CMG 10-Q

Chipotle Mexican Grill Inc (CMG)

10-Q 2021-10-27 For: 2021-09-30

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Added on April 08, 2026

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Delaware	84-1219301
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

610 Newport Center Drive, Suite 1400 Newport Beach, CA	92660
(Address of Principal Executive Offices)	(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	CMG	New York Stock Exchange


 Large accelerated filer	 Accelerated filer	 Non-accelerated filer	 Smaller reporting company	 Emerging growth company



	PART I
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income and Comprehensive Income	2
	Condensed Consolidated Statements of Shareholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Condensed Consolidated Financial Statements	5
	Note 1 - Basis of Presentation and Update to Accounting Policy	5
	Note 2 - Recently Issued Accounting Standards	5
	Note 3 - Revenue Recognition	5
	Note 4 - Fair Value of Financial Instruments	6
	Note 5 - Shareholders' Equity	8
	Note 6 - Stock-Based Compensation	8
	Note 7 - Income Taxes	9
	Note 8 - Leases	9
	Note 9 - Earnings Per Share	10
	Note 10 - Commitments and Contingencies	10
	Note 11 - Debt	11
	Note 12 - Related Party Transactions	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18
Item 4.	Controls and Procedures	18
	PART II
Item 1.	Legal Proceedings	18
Item 1A.	Risk Factors	19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 6.	Exhibits	20
	Signatures	21



	September 30,		December 31,
	2021		2020
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	721,109	$	607,987
Accounts receivable, net		76,099		104,500
Inventory		28,450		26,445
Prepaid expenses and other current assets		72,821		54,906
Income tax receivable		318,593		282,783
Investments		301,534		343,616
Total current assets		1,518,606		1,420,237
Leasehold improvements, property and equipment, net		1,719,224		1,584,311
Long-term investments		188,344		102,328
Restricted cash		27,891		27,849
Operating lease assets		3,094,045		2,767,185
Other assets		57,518		59,047
Goodwill		21,939		21,939
Total assets	$	6,627,567	$	5,982,896
Liabilities and shareholders' equity
Current liabilities:
Accounts payable	$	171,712	$	121,990
Accrued payroll and benefits		190,912		203,054
Accrued liabilities		153,233		164,649
Unearned revenue		120,423		127,750
Current operating lease liabilities		214,684		204,756
Total current liabilities		850,964		822,199
Commitments and contingencies (Note 10)
Long-term operating lease liabilities		3,274,875		2,952,296
Deferred income tax liabilities		148,395		149,422
Other liabilities		42,425		38,844
Total liabilities		4,316,659		3,962,761
Shareholders' equity:
Preferred stock, $0.01 par value, 600,000 shares authorized, no shares issued as of September 30, 2021 and December 31, 2020, respectively		-		-
Common stock, $0.01 par value, 230,000 shares authorized, 37,102 and 36,704 shares issued as of September 30, 2021 and December 31, 2020, respectively		371		367
Additional paid-in capital		1,690,806		1,549,909
Treasury stock, at cost, 8,947 and 8,703 common shares as of September 30, 2021 and December 31, 2020, respectively		(3,170,798)		(2,802,075)
Accumulated other comprehensive loss		(5,143)		(4,229)
Retained earnings		3,795,672		3,276,163
Total shareholders' equity		2,310,908		2,020,135
Total liabilities and shareholders' equity	$	6,627,567	$	5,982,896



	Three months ended				Nine months ended
	September 30,				September 30,
	2021		2020		2021		2020
Food and beverage revenue	$	1,932,409	$	1,581,335	$	5,517,764	$	4,333,640
Delivery service revenue		19,906		20,079		68,664		43,284
Total revenue		1,952,315		1,601,414		5,586,428		4,376,924
Restaurant operating costs (exclusive of depreciation and amortization shown separately below):
Food, beverage and packaging		591,332		517,261		1,688,481		1,434,316
Labor		502,757		405,818		1,400,932		1,184,649
Occupancy		104,223		97,694		309,422		288,549
Other operating costs		294,650		268,416		876,602		741,556
General and administrative expenses		145,930		133,150		447,077		342,267
Depreciation and amortization		63,191		60,180		188,395		178,578
Pre-opening costs		5,894		3,808		14,280		11,018
Impairment, closure costs, and asset disposals		4,658		7,991		14,592		22,713
Total operating expenses		1,712,635		1,494,318		4,939,781		4,203,646
Income from operations		239,680		107,096		646,647		173,278
Interest and other income (expense), net		(126)		(595)		(1,443)		2,771
Income before income taxes		239,554		106,501		645,204		176,049
Provision for income taxes		(35,120)		(26,257)		(125,695)		(11,242)
Net income	$	204,434	$	80,244	$	519,509	$	164,807
Earnings per share:
Basic	$	7.26	$	2.87	$	18.46	$	5.91
Diluted	$	7.18	$	2.82	$	18.22	$	5.81
Weighted-average common shares outstanding:
Basic		28,150		27,973		28,137		27,892
Diluted		28,475		28,454		28,520		28,370
Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustments	$	(956)	$	705	$	(914)	$	(81)
Comprehensive income	$	203,478	$	80,949	$	518,595	$	164,726


