Restaurant company Chipotle Mexican Grill Inc. (CMG) serves fast-casual Mexican fare such as burritos, tacos, bowls, and more. Dec. 31, 2021, the company had 2,918 domestic and 44 international locations. 1 Both Taco Bell and other Yum! Brands Inc. (YUM) brands and fast-casual restaurants such as Qdoba Mexican Eats and other eateries close to Chipotle stores are Chipotle's key rivals.

Accounting at Chipotle

Chipotle's financial statistics for Q4 of the 2021 fiscal year (FY), which concluded Dec. 31, 2021, were released in early February. There was a 30.1 percent drop in profits to $133.5 million, compared to last year's period. 2 Chipotle's full-year FY 2021 net income was $653 million, an increase of 83.5 percent over the year-ago third. In the year-over-year period, revenue grew by 26.1 percent, reaching $7.5 billion.

Chipotle's divisions of the business

As a single segment, Chipotle serves customers in eight areas. Each of Chipotle's eight areas doesn't get its financial numbers. However, the corporation has taken several steps to expand its reach. Digital sales at Chipotle have increased significantly in recent years. The company's digital offerings have been more widely known through advertising campaigns, new delivery partnerships with Uber, and other strategies. During the epidemic, digital sales grew rapidly. However, the reopening of the economy has led to a rise in in-store sales. 4

What Chipotle Has Been Up To Recently

Chipotle announced the limited-time availability of Pollo Asado on March 10, 2022, at participating locations in the United States and Canada. The firm has introduced a chicken menu item for the first time in its 29-year history. 6

Chipotle's Report on Diversity and Inclusion

Investors may look into Chipotle's dedication to diversity, inclusion, and social responsibility as part of our endeavor to raise awareness of the value of diversity in organizations. We analyzed Chipotle's publicly available information. According to the report, Chipotle withholds all information regarding the gender, race, ethnicity, and national origin of its board members, executive team, and other key workers. It also demonstrates that Chipotle hides its diversity in terms of racial, gender, ability, veteran, and LGBTQ+ identities.

Margins

In the restaurant industry, margins may make a significant difference, as seen by the large profit margins and exceptional efficiency reported by well-established businesses. Analysts are keeping a close eye on Chipotle's margins, which have trailed behind its competitors. This company has a gross margin of 17.40 percent, an operating margin of 5.36 percent, and a net margin of 5.94 percent, which ranks it near the bottom of some of its biggest competitors.

The Metrics of Valuation

Senior management is constantly concerned about the management of capital and the integration of new capital projects. In the foreseeable future, margins and investment returns will be affected by new technology and restaurant expansions. Some of Chipotle's value measures show this. Compared to its competitors, Chipotle has a five-year annualized return on assets of 7.08 percent and a return on equity of 13.46 percent. 2 Prices for Chipotle have a price to profits ratio of 165.7, and prices have a price to sales ratio of 6.8.3.

Management at Chipotle

Chipotle's management staff is highly skilled and experienced in the food sector. Brian Niccol was named CEO in March of this year. Steve Ells, the company's creator, will step down as executive board chair in 2020 and be succeeded by him. There are several other top executives, such as Chris Brandt, Curt Garner, and John Hartung, as well as Laurie Schalow and Marissa Andrada. 5

What About The Food??

Chipotle is most known for its foil-wrapped burritos, but burrito bowls, which have the same ingredients as a burrito but without the tortilla, are the most popular item on the menu. Black beans outsell pinto beans as a protein source. However, chicken is the most popular choice. The mildest of the four salsas, pico de gallo, is the most popular. Many of the company's recent promotions and awards have been based around guacamole.

However, the menu's flexibility ensures that no single item accounts for most sales. Last year, the firm introduced chorizo as a fifth meat choice to its menu, but other than that, it hasn't made many adjustments.

The Bottom Line

In terms of revenue, Chipotle has outpaced the industry's growth. It provides an alternative to some of the more well-known restaurant names. As e-commerce sales rise across retail, Chipotle has made significant progress in deploying digital technology that allows consumers to purchase online and pick up at the shop. It has successfully implemented capital expenditures and has a good outlook on maintaining its high PE. There have been issues with food quality and poor margins, which will be aspects to keep an eye on as the company continues to grow.