chapter  11
17 Pages

Chipotle Mexican Grill, Inc.: “food with integrity”

WithRam Subramanian

On October 18, 2012, Steven Ells, the founder, chairman of the board, and co-chief executive officer (CEO) of the Denver, Colorado-based restaurant chain, Chipotle Mexican Grill (CMG), completed the conference call following the release of the company’s third quarter 2012 results. While the reported results were positive, analysts picked on the slowing down of same-stores sales (a key metric for restaurant chains), the competition from Yum Brands’ Taco Bell and their recent launch of the Cantina Bell menu and CMG’s announcement that food costs were expected to

CMG’s stock went down by nearly 12 per cent in intra-day trading to finally stabilize at a 4 per cent drop over the previous day’s price. At the end of trading on October 18, CMG’s stock price was at $285.93, a significant decline from a 52-week high of US$442.40.i CMG had been the darling of both Wall Street and its customer base ever since the company’s founding in 1993 and its 2006 initial public offering (IPO). Investors were attracted to CMG for its fast growth and sizeable profit margins, while customers responded favourably to its “Food with Integrity” mission of serving good quality food with inputs sourced using sustainable farming practices. Both Ells and his co-CEO, Montgomery F. Moran, had to respond to the challenges confronting the company.