Transcript: 100 shares x 527.50 = $52,750 price-earning ratio- $53.43 Capital Gain! Traded in NYSE Chipotle Mexican Grill, Inc. CMG pening IPO- $45.00 on Jan. 26, 2006 100 shares x $45.00 = $4500 Highs and lows Historical Prices Capital gain of $48,250 Chipotle took a hit during the recession however they came back to do much better Steve Ells Develops and operates fast casual and fresh Mexican food restaurants. As of October 15, 2013, the company operated approximately 1,500 restaurants. Products Burrito Burrito Bowl Crispy Tacos Soft Tacos Salad Chips & Guacamole/Salsa Kids Menu taco kit of 2 soft or crispy taco shells with choice of 3 ingredients Target Audience Millennials (born between 1980 and 2000) Founder, Co-CEO, & Chairman 48 years old $1.18 million Salary Education: University of Colorado at Boulder, Culinary Institute of America He borrowed money from family and friends to open the first Chipotle and "didn't want Chipotle's success to be tied to the exploitation of animals, farmers, or the environment, but the engagement of the customers." current share price is $527.50 52 week range is $250.09 - $528.00 Scarecrow Ad General Information Chipotle Mexican Grill, Inc. By Tyler Wyman Jacob Wilhelm Buy or Sell? Was founded in 1993 and is based in Denver, Colorado. Address: 1401 Wynkoop St. Ste. 500 Denver CO 802021401 Industry- Restaurants Sector- Services Index Membership- N/A Competition - Qdoba Restaurant Cooperation - Panda Restaurant Group, Inc Released September 11, 2013 Obviously an important ad, as Chipotle generally never releases ads. The video implies that Chipotle is a different kind of restaurant, one that cares about sustainability, animals, and what we eat. Revenue Increased by $10,121 by the the time the video was released, making the total revenue of September$826,907 Business Summary $52,750-$4500 = $48,250 Sell Stock is too expensive to buy Prices are at their peak people are struggling with having enough money to live on. This means restaurants may start to feel that pain also.
Transcript: Chipotle When I eat this?? I eat this when we go places. My family loves tihs place we eat it all the time. VERY GOOOD Ingreditnts Beans Peppers Tortoilas Beef Steak Chicken Lettuce Tomatoes Onions ANything Really Nutrition It doesnt really have any nutrition value just depends on what u get on it VERY TASTEY Chipotle is the best food ever
Transcript: Background and Founding Chipotle was founded in 1993 in Denver, CO by Steve Ells, a chef who noticed increasing popularity of "taquerias". Ells started the business with a loan from his father, and calculated that the store needed to sell 107 burritos per day to be profitable. After the first month, the store sold 1,000 burritos per day. The second store was opened with another investment from Ells's father and the third with a Business Plan and a board of directors. In 1998, McDonalds made a minority investment in Chipotle, but withdrew in 2006 having made approx. $1.1 Billion. Rising commodity costs (Rise in beef/chicken/cheese prices) Raising the prices Loss in sales Hedge fund manager David Einhorn, of Greenlight Capital, voiced criticism of Chipotle’s growth and the valuation awarded by investors. Yum! Brands‘ Taco Bell to pull customers away from Chipotle with the Cantina Bell concept that offers higher-quality food than the typical Taco Bell menu but charges less than Chipotle CSR/Enrivonmental - CSR Hub Rating= 49 (out of 60) -Chipotle works close with farmers and ranchers to ensure that the products are environmentally sustainable and ethical -First Platinum LEED certified restaurant -Claim to make every action have as small of an impact on the environment as possible -They have two restaurants in Gurnee, Il and Minnetonka, MN that are registered with the US Green Building Council Suzan Idil Demirdag Stock Symbol: CMG Traded on NYSE High Yesterday: 409.74 Low Yesterday: 405.27 Current Price: 407.38 Volume: 257.2K 52-Week High (07/19/13)410.12 52-Week Low (10/23/12)233.82 1 Yr % Change: 39.93 Market Cap: 12.6B Shares Outstanding: 30.9M Price/Earnings: 42.9x Earnings per Share: 9.49 Dividend + Yield-- (0.00%) + Company Presentation Stock Profile Jessica Lis Work Cited Rachel Abolafia Controversy Juhi Vazirani -Chipotle's use of GMO is highly controversial http://data.cnbc.com/quotes/CMG%2C%20 http://ir.chipotle.com/phoenix.zhtml?c=194775&p=irol-irhome http://www.chipotle.com/en-US/Default.aspx?type=default http://www.csrhub.com/CSR_and_sustainability_information/Chipotle-Mexican-Grill-Inc/ http://nrn.com/same-store-sales/chipotle-stock-rises-upgraded-outlook?page=1 http://www.forbes.com/sites/abrambrown/2012/10/18/fire-in-chipotles-kitchen-wont-go-out-stock-slammed-over-slowed-growth/
