Chipotle Mexican Grill: Financial Facts

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The company is a United States casual restaurant with about 85,0000 employees and enjoys a mass flow of loyal customers. Its menu includes burritos, tacos, quesadillas, bowls, and salads. The firm’s primary products are typically nutrition and food sourcing, with a focus on responsible sourcing, freshly cooked, and wholesome ingredients. The chain is famous for giving supplementary simple food deprived of artificial additives and a huge range of totally customizable lenient tacos, burritos, bowls, salads, chips, and queso (Chipotle, 2020).

In terms of marketing, Chipotle is a corporation that uses non-traditional advertising, considering marketing strategies that generate positive feedback from customers and word of mouth reputation. The company reportedly spends only 2% of its revenue on advertising and relies on a unique social media presence or public promotions to attract consumers. Chipotle has established itself as a “leader in culture” remaining a popular spot for youth to either hang out or order delivery as a representation of their millennial ‘healthy’ status (WARC, 2020).

The perfect target market for Chipotle is the younger millennial professionals and college students aged from 18 to 28 (Lock, 2020). As a result of their busy schedules, they require a healthy alternative to preparing a meal and have to eat out; hence they turn out to fast-casual restaurants such as Chipotle. The company promotes its products by satisfying customers with fair prices. Their customizable food is sold through two channels: assembly lines in the leading stores and their mobile application (Lock, 2020).

In terms of prices, Chipotle is known for having a fair price. In comparison to other fast-food restaurants, they have almost the same prices. A higher interest rate in the company is a result of increased financial leverage. The company reports the lowermost margins compared to other companies but can record the highest net income rate, which is why it has more potential compared to other companies (Walker & Merkley, 2017).

Chipotle Mexican Grill has a Debt to Equity of 2.033, according to the 2019 annual report. The ratio was determined by dividing total liabilities of $3.4 billion by total shareholders’ equity of $1.7 billion (Chipotle, 2019). The rate is 98.45% lower than that of the restaurant industry and the Consumer Cyclical sector (Lock, 2020). The Company’s Debt to Equity Ratio is projected to increase depending on the last several reporting years. Moreover, the company reports a leading net income growth, which implies that it can perform better, resulting in further potential benefits. Additionally, the income statements generally show an increase in the net income and the comprehensive income. The company’s financial statements are based on its fillings with U.S Securities and Exchange Commission.

In 2019, Chipotle’s annual revenue was $5.586 billion, which was a 14.8% growth from the previous year (Chipotle, 2019). The augmented revenue was a result of a significant upsurge in comparable sales of the restaurants. Moreover, the revenue rose due to new restaurant openings and loyalty referrals. Chipotle’s market share demand, aptitude to produce reliable repeat sales, and substantial brand equity contribute to its increased revenue. Furthermore, in the same year, the company earned a net income of approximately $ 350.16 million. The establishment has an annualized return on assets of about 13.01% and assets of 17.01 % for five years (Lock, 2020). While the business has been successful, its margins have lagged rivals and is a vital area of emphasis for an analyst in the industry. Chipotle is also a top stock performer, which makes it successful. I now acknowledge that the firm’s competent management team has significantly contributed to its financial success. The company has positioned itself strongly in the casual dining sector by delivering ‘food with integrity,’ an aspect it seeks to maintain through the management and brand repositioning (Assenza & Lewis, 2019).