In addition, Chipotle suffered an increase in many of its menu’s critical ingredients in overseas. This is likely to increase the costs and expenses as well as raise its investments for international operations. The operations could face competition from several restaurant players who specializes in local cultural food traditions. These hindrances are likely to fade away in the midst of restaurant expansion.
The company has been aggressive in financing its growth with debt. This potentially generates more earnings than without debt financing. The shareholders are expected to be beneficial by the increases in earnings. As of June 30, 2019, Chipotle had a cash and short-term investment balance of $717.8 million while the total debt stood at $2.7 billion.
For the second quarter, Chipotle Mexican Grill served better-than-expected results. The top line improved by 13.2% year-over-year, which was spurred by a 10% increase in comp sales as well as a menu price increase. Digital sales doubled and accounted for 18.2% of sales for the quarter.
As of June 30, 2019, Chipotle operated 2,482 Chipotle restaurants throughout the United States as well as 39 international Chipotle restaurants. The company opened 20 new restaurants and closed one Chipotle restaurant during the second quarter of 2019 and expects to open about 140 to 155 new restaurants.
The company expects comparable restaurant sales increases to be in the high single digits for the full year 2019. The company continues to invest in improving digital platforms and equipping select restaurants with an upgraded second make line dedicated to fulfilling out-of-restaurant orders.
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