Chipotle Cooking Brand Expansions on Hot Profits

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July 24 (Bloomberg) -- Jack Hartung, chief financial officer at Chipotle Mexican Grill, discusses second-quarter results that pushed the fast casual restaurant‘s shares to an all-time high and how they’re expanding their brand into other food offerings. He speaks on “In the Loop.”

As well.

Great to be here.

Jack, you guys had a phenomenal quarter.

Revenues up 29% from the year before.

Earnings for 24% from the year before.

Same-store sales jumped 17% from the year before.

This is the high water mark for the company or can you guys continue these kinds of numbers?

We are proud of more than just the numbers.

We were super proud of our team.

All the numbers you just talked about, all of that happened at the frontline in a restaurant.

Our managers and crews have been a great job and we are super proud.

In terms of what is ahead, no, we think we can get better.

We can do better in terms of -- we are constantly trying to find better ingredients.

We think we can do a better job of having better employees with better cultures so they can rise up to the future leaders of our company.

If you like our future is really bright and we don't think this is a peak for us.

I spent some time with your co-cfo and you guys don't really have a specific culture and you really cultivate -- you guys do really have a specific culture and you cultivate your workers.

Let me talk about the increase in numbers.

How much of that was a result of the increased you did in many prices?

-- menu prices?

Very small.

We did raise prices during the quarter but we only got a partial effect.

Most of that is from additional transactions.

If there are additional customers -- either additional customers or existing customers coming more often.

Many restaurants are looking for local, sustainable, non-gm out ingredients.

At the end of the day they are a lot more expensive, and with you expending so much, as another price hike on the rise for 2015? no, this price hike was the first one unit 3 years.

We have a history of sourcing high-quality ingredients and our food costs are either at or among the highest in the entire restaurant industry.

We tried to build our business model to find efficiencies so that we can find them and have a smaller restaurant and be efficient in the way we maintain the restaurant.

We are really efficient in the way we deploy our resources so we can invest more in food.

I'll everyone else is raising prices over the last 3 years, we are continuing to invest in food.

We have been investing in moving gm outs and that raising prices and that is something we want to source, high-quality food, remain accessible.

Only some people can enjoy aaa and we want everyone to come.

You guys are spending what you do beyond chipotle.

You are doing southeast asian food and are looking into a pizzeria.

You are building a second location and looking at a third.

Talk to me about the extension of the brand and how the growth is going nose areas.

-- growing in those areas.

Always felt that chipotle is in the special because of burritos and tacos, is special because of our approach to food and food culture, and especially because of the business model, which allows us to invest in food and people.

We are super excited about where we are so far.

The pizzeria, i had lunch there yesterday and it was absolutely delicious.

Our second restaurant is under construction and we think it will open later this quarter or early in the fourth quarter.

Customers love both of the restaurants -- the teams are great, the food is delicious.

We think it is a bright future . what part of that is to offset market penetration for chipotle?

Are you forced to go into other cuisines?

We are not near market penetration for chipotle.

We have about 1700 restaurants right now and we could have 4000. we thought we could have 4000 restaurants years ago when we went public.

The awareness and economics were not where it is today.

So likely that number is credited higher.

We don't call these growth strategies, because we don't need to the growth right now.

We are not enamored with growth for growth's sake.

We want to nurture these brands and allow customers to discover them and allow them to become special friends like cjo[hipotl.e we don't need growth in any way right now.

But you will take the growth.

We will take the growth.

Some companies put growth as their primary objective.

We want to change the culture and source quality ingredients and if we do all that well, the growth will be there and it will be easier for the growth to happen if we do all the nurturing of the brand along the way.

You guys have come under criticism, some of the senior executives, for executive compensation plans.

You guys do pay above minimum wage to a lot of your workers and restauranteurs.

Some would say this quarter justifies what the executives are being paid.

But you guys are reviewing that executive compensation package.

Any progress on that?

It is in the hands of our comp committee right now.

They are making progress.

They still have work to do.

Nothing to report yet, but our committee is working on

This text has been automatically generated. It may not be 100% accurate.


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