Q4 2023 Chipotle Mexican Grill Inc Earnings Call

February 6, 2024

Yeah.

Operator: Good afternoon, and welcome to the Chipotle fourth quarter and fiscal year-end 2023 earnings call. All participants will be in listen only mode.

Speaker Change: Good afternoon, and welcome to the Chipotle fourth quarter and fiscal year end 2023 earnings call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing Star then zero on your telephone keypad. After today's presentation, there will be an opportune.

Operator: Should you need assistance, please signal a conference specialist by pressing star, then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad.

Speaker Change: T to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Cindy Olson head of Investor Relations and strategy. Please go with.

Operator: To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Cindy Olson, head of investor relations and strategy. Please go ahead.

Speaker Change: Head.

Cindy Olson: Hello everyone, and welcome to our fourth quarter and fiscal year-end 2023 earnings call. By now, you should have access to our earnings press release. If not, it may be found on our investor relations website at ir.chipotle.com.

Cindy Olson: Hello, everyone and welcome to our fourth quarter and fiscal year end 2023 earnings call by now you should have access to our earnings press release, if not it may be found on our Investor Relations website at IR Chipotle Dot com.

Cindy Olson: I will begin by reminding you that certain statements and projections made in this presentation about our future business and financial results constitute forward-looking statements. These statements are based on management's current business and market expectations, and our actual results could differ materially from those projected in the forward-looking statement. Please see the risk factors contained in our annual report on Form 10-K and in our Form 10-Qs for our discussion of risks that may cause our actual results to vary from these forward-looking statements. Our discussion today will include non-GAAP financial measures. A reconciliation to GAAP measures can be found via the link included on the presentation page within the investor relations section of our website.

Cindy Olson: I'll begin by reminding you that certain statements and projections made in this presentation about our future business and financial results constitute forward looking statements. These statements are based on management's current business and market expectations and our actual results could differ materially from those projected in the forward looking statements.

Cindy Olson: Please see the risk factors contained in our annual report on Form 10-K, and in our form 10, Qs for a discussion of Nebraska and may cause our actual results to vary from these forward looking statements. Our discussion today will include non-GAAP financial measures a reconciliation to GAAP measures can be found via the link included on the presentation page within the Investor Relations section of our website.

Cindy Olson: We will start today's call with prepared remarks from Brian Niccol, Chairman and Chief Executive Officer, and Jack Hartung, Chief Financial and Administrative Officer, after which we will take your questions. Our entire executive leadership team is available during the Q&A session. And with that, I will turn the call over to Brian. Thanks, Cindy. And good afternoon, everyone.

Cindy Olson: We will start today's call with prepared remarks from Brian Nichols, Chairman and Chief Executive Officer, and Jack Hartung, Chief financial and administrative officer, after which we will take your questions. Our entire executive leadership team is available during the Q&A session.

Brian R. Niccol: I will turn the call over to Brian.

Brian R. Niccol: Thanks, Cindy and good afternoon, everyone. We delivered outstanding results. This year driven by our focus on exceptional people exceptional food and exceptional throughput. This is driving a much better experience for our teams and our guests and resulted in accelerating transaction growth throughout 2023.

Brian R. Niccol: We delivered outstanding results this year, driven by our focus on exceptional people, exceptional food, and exceptional throughput. This is driving a much better experience for our teams and our guests and will result in accelerating transaction growth throughout 2020. For the year, sales grew 14% to reach $9.9 billion, driven by a 7.9% increase in digital sales. Restaurant level margin was 26.2%, an increase of 230 basis points year over year. Adjusted diluted EPS was $44.86, representing 37% growth over last year.

Brian R. Niccol: For the year sales grew 14% to reach $9.9 billion, driven by a seven 9% comp.

Brian R. Niccol: Digital sales represented 37% of sales restaurant level margin was 26, 2% an increase of 230 basis points year over year adjusted diluted EPS was $44 86, representing.

Brian R. Niccol: Representing 37% growth over last year, and we opened a record 271, new restaurants, including 238 Chipotle.

Brian R. Niccol: And we opened a record 271 new restaurants, including 238 Chipotle. We also ended the year with a lot of momentum, as demonstrated by our fourth quarter results. Our restaurant teams are making terrific progress in building a strong foundation around throughput, and the return of Carne Asada as a limited-time offer outperformed our expectations. For the quarter, sales grew 15% to $2.5 billion, driven by an 8.4% comp. Digital sales represented 36% of all sales.

