How Chipotle Makes Money

Chipotle's more than 2,900 U.S. stores and soaring digital sales drive revenue

By
Nathan Reiff
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Nathan Reiff has been writing expert articles and news about financial topics such as investing and trading, cryptocurrency, ETFs, and alternative investments on Investopedia since 2016.
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Updated January 30, 2023
Reviewed by
Robert C. Kelly
Robert C. Kelly
Reviewed by Robert C. Kelly
Full Bio
Robert Kelly is managing director of XTS Energy LLC, and has more than three decades of experience as a business executive. He is a professor of economics and has raised more than $4.5 billion in investment capital.
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Chipotle Mexican Grill Inc. (CMG) operates a major restaurant chain serving fast-casual Mexican food, including burritos, tacos, bowls, and similar dishes. The company operated 2,918 domestic locations and 44 international locations as of Dec. 31, 2021. Chipotle's primary competitors include both fast food chains such as Taco Bell and other brands affiliated with Yum! Brands Inc. (YUM), as well as fast-casual restaurants such as Qdoba Mexican Eats and other restaurants in close proximity to Chipotle locations.

Key Takeaways

  • Chipotle Mexican Grill operates a chain of more than 2,900 fast-casual Mexican restaurants.
  • The chain's stores are located primarily in the U.S., with a small number of international locations, including a stake in an entity operating four pizza restaurants.
  • Digital sales grew 24.7% and accounted for 45.6% of total revenue in FY 2021.
  • Chipotle announced the launch of Pollo Asado in the U.S. and Canada for a limited time.

Chipotle's Financials

Chipotle reported in early February financial results for Q4 of its 2021 fiscal year (FY), the three-month period ended Dec. 31, 2021. The company reported net income of $133.5 million, down 30.1% compared to the year-ago quarter. Revenue grew 22.0% year over year (YOY) to $2.0 billion.

For full-year FY 2021, Chipotle reported net income of $653.0 million, up 83.5% compared to the year-ago quarter. Total revenue rose 26.1% YOY to $7.5 billion. Food and beverages accounted for 99% of total revenue for the year. Delivery service revenue accounted for the remaining 1%.

Chipotle's Business Segments

Chipotle operates as a single segment and divides its operations across eight regions. Chipotle does not report individual financial figures for its eight regions. But the company has been extending its reach through several measures.

Chipotle's digital sales through delivery and customer pickup have surged in recent years. Advertising campaigns, new delivery partnerships with Uber, and other measures have helped increase awareness about the company's digital offerings. Digital sales accelerated during the pandemic. However, as the economy reopens, in store transactions have picked up.

Chipotle also is expanding its store footprint in the U.S. and abroad. The company added 215 new restaurants in FY 2021. Of these newly-opened restaurants, 174 included a drive-through format that the company calls "Chipotlane". Ten locations were permanently closed. For Chipotle's already-established restaurants, comparable restaurant sales rose 19.3% in FY 2021 compared to the previous year.

Chipotle's Recent Developments

On March 10, 2022, Chipotle announced the launch of Pollo Asado at restaurants in the U.S. and Canada for a limited time. It marks the company's first chicken menu innovation in its 29-year history.

How Chipotle Reports Diversity and Inclusiveness

As part of our effort to improve the awareness of the importance of diversity in companies, we offer investors a glimpse into the transparency of Chipotle and its commitment to diversity, inclusiveness, and social responsibility. We examined the data Chipotle releases.

In Chipotle's Feb. 2023 10-K release for the year ended Dec. 31, 2022, the company cites U.S. diversity statistics that breaks down their workforce by race and gender, stating that as of that date, "approximately 50% of our U.S.-based employee population was female and approximately 70% of our U.S.-based employee population was comprised of racial and ethnic minorities."

Article Sources
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  1. Chipotle Mexican Grill Inc. "Form 10-K for the fiscal year ended December 31, 2021," Page 3.

  2. Chipotle Mexican Grill Inc. "Form 8-K dated Feb. 8, 2022," Page 9 of PDF.

  3. Chipotle Mexican Grill Inc. "Form 8-K dated Feb. 8, 2022," Page 10 of PDF.

  4. Chipotle Mexican Grill Inc. "Form 10-K for the fiscal year ended December 31, 2021," Page 21.

  5. Chipotle Mexican Grill Inc. "Form 10-K for the fiscal year ended December 31, 2021," Page 22.

  6. Chipotle Mexican Grill Inc. "CHIPOTLE LAUNCHES POLLO ASADO IN THE U.S. AND CANADA."

  7. Chipotle Investor Relations. "Form 10-K for the Year Ended Dec. 31, 2022." Page 5.

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