🌶 Chipotle: Is Digital The Secret Ingredient?

Facebook Vs Australia. Walmart increases minimum wage.


Hey Global Investor, here’s what you need to know before the US markets open.

Market Snapshot 📈

S&P 500 (Friday’s Close) 3,906.71−7.26 (0.19%)

NASDAQ (Friday’s Close) 13,874.46 +9.11 (0.066%)

FTSE 100 (5 PM IST) 6,581.70 −42.32 (0.64%)

NIFTY 50 (Today’s Close) 14,675.70 −306.05 (2.04%)

USDINR (5 PM IST) 72.42 (+0.9276%)


🔥 Top Movers

PLTR +15.22%
DMTK +15.18%
RIOT +14.99%

FIZZ -50.20%
RXT -16.15%
PDFS -13.82%


🌶 Chipotle: Is Digital The Secret Ingredient?

Chipotle (CMG) released upbeat results for 2020 in spite of the pandemic decimating restaurant business in general, courtesy of its digital presence.

Background: Founded in 1993 by previous CEO Steve Ells, Chipotle saw early success and rising demand due to prioritising highly quality ingredients. It drew attention from McDonald’s in 1998, leading to a minority investment which helped Chipotle expand from 16 outlets in 1998 to over 500 outlets by 2005.

McDonald’s divested its ownership of these stores and they became fully owned by Chipotle in 2006. The company went public the following year with shares listing at $22 and closing at $44. Since then, the shares have gained 3,300% as of yesterday.

Chipotle’s emergence as a winner through the pandemic only adds to its history of successfully navigating systemic shocks (2008 financial crisis & the 2015 E. coli outbreak). The company adapted spectacularly in light of the pandemic by embracing all things digital while dine-ins shut down.

What Happened?: Chipotle beat estimates with revenue at $6B, up 7% Y-o-Y, for FY 2020. The online sales skyrocketed 174.1% Y-o-Y to $2.8B, comprising 46% of Chipotle’s annual business. Q4 online sales rose 177.2%. EPS came in at $12.74, up ~1% Y-o-Y.

Some remarkable statistics on how Chipotle’s digital strategy has delivered during the pandemic:

  • Unit volumes were higher than 28% of the USA’s largest chain restaurants
  • Digital business stayed consistently above 40% in any region
  • The company’s digital rewards program has effectively doubled to 20M users in the last year.

Innovations such as ‘Chipotlanes,’ (that’s Chipotle-speak for digital drive-thrus), integration with Facebook’s (FB) Messenger for ordering, ‘Pepper’ the chatbot, as well as ‘Carside Pickup’ (food is delivered conveniently to customers who are parked anywhere near the outlet) – these have caught the imagination of people who were otherwise home-bound during the pandemic.

To the company’s credit, the digital transformation did not come at the cost of employee layoffs. Chipotle was one of the exceptions that added 161 stores in 2020 when everyone else was caught up in the mayhem. The company has cash reserves of $900M and heads into 2021 from a position of strength. It plans to increase spending on ingredients, open 200 more stores and bring the total store count to 3K, and increase advertising.

Chipotle has signaled its commitment to digital expansion. With the pandemic’s trajectory still uncertain with new strains emerging, this strategy has become a gift that keeps on giving.

Market Reaction: CMG closed at $1473.09, up 1.15%; the stock is down 2% in pre-market trading.

Company Snapshot 📈

CMG $1473.09 +16.78 (1.15%)

Analyst Rating (35 Ratings) Buy 54%   Hold 43%   Sell 03%


Newsworthy 📰

Unfriended: Australia won’t change planned content laws despite Facebook block (FB -2.91%)

Payday: Walmart to hike wages for 425,000 workers to average above $15 an hour (WMT +0.49%)

Bit by bit: Bitcoin hits $1 trillion in market value as cryptocurrency surge continues (RIOT 14.99%, MARA +5.59%)


Later Today 🕒

  • Before Market Open: Cooper Tire & Rubber Co. (CTB)
  • After Market Close: Air Lease Corporation Earnings  (AL)
  • After Market Close: RealReal Inc Earnings  (REAL)
  • After Market Close: Agora Inc Earnings (API)

Fun Fact of The Day 🌞

The Moon has moonquakes


Disclaimer: The content of this article has been created and published by Winvesta India Technologies Pvt. Ltd., in order to ease the reader’s understanding of the subject matter. The information and/or content (collectively “Information”) provided herein is general information sourced through various news reports and does not constitute a research report or a research analysis. The Information is not intended to offer advice, target or solicit any particular customer or group of customers to buy or sell securities. 

Winvesta does not render any research or advisory services and provides a more detailed description of its services on its website and mobile application along with the terms and conditions published therein from time to time. While reasonable care has been exercised to ensure that the Information is adequate and reliable, no representation is made by Winvesta as to its accuracy or completeness and Winvesta, its affiliates, subsidiaries and employees accept no liability of whatsoever nature for any direct or consequential loss, including without limitation any loss of profits, arising from reliance on this Information. Neither Winvesta nor any of its affiliates are acting as an investment adviser, research analyst or in any other fiduciary capacity. Accordingly, reader’s are expected to undertake their own due diligence in consultation with their own advisors and are advised not to solely rely on the Information. Any such reliance shall be at the reader’s own risk. 

All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. There is always the potential of losing money when you invest in securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing.


Start Building Your Global Portfolio Today

Download Winvesta App now to Get Started