Brian R. Niccol: We also ended the year with a lot of momentum as demonstrated by our fourth quarter results. Our restaurant teams are making terrific progress in building a strong foundation around throughput and the return of carnitas side as a limited time offer outperformed our expectations.

Brian R. Niccol: For the quarter sales grew 15% to two and a half billion dollars driven by an eight 4% comp digital sales represented 36% of sales restaurant level margin was 25, 4% an increase of 140 basis points year over year adjusted diluted EPS was $10 36.

Brian R. Niccol: Restaurant-level margin was 25.4%, an increase of 140 basis points year over year. Adjusted diluted EPS was $10.36, representing 25% growth over last year. And we opened a record 121 new restaurants, including 110 Chipotle. As a reminder, we are returning to our pre-pandemic practice of only providing annual comp guidance.

Brian R. Niccol: Representing 25% growth over last year, and we opened a record 121, new restaurants, including 100 tangible things.

Brian R. Niccol: As a reminder, we are returning to our pre pandemic practice of only providing annual comp guidance. While January was impacted by weather throughout much of the country as weather has normalized our sales trends have strengthened for the full year, we anticipate comps in the mid single digit range as we continue to focus on the same five key strategies that helped us to win today, while we.

Brian R. Niccol: While January was impacted by weather throughout much of the country, as weather has normalized, our sales trends have strengthened. For the full year, we anticipate comps in the mid-single-digit range as we continue to focus on the same five key strategies that help us to win today while we grow our future. Now, let me provide an update on each of these strategies, which include, number one, sustaining world-class leadership by developing and retaining diverse talent at every level. Number two, running successful restaurants with a people-accountable culture that provides great food with integrity while delivering an exceptional in-restaurant and digital experience.

Brian R. Niccol: Grow our future now let me provide an update on each of these strategies, which include number one sustaining world class people leadership by developing and retaining diverse talent at every level.

Brian R. Niccol: Number two running successful restaurants with a people accountable culture that provides great food with integrity, while delivering exceptional in restaurant and digital experiences.

Brian R. Niccol: Number three, making the brand visible, relevant, and loved to improve overall guest engagement. Number four, amplifying technology and innovation to drive growth and productivity in our restaurants, support centers, and in our supply chain. And number five, expanding access and convenience by accelerating new restaurant openings in North America and internationally. Starting with our world-class people, I'm excited to share that Aileen Eskenazi joined my executive leadership team in November as our Chief Human Resources Officer, with over 25 years of experience in leading human resources and legal functions across a wide range of industries.

Brian R. Niccol: Number three making the brand visible relevant and loved to improve overall guest engagement number for amplifying technology and innovation to drive growth and productivity of our restaurants support centers and in our supply chain.

Brian R. Niccol: And number five expanding access and convenience by accelerating new restaurant openings in North America and internationally.

Brian R. Niccol: Starting with our World class people I'm excited to share that I lean eskenazi join my executive leadership team in November as our Chief Human Resources officer with over 25 years of experience in leading human resources and legal functions across a wide range of industries I'm confident Irene will be instrumental in helping chipotle to develop and retain talent at every level of the organization.

Brian R. Niccol: I am confident Eileen will be instrumental in helping Chipotle develop and retain talent at every level of the organization and enhance the support we provide to our people both in our restaurants and at our support centers. Strengthening Chipotle as a Best-in-Class Employer. As I've said in the past, we want to attract and retain the best people that we can develop and grow.

Brian R. Niccol: <unk> and enhance the support we provide to our people both in our restaurants and at our support centers strengthening chipotle as a best in class employer.

Brian R. Niccol: As I've said in the past, we want to attract and retain the best people that we can develop and grow part of this includes listening to their needs and investing in ways that will help our employees thrive both professionally and personally. This is why we recently added new benefits to our industry, leading benefits platform like enhanced mental health care, a student loan retirement match and additional.

Brian R. Niccol: Part of this includes listening to their needs and investing in ways that will help our employees thrive, both professionally and personally. This is why we recently added new benefits to our industry-leading benefits platform, like enhanced mental health care, a student loan retirement match, and additional financial wellness tools for our workforce. In addition to our benefits, our long-term growth opportunity and promote from within culture provide a path for team members to advance quickly within Chipotle. In fact, in 2023, we promoted over 24,000 people, and over 90% of all restaurant management roles were internal promotions. This includes 87% of field leader positions, which is one of the biggest jumps for our teams going from running one restaurant to an average of eight restaurants.

