Q24 revenues increased +14% y/y driven by a system comp increase of +7% (+5.4% transaction growth & +1.6% check increase).
  • Sales benefitted from its successful Chicken al Pastor LTO & higher side attachments (particularly extra meats & chips) in both digital & in-store channels.
  • Sales were also strengthened by its continued “Behind the Foil” marketing campaign which showcases employees preparing fresh food across many high-profile TV placements (including college football & the NFL playoffs).
  • Notably, 1Q24 in-store sales increased +19% y/y, driving the chain’s highest in-store mix in 4 years. Corporate reported that typical order-ahead customers are shifting to in-store ordering.
  • FY24 comp guidance was increased during the quarter to mid-to-high single digit growth & the brand anticipates its highest comps of the year during 2Q24.

Operations

  • A series of operational improvements along the makeline (called the 4 pillars) are driving substantial service speed improvements.
  • The brand produces 2 more entrees in its peak 15-minute period as compared to last year, with each month improving over the last. In Chipotle’s Boston’s Financial District store, the team now is able to serve 40+ entrees during their peak 15-minute period as opposed to just mid-20’s a year ago.

Margin

  • 1Q24 restaurant-level margin improved +1.9% to 27.5% of sales during the quarter, reflecting: a 40 bps COGs margin improvement reflecting the benefit of last year’s menu price increases; and labor & other operating cost margin improvements driven by sales leverage, lower delivery expenses & lower marketing costs.
  • While food inflation is expected to be in the mid-single digits for the remainder of the year, 2Q24 COGs are expected to increase to the mid-29% range due to higher avocado prices.
  • The brand’s labor margin is expected to remain flat q/q despite +6% wage inflation which is partially a function of California’s minimum wage hike.

Development

  • Plans to open 285 to 315 new restaurants in 2024 mostly in North America (80% of which will be Chipotlanes), reaching +10% annual unit growth by 2025.

Chipotle 1Q24 Financials

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