Transcript: Christoffer Modén Ashley Lyons Gable Sprague Kelsey Springer Opened in 1993 in Colorado Expanded in Colorado in 1995 & 1996 Brings in outside investors in 1998 1999 expands outside Colorado Started serving naturally raised meat in 2000 pork(2000), chicken(2002), beef(2007) Zero trans fat oil 2004 Natural cheese(2007) & natural beans(2008) Core Competencies Marketing Mix TV Ads Food with integrity Gold ingredients Chipotle's Mirco Market in Lubbock International Expansion & New Ventures Franchising Chips/Salsa/Soda companys National maintenence suppliers Local farmer program Steadily increased over time but quality matches Recommendations Competitors Flexibility First TV ad was grammys 2012 – support sustainible food practices and was combined with willie nelson singing “The Scientist” Rewards for frequent buyers Product How it all started Over 1500 locations worldwide Each location unique Differentiation Threats "It's not just a burrito. It's a foil-wrapped, hand-crafted, local farm supporting, food culture changing cylinder of deliciousness" Exponential growth Prices Advertising Media outlets like TV & billboard Free food giveaways and event sponsorship Customization Partnership Opportunities Fresh ingredients "food with integrity" Consistency Assembly line process "the subway of mexican food" Place Innovation Core Competencies Technology option for order submitting Primary- Sazon, Freebirds, and Taco Bell, Secondary- Fuzzy's, Chimy's, Ruby Tequilas, Taco Villa, Josie's Mexican Restaurant, and Burrito King Promotion
Transcript: Monoculture is the process of planting a single species or crop on land acreage, usually for the purpose of large-scale production and marketing. Monocultures go against the natural diversity found in an ecosystem, deplete the soil, make crops more susceptible to pests and diseases, and require harmful fertilizers and chemicals, some of which may be harmful. Industrial ranching and factory farming produce tons of waste while depleting the soil of nutrients. These seem like bad things to Chipotle. So they work hard to source their ingredients in ways that protect this little planet of ours. IT'S ALL FUN AND GAMES UNTIL SOMEONE WRECKS A PLANET ENVIRONMENT FACT Currently, 40% of Chipotle's beans are organically grown, which has a number of benefits including a reduction of more than 140,000 pounds of chemical pesticide since 2005. They have been increasing their use of organically grown beans over the last few years and may use even more in the coming years. FARMING FACT ORGANIC IS BETTER By producing greenhouse gases responsible for global warning, air pollution from factory farms directly affects the environment. Hydrogen sulfide, methane, ammonia and carbon dioxide are some of the major hazardous gases produced by the decomposing waste collected on livestock factory farms. ENVIRONMENT FACT Dairy and pasturized cows raised in industrial factory farms throughout the US produce more than two billion pounds of manure a year. This manure is then stored in waste lagoons which results in polluting the environment. ENVIRONMENT FACT SOURCES: http://www.chipotle.com http://www.sustainabletable.org This method of farming uses techniques such as crop rotation, soil conservation, natural fertilization and polyculture planting. In livestock production, they use pasture-based systems, feed animals what their bodies are designed to digest, and treat their animals humanely. Sustainable farms produce foods that are tastier and more nutritious than foods produced on factory farms, while also preserving the long-term health of our environment.