Brian R. Niccol: Wellness tools for our workforce. In addition to our benefits our long term growth opportunity and promote from within culture provides a path for team members to advance quickly within Chipotle.

Brian R. Niccol: In fact in 2023, we promoted over 24000 people and over 90% of all restaurant management roles were internal promotions. This includes 87% of field leader positions, which is one of the biggest jumps for our teams going from running one restaurant to an average of eight restaurants, the ability to achieve this rate of internal promotions.

Brian R. Niccol: The ability to achieve this rate of internal promotions is a result of our strong restaurant leaders, many of whom started as crew members and who are committed to training and developing our future leaders. A great example is one of our field leaders in New York who has been with Chipotle for over 16 years. He helped to develop and promote over 40 team members who have grown within Chipotle and have gone on to become some of our best general managers, field leaders, team directors, and even one of our regional vice presidents.

Brian R. Niccol: As a result of our strong restaurant leaders many of whom started as crew members and who are committed to training and developing our future leaders.

Brian R. Niccol: Great example is one of our field leaders in New York, who has been with Chipotle for over 16 years. He helped to develop and promote over 40 team members, who have grown within chipotle and have gone onto become some of our best General managers field leaders team directors and even one of our regional Vice Presidents. This is.

Brian R. Niccol: This is the type of person who will help us to deliver on our goals of running great restaurants, delivering industry-leading economics, and expanding to 7,000 restaurants in North America over the long term. Great people executing great cuisine and throughput results in a terrific guest experience and drives performance. And this brings me to our operations. Strong leadership is the key to running successful restaurants with fast throughput. So it is no surprise that the restaurants with the most tenured general managers are executing the best. The good news is that our GM turnover is at some of the lowest levels that I have seen since I joined Chipotle.

Brian R. Niccol: The type of person, who will help us to deliver on our goals of running great restaurants, delivering industry, leading economics and expanding to 7000 restaurants in North America longer term.

Great people executing great culinary and throughput resulted in a terrific guest experience and drives performance.

Brian R. Niccol: And this brings me to our operations strong leadership is the key to running successful restaurants with fast throughput. So it is no surprise that the restaurants with the most tenured general managers are executing the best the good news is our GM turnover is that some of the lowest levels that I have seen since I joined Chipotle and over the last couple of quarters, we've put the building blocks in place to deliver.

Brian R. Niccol: And over the last couple of quarters, we have put the building blocks in place to deliver great throughput. As we mentioned last quarter, we have adjusted the cadence of orders on the digital make line to achieve a better balance of labor between the two lines. Additionally, we began collecting data on the execution of the four pillars of throughput in our restaurants and providing feedback and coaching on a weekly basis. This is allowing our restaurant teams to see progress, which is energizing and motivating as the experience of winning gains momentum. And finally, our teams now have real-time access to their max 15 throughput results in the moment, so our GMs can coach and recognize great throughput while it is happening.

Brian R. Niccol: Rate throughput.

Brian R. Niccol: As we mentioned last quarter, we have adjusted the cadence of orders on the digital make line to achieve a better balance of labor between the two lines. Additionally, we began collecting data on the execution of the four pillars of throughput in our restaurants, and providing feedback and coaching on a weekly basis.

Brian R. Niccol: This is allowing our restaurant teams to see progress, which is energizing and motivating as the experience of winning catches momentum and finally, our teams now have real time access to their Max 15 throughput results in the moment, so our gms can coach and recognize great throughput, while it was happening.

Brian R. Niccol: Sure.

Brian R. Niccol: Since we put these coaching tools in place in the third quarter, we have seen the number of restaurants with at least four crew members on the front line during peak periods improve from 30% to around 50%. This is driving an acceleration in our throughput performance, as the number of entrees in our peak 15 minutes improved by a full point in the fourth quarter compared to last year. I am thrilled to see the progress we are beginning to make, and continuing this momentum is critical as we approach our peak burrito season in mid-March. We'll also further strengthen our industry-leading value proposition, which consists of delicious food made with real ingredients that is customizable, convenient, served quickly, and at an accessible price point.

Brian R. Niccol: Thrilled to see the progress we are beginning to make and continuing this momentum is critical as we approach our peak burrito season in mid March we will also further strengthen our industry leading value proposition, which consist of delicious culinary made with real ingredients that is customizable convenient sir quickly and accessible price point.