	Common Stock					Treasury Stock
	Shares	Amount		Additional ‎Paid-In ‎Capital		Shares	Amount		Retained ‎Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balance, December 31, 2019	36,323	$	363	$	1,465,697	8,568	$	(2,699,119)	$	2,921,448	$	(5,363)	$	1,683,026
Adoption of ASU No. 2016-13, Financial Instrument-Credit Losses (Topic 326)	-		-		-	-		-		(1,051)		-		(1,051)
Stock-based compensation	-		-		17,708	-		-		-		-		17,708
Stock plan transactions and other	194		2		(181)	-		-		-		-		(179)
Acquisition of treasury stock	-		-		-	134		(102,031)		-		-		(102,031)
Net income	-		-		-	-		-		76,388		-		76,388
Other comprehensive income (loss), net of income tax	-		-		-	-		-		-		(1,841)		(1,841)
Balance, March 31, 2020	36,517	$	365	$	1,483,224	8,702	$	(2,801,150)	$	2,996,785	$	(7,204)	$	1,672,020
Stock-based compensation	-		-		23,676	-		-		-		-		23,676
Stock plan transactions and other	150		2		(115)	-		-		-		-		(113)
Acquisition of treasury stock	-		-		-	1		(317)		-		-		(317)
Net income	-		-		-	-		-		8,175		-		8,175
Other comprehensive income (loss), net of income tax	-		-		-	-		-		-		1,055		1,055
Balance, June 30, 2020	36,667	$	367	$	1,506,785	8,703	$	(2,801,467)	$	3,004,960	$	(6,149)	$	1,704,496
Stock-based compensation	-		-		20,128	-		-		-		-		20,128
Stock plan transactions and other	15		-		42	-		-		-		-		42
Acquisition of treasury stock	-		-		-	-		(29)		-		-		(29)
Net income	-		-		-	-		-		80,244		-		80,244
Other comprehensive income (loss), net of income tax	-		-		-	-		-		-		705		705
Balance, September 30, 2020	36,682	$	367	$	1,526,955	8,703	$	(2,801,496)	$	3,085,204	$	(5,444)	$	1,805,586

Balance, December 31, 2020	36,704	$	367	$	1,549,909	8,703	$	(2,802,075)	$	3,276,163	$	(4,229)	$	2,020,135
Stock-based compensation	-		-		55,960	-		-		-		-		55,960
Stock plan transactions and other	232		2		632	-		-		-		-		634
Acquisition of treasury stock	-		-		-	74		(106,036)		-		-		(106,036)
Net income	-		-		-	-		-		127,101		-		127,101
Other comprehensive income (loss), net of income tax	-		-		-	-		-		-		(263)		(263)
Balance, March 31, 2021	36,936	$	369	$	1,606,501	8,777	$	(2,908,111)	$	3,403,264	$	(4,492)	$	2,097,531
Stock-based compensation	-		-		47,670	-		-		-		-		47,670
Stock plan transactions and other	52		1		24	-		-		-		-		25
Acquisition of treasury stock	-		-		-	113		(159,347)		-		-		(159,347)
Net income	-		-		-	-		-		187,974		-		187,974
Other comprehensive income (loss), net of income tax	-		-		-	-		-		-		305		305
Balance, June 30, 2021	36,988	$	370	$	1,654,195	8,890	$	(3,067,458)	$	3,591,238	$	(4,187)	$	2,174,158
Stock-based compensation	-		-		36,693	-		-		-		-		36,693
Stock plan transactions and other	114		1		(82)	-		-		-		-		(81)
Acquisition of treasury stock	-		-		-	57		(103,340)		-		-		(103,340)
Net income	-		-		-	-		-		204,434		-		204,434
Other comprehensive income (loss), net of income tax	-		-		-	-		-		-		(956)		(956)
Balance, September 30, 2021	37,102	$	371	$	1,690,806	8,947	$	(3,170,798)	$	3,795,672	$	(5,143)	$	2,310,908



		Carrying Value
		September 30,
	Level	2021		2020
Leasehold improvements, property and equipment, net	3	$	544	$	3,427
Operating lease assets	3		2,857		7,113
Total		$	3,401	$	10,540


		Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽¹⁾	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs⁽²⁾
July		14,005	$	1,585.11	14,005	$	186,298,386
	Purchased 7/1 through 7/31
August		19,030	$	1,890.74	19,030	$	150,317,665
	Purchased 8/1 through 8/31
September		21,416	$	1,892.33	21,416	$	209,791,611
	Purchased 9/1 through 9/30
Total		54,451	$	1,812.75	54,451



		Description of Exhibit Incorporated Herein by Reference
Exhibit Number	Exhibit Description	Form	File No.	Filing Date	Exhibit Number	Filed Herewith
31.1	Certification of Chief Executive Officer of Chipotle Mexican Grill, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	-	-	-	-	X
31.2	Certificate of Chief Financial Officer of Chipotle Mexican Grill, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	-	-	-	-	X
32.1	Certification of Chief Executive Officer and Chief Financial Officer of Chipotle Mexican Grill, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	-	-	-	-	X
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)	-	-	-	-	X
101.SCH	Inline XBRL Taxonomy Extension Schema Document	-	-	-	-	X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	-	-	-	-	X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	-	-	-	-	X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	-	-	-	-	X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	-	-	-	-	X
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)	-	-	-	-	X



CHIPOTLE MEXICAN GRILL, INC.
By:	/S/ JOHN R. HARTUNG
Name:	John R. Hartung
Title:	Chief Financial Officer (principal financial officer and duly authorized signatory for the registrant)



	Nine months ended
	September 30,
	2021		2020
Operating activities
Net income	$	519,509	$	164,807
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		188,395		178,578
Deferred income tax provision		(1,024)		53,857
Impairment, closure costs, and asset disposals		12,483		21,198
Provision for credit losses		733		(143)
Stock-based compensation expense		138,741		60,579
Other		2,534		2,450
Changes in operating assets and liabilities:
Accounts receivable		21,882		29,233
Inventory		(1,996)		614
Prepaid expenses and other current assets		(19,343)		(6,015)
Operating lease assets		151,628		136,052
Other assets		1,901		(21,754)
Accounts payable		28,712		5,776
Accrued payroll and benefits		(13,193)		68,514
Accrued liabilities		(7,407)		1,965
Unearned revenue		(2,978)		(593)
Income tax payable/receivable		(35,850)		(32,677)
Operating lease liabilities		(141,540)		(115,069)
Other long-term liabilities		474		1,351
Net cash provided by operating activities		843,661		548,723
Investing activities
Purchases of leasehold improvements, property and equipment		(320,569)		(246,758)
Purchases of investments		(288,899)		(325,069)
Maturities of investments		243,441		318,505
Proceeds from sale of equipment		2,885		-
Acquisitions of equity method investments		-		(10,025)
Net cash used in investing activities		(363,142)		(263,347)
Financing activities
Acquisition of treasury stock		(300,733)		(54,401)
Tax withholding on stock-based compensation awards		(63,492)		(47,976)
Other financing activities		(2,342)		(1,865)
Net cash used in financing activities		(366,567)		(104,242)


	Three months ended				Nine months ended
	September 30,				September 30,
	2021		2020		2021		2020
Chipotle Rewards liability, beginning balance	$	25,052	$	20,012	$	22,337	$	10,584
Revenue deferred		26,590		22,302		78,960		62,745
Revenue recognized		(17,388)		(19,416)		(67,043)		(50,431)
Chipotle Rewards liability, ending balance	$	34,254	$	22,898	$	34,254	$	22,898



	Three months ended		Nine months ended
	September 30,		September 30,
	2021	2020	2021	2020
Beginning of period	2,853	2,669	2,768	2,622
Chipotle openings	41	43	137	99
Pizzeria Locale openings	-	1	-	1
Chipotle permanent closures	-	(3)	(10)	(8)
Chipotle relocations	(2)	-	(3)	(4)
Total restaurants at end of period	2,892	2,710	2,892	2,710



	Three months ended					Nine months ended
	September 30,				Percentage	September 30,				Percentage
	2021		2020		change	2021		2020		change
	(dollars in millions)					(dollars in millions)
Food and beverage revenue	$	1,932.4	$	1,581.3	22.2%	$	5,517.8	$	4,333.6	27.3%
Delivery service revenue		19.9		20.1	(0.9%)		68.7		43.3	58.6%
Total revenue	$	1,952.3	$	1,601.4	21.9%	$	5,586.4	$	4,376.9	27.6%
Average restaurant sales ⁽¹⁾	$	2.5	$	2.2	12.3%	$	2.5	$	2.2	12.3%
Comparable restaurant sales increase		15.1%		8.3%			20.8%		0.5%

⁽¹⁾ Average restaurant sales refer to the average trailing 12-month food and beverage sales for restaurants in operation for at least 12 full calendar months.