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Transcript: and saw mistreated animals understanding that a man espetaba to nature and he did not like his work and killing animals, used as clothing and experiments. show the evolution of anan and how mconsiderate is toniards all nature chipotle and man and he received his due understanding that a straw birds working in a dairy factory promotes animal care , and healthy natural process of foods
Transcript: Opportunities Restore Shareholder Trust Suppliers Growth We will also give recommendations for Chipotle to use to increase their competitive advantage Fast-Casual Sector Mexican fast-casual restaurant-11.8% growth in sales New found success in providing organic food In 2011, increased sales by 8.4% Demand for healthier food Extremely high inventory turnover rate Food made in-house Locally sourced ingredients Corporate Governance Hiring Practices Litigation Suppliers John Hartung ROI 38.27% quick ratio 3.18 P/E 28.25 net profit margin 9.47 industry’s average of 4.25 Stock price has fallen 43% from $416.74 to $237.5 Earnings will grow by 21% this year highest ROI, net profit margins, quick & current ratios Chipotle’s inventory turnover is roughly quadruple that of the industry average Supplier Needs Rising Food Costs Weaknesses Whitney Glandt, Kelsey Kohler, Christine Victor, Steven Sheehan, Paul Villard & Skylar Colclazier Employee Incentive Program Ambiance Culture of Top Performers Chipotle Corporation Below-average wages and harsh working conditions Chipotle resisted joining the CIW for 6 years CIW protested against Chipotle since 2006 at multiple stores Chipotle finally signed an agreement with CIW Chipotle is now paying a penny more per pound of tomato harvested. Chipotle made a wise decision to sign with the CIW to avoid bad press, advertising for their company Grow through operations financing-benefits of growing without the risk Chipotle is a combination of rapid expansion and providing quality ingredients in the fast-casual restaurant sector Broadening Industry-fast fine Service Performance input food costs up 4-7% per year wheat-20.6% soybean oil-16% corn-28.1% beef-21% rice-13.7% Overall-32.2% industry increase Chipotle-rising prices to offset costs Mark Crumpacker, CMO Ability to adapt to growth? Micromanagement Sales down as result of price offsetting Failure to realize lack of suppliers Threats Alcohol Mark Crumpacker Top Management Food costs-owning farms, exclusive contracts Hiring Practices 21% market share held by mexican/burrito fast casual Chipotle Mexican Grill Inc Benefits Program Recommend Board and Top Management be split to: Increasing due to: High employee turnover rates Implementation of recruiting and Training programs for employees Increases in minimum wage Increased immigration regulations related legal costs Chipotle is a Mexican-style fast casual restaurant that specializes in burritos by serving quality food in a sit down environment Recommendations Tomato Policies Financials Finances Healthy Appeal Human Resources Marketing Tomato Policies SWOT SUMMARY: Lack of Suppliers Marketing We will discuss Chipotle as a whole and their SWOT as a company Shareholder lawsuits 2012- lawsuit filed in the United States District Court for the District of Colorado Lack of pricing power Low product demand Increased competition not meeting 2012 financial projections Decreased overall growth Involvement in Corporate Governance Intense Competition Differentiate by product quality Steve Ells Employee Training Program Montgomery F. Moran Litigation Growth Recommend Board provide increased consideration of top management's questionable decisions Balance Rising Food Costs Intense Competition Labor Costs and Policies Over the last 5 years: 25% CAGR increase in cash flow Profit increased 20% Cash account increased 78% liabilities up 19% highest net income, EBITDA, market capitalization capital developments expenditure of 170 million 2012 retain liquidity, limit leverage Repurchasing $106.6 common stock Current Situation I will not hire workers illegally I will include increasing supply needs into the growth plans I will consider raising prices that would offset sales Healthy Appeal Human Resources Bob Blessing Labor Costs and Policies Strengths Create Positive Public Perception
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