Brian R. Niccol: When we are executing on all parts of our value proposition, we are providing a great customer experience, which helps all other drivers of sales to perform better, such as menu innovation, and last year, Chicken Al Pastor and Carne Asada both surpassed our expectations and drove incremental transactions. This is a testament to the cross-functional effort by our marketing, culinary, supply chain, and restaurant teams that do an outstanding job innovating, as well as bringing 2024 will be another exciting year for menu innovation, including one to two limited-time offers and rolling out creative ways to shine a spotlight on our core menu throughout the year. As part of highlighting the core, we recently launched our latest lineup of lifestyle products, which show how the customization of our real ingredients allows Chipotle to embrace all interpretations of wellness, whether it be plant-based, high-protein, keto, paleo, and more. In connection with the launch, we announced a partnership with Strava, the leading digital community for active people with more than 120 million athletes, to encourage and reward healthy habits with a chance to earn free lifestyle. We are giving our fans the right tools to sustain healthy habits in 2024.

Brian R. Niccol: When we were executing on all parts of our value proposition were providing a great customer experience would helps all other drivers of sales to perform better such as menu invade innovation and last year chicken all pastorium carneous out of both surpassed our expectations and drove incremental transactions. This is a testament to the cross functional effort by our marketing culinary.

Brian R. Niccol: Why chain and restaurant teams that do an outstanding job innovating as well as bringing back past favorites that are more delicious each time and are executed seamlessly.

Brian R. Niccol: 2024 will be another exciting year for menu innovation, including one to two limited time offers and rolling out creative ways to shine a spotlight on our core menu throughout the year.

Brian R. Niccol: As part of highlighting the core we recently launched our latest lineup of lifestyle bowls, which shows how the customization of our real ingredients allows chipotle to embrace all interpretations of wellness, whether it be plant based high protein keto Paleo and more in connection with the launch we announced a partnership with <unk>, the leading digital community for active people.

Brian R. Niccol: With more than 120 million athletes to encourage and reward healthy habits with a chance to earn free lifestyle bowls.

Brian R. Niccol: It is giving our fans the right tools to sustain healthy habits in 2024 and beyond.

Brian R. Niccol: In addition to menu innovation, our marketing team continues to do a fantastic job of making the Chipotle brand more visible, more relevant, and more loved to drive difference, culture, and purpose. Our Behind the Foil campaign is a great example as it highlights key differentiators of Chipotle. This includes our restaurant teams preparing our real ingredients made fresh every day using classic culinary techniques such as dicing onions and jalapenos, hand mashing our signature guac, and grilling our adobo chicken, steak, and fajita vegetables on the platter. We will continue to evolve the Behind the Foil campaign in 2024, and it's really exciting to see that our best-performing ads are an authentic behind-the This certainly demonstrates one of our core values, which is that authenticity lives here. Our food is real, and so are we.

Brian R. Niccol: In addition to menu innovation, our marketing team continues to do a fantastic job of making the chipotle brand more visible more relevant and more loved to drive difference culture and drive a purchase our behind the foil campaign is a great example, as it highlights the key Differentiators of Chipotle. This includes our restaurant teams preparing our real ingredients made.

Brian R. Niccol: Fresh every day using classic culinary techniques, such as dicing, onions, and Jalapenos hand, matching our signature guac and grilling, our Adobe chicken steak and fajita veggies on the plot you. We will continue to evolve the behind the foil campaign in 2024, and its really exciting to see that our best performing ads are an authentic behind the scenes look.

Brian R. Niccol: Into a day in the life of a chipotle team members.

Brian R. Niccol: This certainly demonstrates one of our core values, which is authenticity lives here, our food is real and so are we.

Brian R. Niccol: Shifting to amplifying technological innovation, we have made a lot of progress this year on improving the digital experience. We made several enhancements to our app functionality, including order readiness messaging, wrong location detection, reminders to scan for points at checkout, prior order history, and more. This has helped to reduce friction points and improve the overall experience forecast. We also launched FreePotlay for our rewards members, which was successful in driving engagement and enrolling new members as we were able to surprise and delight our guests with free rewards such as guacamole, a beverage, or double meals. From the free potley drops, we were able to learn more about our rewards members to improve our ability to deliver relevant experiences. Finally, we recently rolled out Suggestive Upsell on our app at checkout based on data we have on our rewards members, including prior order history.

Brian R. Niccol: Shifting to amplifying technology innovation, we've made a lot of progress this year on improving the digital experience. We made several enhancements to our app functionality, including order readiness messaging wrong location detection reminders to scan for points of checkout. Prior order history and more this has helped to reduce friction points and improve the overall.

