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SEC Filings

S-1/A
CHIPOTLE MEXICAN GRILL INC filed this Form S-1/A on 12/23/2005
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company-operated stores opened in 2002, and $27.6 million resulted from sales by 74 company-operated stores opened in 2003. Average store sales for 2003 increased 20.6% to $1,274,000 from $1,056,000 for 2002, driven primarily by comp store sales growth of 24.4% that reflected increasing nationwide awareness of our brand, which also enabled new stores to open with higher average store sales. A substantial majority of the comp store sales growth was due to an increase in the number of transactions.

        Food, Beverage and Packaging Costs.    Food, beverage and packaging costs increased because we used more ingredients and packaging as a result of comp store sales increases, increasing sales at 55 company-operated stores opened in 2002 that were not in operation for 12 full months in the first six months of 2003 and sales at new stores opened in 2003. As a percentage of total revenue, food, beverage and packaging costs increased to 33.3% in 2003 from 33.1% in 2002. This increase was largely due to cost increases for avocados and beef in 2003.

        Labor Costs.    The year-to-year increase in labor costs was due to the growth in our store base, as our average number of hourly employees increased to about 5,100 in 2003 from about 3,000 in 2002. The effect was significant in 2003, when we opened a large number of stores and experienced the full-year impact of staff hired for stores opened throughout 2002. As a percentage of total revenue, labor costs decreased to 29.8% for 2003 from 32.5% for 2002 as a result of improved employee efficiency resulting from an increase in the number of transactions, which did not require a corresponding increase in staff, and more effective scheduling of employee shifts.

        Occupancy Costs.    The year-to-year increase in occupancy costs was primarily due to an increase in rental costs resulting from the opening of new stores in 2003 and the full-year impact in 2003 of such costs for stores opened throughout 2002. As a percentage of total revenue, occupancy costs decreased to 8.1% in 2003 from 9.1% in 2002, largely as a result of the effect of higher average store sales on a largely fixed-cost base.

        Other Operating Costs.    The year-to-year increase in other operating costs was primarily due to the opening of new stores in 2003 and the full-year impact in 2003 of stores opened throughout 2002. As a percentage of total revenue, these expenses decreased to 13.8% for 2003 from 14.6% for 2002, largely as a result of the effect of higher average store sales on a partially fixed-cost base.

        General and Administrative Expenses.    The increase in general and administrative expenses was mainly the result of hiring more employees as we grew and increased marketing expenses. As a percentage of total revenue, these expenses decreased to 10.8% in 2003 from 12.6% in 2002 as a result of our ability to further leverage our existing corporate infrastructure over more stores and the impact of higher average store sales.

        Depreciation and Amortization.    Depreciation and amortization increased primarily due to stores opened in 2003 and the full-year impact in 2003 of stores opened throughout 2002. As a percentage of total revenue, depreciation and amortization decreased to 4.8% in 2003 from 5.5% in 2002, largely as a result of the effect of higher average store sales.

        Pre-Opening Costs.    The increase in pre-opening costs was primarily a result of an increased number of store openings in 2003 compared to 2002, as well as an increase in average per-store opening costs in 2003 in order to promote brand awareness.

        Loss on Disposal of Assets.    A significant portion of the increase in loss on disposal of assets was attributable to having closed three stores in 2003 at a cost of $2.0 million compared to two stores in 2002 at a cost of $0.9 million.

        Net Interest Income.    The decrease in interest income (net of interest expense) was due to reduced earnings on average excess cash deposits in 2003 as compared to 2002.

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