Brian R. Niccol: <unk> for guests.

Brian R. Niccol: We also launched Rappolt way for our rewards members, which was successful in driving engagement and enrolling new members as we were able to surprise and delight, our guests with free rewards such as block a beverage or double meat.

Brian R. Niccol: The free Potently drops we were able to learn more about our rewards members to improve our ability to deliver relevant experiences in the future.

Brian R. Niccol: Finally, we recently rolled out suggestive upsell on our App at checkout based on data we have on our rewards members, including prior order history going forward I believe we are on a multi year path to commercializing our customer data and insights into more targeted marketing campaigns and improving the overall digital experience that will drive increase.

Brian R. Niccol: Going forward, I believe we are on a multi-year path to commercializing our customer data and insights into more targeted marketing campaigns and improving the overall digital experience that will drive increased frequency and spend over time. I also wanted to spend a few minutes providing an update on our Cultivate Next Fund, which launched two years ago with the objective of making early-stage investments into strategically aligned companies that further our mission to cultivate a better world and accelerate our strategic priorities. Since launching this fund, the amount of innovation that we have seen across the food tech landscape has surpassed our expectations and encompasses everything from farming, to supply chain, to alternative proteins and oils, to in-restaurant automation and more. We have reviewed hundreds of innovative companies and have made seven investments, of which there are many opportunities for commercial engagement. This includes Hyphen, which we are partnering with to develop our automated digital make line, and Viboo, which we are partnering with to develop AutoCADO, which cuts, cores, and scoops avocados.

Brian R. Niccol: Frequency and spend over time.

Brian R. Niccol: I also wanted to spend a few minutes, providing an update on our cultivate next one which launched two years ago with an objective of making early stage investments into strategically aligned companies that further our mission to cultivate a better world and accelerate our strategic priorities.

Since launching this fun the amount of innovation that we've seen across the food Tech landscape has surpassed our expectations and encompasses everything from farming to supply chain. So alternative proteins and oils to in restaurant automation and more we've reviewed hundreds of innovative companies and have made seven investments of which there are many opportunities for commercial engagements.

Brian R. Niccol: This includes hyphen, which we are partnering with to develop our automated digital make line and vivo, which we are partnering with to develop autocar the cuts cores and scoops avocados.

Brian R. Niccol: Both Hyphen and AutoCADO could help to improve the overall experience for our teams by removing less favorably tasks and for our guests by providing on-time, accurate, and delicious food. We continue to work on iterations of each technology at our Cultivate Center. And the good news is that we plan to pilot the automated digital make line and Autocado in a restaurant in 2024 as part of our stage gate. Last month, we announced two more investments in Greenfield Robotics and Nitricity. Greenfield Robotics provides regenerative agriculture solutions without chemicals using fleets of autonomous robots to weed fields.

Brian R. Niccol: Both hyphen and Autocar could help to improve the overall experience for our teams by removing less favorable tests and for our guests by providing on time accurate and delicious food.

Brian R. Niccol: We continue to work on iterations of each technology at our cultivate center and the good news is that we plan to pilot the automated digital make line and at Ocado in a restaurant in 2024 as part of our stage gate process last.

Brian R. Niccol: Last month, we announced two more investments in Greenfield robotics and matrices.

Brian R. Niccol: Greenfield Robotics provides regenerative agriculture solutions without chemicals, using fleets of autonomous robots to weed fields and matrices. He uses technology to tackle greenhouse gas emissions by creating natural fertilizer products better better for fields farmers and the environment. We believe both Greenfield robotics Ni Tracy could play an important.

Brian R. Niccol: And Nitricity uses technology to tackle greenhouse gas emissions by creating natural fertilizer products that are better for fields, farmers, and the environment. We believe both greenfield robotics and nitricity could play an important role in ensuring a more sustainable future for farms within our supply chain. Our suppliers are a key enabler of Chipotle's growth and help us to further our purpose of cultivating a better world. We will continue to find innovative ways to support their ability to grow, harvest, and supply the high quality, sustainably raised, real ingredients that Chipotle needs. Our final strategic pillar is expanding access, and our development team has done an incredible job of meeting our development targets, despite the timeline challenges we continue to face. In the fourth quarter, we opened 121 new restaurants, and for the full year, we opened 271 new restaurants, which is the highest number of openings in the company's history in a single quarter and in a single year.

Brian R. Niccol: Role in ensuring a more sustainable future for farms within our supply chain.

Brian R. Niccol: Our suppliers are a key enabler of Chipotle is growth and help us to further our purpose of cultivating a better world. We will continue to find innovative ways to support their ability to grow harvest and supply the high quality sustainably raised real ingredients that chipotle serves.

Brian R. Niccol: Our final strategic pillars, expanding access and our development team has done an incredible job of meeting our development targets. Despite the timeline challenges we continue to see in the fourth quarter, We opened 121, new restaurants and for the full year. We opened 271, new restaurants, which is the highest number of openings in the company's history in a single quarter and.

Brian R. Niccol: In a single year.

Brian R. Niccol: We have now surpassed 800 Chipotles and continue to see very strong results with Chipotle driving higher new restaurant productivity, margins, and return. Additionally, this year, we had some fantastic openings in new markets, with our first restaurant in Calgary breaking an opening day record and sustaining very high volumes post-opening day. When we serve delicious food with exceptional operations and execute great local marketing, our brand gains traction quickly, and Canada is a testament to that.

Brian R. Niccol: We have now surpassed 800 chipotle.

Brian R. Niccol: And continue to see very strong results with Chipotle and is driving higher new restaurant productivity margins and returns. Additionally, this year, we had some fantastic openings in new markets with our first restaurant in Calgary braking and opening day record and sustaining very high volumes post opening day.

When we serve delicious food with exceptional operations and execute great local marketing our brand gains traction quickly in Canada is a testament to this we will continue to accelerate our growth in Canada in 2024 with 10 to 14, new restaurant openings planned representing 25% to 35% growth for the country and in total we continue to target too.

Brian R. Niccol: We will continue to accelerate our growth in Canada in 2024 with 10-14 new restaurant openings planned, representing 25-35% growth for the country, and in total, we continue to target 285-315 new restaurant openings in 2025, mostly in North America, with over 80%, including at Chipotle. So to conclude, I want to thank our 115,000 employees for their hard work, which drove strong results in 2020. We hit some big milestones, including surpassing 3,400 restaurants, 800 Chipotle locations, $3 million in AUVs, and forming our first international partner. As I look forward, I see the opportunity, in the longer term, to more than double our restaurants in North America, increase our penetration of Chipotle lanes, surpass $4 million in AUVs, expand our industry-leading margins and returns, and further our purpose of cultivating a better world globally As I mentioned in the beginning, this ambitious plan will require exceptional people, exceptional food, and exceptional throughput. The good news is that I am certain we have the right people and the right strategy to achieve it. So with that, I will turn it over to Jack. Thanks, Brian. And good afternoon, everyone.

Brian R. Niccol: <unk> hundred 85 to 315, new restaurant openings in 2024.

Brian R. Niccol: Mostly in North America with over 80%, including a chipotle.

Brian R. Niccol: Yeah.

Brian R. Niccol: So to conclude I want to thank our 115000 employees for their hard work, which drove strong results in 2023, we hit some big milestones, including surpassing 3400 restaurants, 800, Chipotle <unk> $3 million in Au vs. Informing our first international partnership as I look forward I see the <unk>.

Brian R. Niccol: Opportunity longer term to more than double our restaurants in North America increase our penetration of triple veins surpassed $4 million in Suvs expand our industry, leading margins and returns and further our purpose of cultivating a better world globally as I mentioned at the beginning this ambitious plan will require exceptional people exceptional food.

Brian R. Niccol: And exceptional throughput the good news is that I'm certain we have the right people and the right strategy to achieve it so with that I will turn it over to Jack.

Thanks, Brian and good afternoon, everyone sales in the fourth quarter grew 15% year over year to reach $2 $5 billion as comp sales grew eight 4% driven by over 7% transaction growth.

Jack Hartung: Sales in the fourth quarter grew 15% year over year to reach $2.5 billion as comp sales grew 8.4% driven by over 7% transaction growth. Restaurant level margin of 25.4% increased about 140 basis points compared to last year. And earnings per share adjusted for unusual items was $10.36, representing 25% year-over-year growth. The fourth quarter had unusual expenses related to elevated depreciation and changes to a legal contingency.

Jack Hartung: Restaurant level margin of 25, 4% increase about 140 basis points compared to last year and earnings per share adjusted for unusual items was $10 36, representing 25% year over year growth.

Jack Hartung: The fourth quarter had unusual expenses related to elevated depreciation and changes to our legal contingency.

Jack Hartung: Looking at fiscal 'twenty 'twenty four we anticipate comps in the mid single digit range for the full year. As a reminder, we were impacted by unusually cold weather throughout the country in January as the weather has normalized our underlying sales trends remain strong and they support our full year guidance range.

Jack Hartung: Looking at fiscal 2024, we anticipate comps in the mid-single-digit range for the full year. As a reminder, we were impacted by unusually cold weather throughout the country in January. As the weather has normalized, our underlying sales trends remain strong, and they support our full-year guidance range. Additionally, Q1 will include the benefit of an extra day due to leap year, but this will be offset by Easter shifting into Q1 this year compared to Q2 of last year. I'll now go through the key P&L line items, beginning with cost of sales. Cost of sales in the quarter was 29.7%, an increase of about 40 basis points from last year.

Jack Hartung: Q1 will include the benefit of an extra day due to leap year, but this will be offset by Easter shifting into Q1, this year compared to Q2 of last year.

Speaker Change: I'll now go through the key P&L line items, beginning with cost of sales.

Speaker Change: Cost of sales in the quarter with 29, 7% an increase of about 40 basis points from last year, a larger mix shift to be due to the success of Carneous auto as well as elevated costs across the board, most notably beep protos producing queso was partially offset by the benefit of menu price increases and lower paper costs.

Speaker Change: For Q1, we expect our cost of sales to be in the low 29% range has the benefit of the mix shift out of carnitas auto will be partially offset by higher costs across several line items, most notably avocados and tortillas.

Jack Hartung: A larger mixed shift to beef due to the success of carne asada, as well as elevated costs across the board, most notably beef, produce, and queso, were partially offset by the benefit of menu price increases and lower paper costs. For Q1, we expect our cost of sales to be in the low 29% range, as the benefit of the mixed shift out of carne asada will be partially offset by higher costs across several line items, most notably avocados and tortillas. We anticipate cost of sales inflation to be in the low to mid-single-digit range for the full year. Labor costs in the fourth quarter were 25%, a decrease of about 60 base points from last year.

Speaker Change: We anticipate cost of sales inflation to be in the low to mid single digit range for the full year.

Speaker Change: Labor costs for the fourth quarter with 25% a decrease of about 60 basis points from last year, the benefit of sales leverage and better labor execution more than offset wage inflation and higher performance based compensation.

Speaker Change: For Q1, we expect our labor cost to be in the low 25% range with wage inflation in the low to mid single digit range and we anticipate wage inflation will pick up to the mid single digit range as California wages go up around 20% in April of this year.

Speaker Change: Other operating costs for the quarter were 14, 7% a decrease of about 100 basis points from last year. The decrease was driven by sales leverage as well as lower marketing and promo costs, which were three 1% of sales in Q4, a decrease of about 30 basis points from last year.

Jack Hartung: The benefit of sales leverage and better labor execution more than offsets wage inflation and higher performance-based compensation. For Q1, we expect our labor costs to be in the low 25% range with wage inflation in the low to mid-single-digit range, and we anticipate wage inflation will tick up to the mid-single-digit range as California wages go up around 20% in April of this year. Other operating costs for the quarter were 14.7%, a decrease of about 100 basis points from last year. The decrease was driven by sales leverage as well as lower marketing and promotion costs, which were 3.1% of sales in Q4, a decrease of about 30 basis points from last year.

Speaker Change: In Q1, we expect marketing cost to be in the low 3% range with full year to come in right around 3% in Q1 other operating costs are expected to be in the high 14% range.

Speaker Change: For the quarter was $169 million on a GAAP basis or $170 million on a non-GAAP basis, excluding about $1 million.

Speaker Change: Change in a legal contingency.

Speaker Change: They also include $122 million in underlying G&A.

Speaker Change: $36 million related to noncash stock compensation.

Speaker Change: $10 million related to higher bonus accruals and payroll taxes on equity vesting and exercises and $2 million related to our upcoming all manager conference, which is scheduled for Q1 of this year.

Jack Hartung: In Q1, we expect marketing costs to be in the low 3% range, with full year to come in right around 3%. In Q1, other operating costs are expected to be in the high 14% range. GNA for the quarter was $169 million on a cap basis or $170 million on a non-cap basis excluding about $1 million change in a legal contingency.

We expect our underlying G&A to be around $127 million in Q1 and step up each quarter as we make investments in people and technology to support our ongoing growth.

Speaker Change: Just make stock comp will be around $32 million in Q1, although this amount could move up or down based on our actual performance and are subject to the vinyl 'twenty 'twenty four grants, which are issued in Q1.

Jack Hartung: GNA also includes $122 million in underlying GNA and $36 million dollars related to non-cash stock compensation. $10 million related to higher bonus accruals and payroll taxes on equity vesting and exercise and $2 million related to our upcoming All-Manager Conference, which is scheduled for Q1 of this year. We expect our underlying G&A to be around $127 million in Q1 and step up each quarter as we make investments in people and technology to support our ongoing growth. We anticipate stock comp will be around $32 million in Q1, although this amount could move up or down based on our actual performance and is subject to the final 2024 grants which are issued in Q1. We also expect to recognize around $7 million related to employer taxes associated with shares that sell during the quarter and $21 million for costs associated with our biannual All Manager Conference in March, bringing our anticipated total G&A in Q1 to around $187 million.

Speaker Change: We also expect to recognize around $7 million related to employer taxes associated with shared that that during the quarter and $21 million for costs associated with our biannual all manager conference in March, bringing our anticipated total G&A in Q1 to around $187 million.

Speaker Change: Adjusted depreciation for the quarter was $79 million or three 1% of sales and for 'twenty 'twenty four we expect it to remain right around this level as a percent of sales.

Speaker Change: Our effective tax rate for Q4 was 26, 2% for both GAAP and non-GAAP and for 'twenty 'twenty four we continue to estimate our underlying effective tax rate will be in the 25% to 27% range, though it may vary based on discrete items are.

Speaker Change: <unk> remained strong as we ended the quarter with $1.9 billion in cash restricted cash and investments with no debt and during the fourth quarter, we repurchased $144 million of our stock at an average price of $1936 for the full year, we repurchased a total of $590 million at an average price of $1827.

Speaker Change: And going forward, we will continue to opportunistically repurchase our stock.

Speaker Change: In the quarter, our board authorized an additional $200 million towards share authorization program and at the end of the quarter, we had $424 million remaining.

Jack Hartung: Adjusted depreciation for the quarter was $79 million, or 3.1% of sales, and for 2024, we expect it to remain right around this level as a percent of sales. Our effective tax rate for Q4 was 26.2% for both GAAP and non-GAAP, and for 2024, we continue to estimate our underlying effective tax rate will be in the 25% to 27% range, though it may vary based on discrete items. Our balance sheet remains strong as we ended the quarter with $1.9 billion in cash, restricted cash, and investments with no debt. And during the fourth quarter, we repurchased $144 million of our stock at an average price of $1,936. For the full year, we repurchased a total of $590 million at an average price of $1,827.

Speaker Change: We opened a record 121, new restaurants in the fourth quarter of which 110 had a chipotle and as we mentioned last quarter. We anticipate opening between 285 and 350, new restaurants in 2024 with over 80%, having a chipotle, we continue to see developers delaying projects due to macro pressures and high interest rates, along with permitting and inspection and utility.

Speaker Change: Installation delays the midpoint of our guidance range assumes these challenges persist and we remain on track to move towards the high end of the 8% to 10% range by 2025, assuming conditions do not worsen.

Speaker Change: In closing totally as a purpose driven company that's been able to scale over the last 30 years into one of the largest restaurant brands in the world and exciting part is that we still have a long growth runway in front of us our strong economic model gives us a high degree of confidence that our ambitious growth objectives are achievable, if not beatable and as we continue to protect and strengthen our economic model.

Jack Hartung: And going forward, we'll continue to opportunistically repurchase our stock. During the quarter, our board authorized an additional $200 million to our Share Authorization Program, and at the end of the quarter, we had $424 million remaining. We opened a record 121 new restaurants in the fourth quarter, of which 110 had a Chipotle. And as we mentioned last quarter, we anticipate opening between 285 and 315 new restaurants in 2024, with over 80% having a Chipotle. We continue to see developers delaying projects due to macro pressures and high interest rates, along with permitting, inspection, and utility installation delays.

Speaker Change: Our long term growth opportunity will only expand just as it has over the last 30 years. So thank you to all of our employees for their hard work and their dedication to chipotle and let's keep the momentum going in 'twenty 'twenty four with that we'll open the lines for your questions.

Speaker Change: We will now begin the question and answer session.

Speaker Change: To ask a question you May press Star then one on your telephone keypad.

Speaker Change: If you were using a speakerphone please pick up your handset before pressing the keys.

Speaker Change: At any time. Your question has been addressed and you would like to withdraw. Your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.

Jack Hartung: The midpoint of our guidance range assumes these challenges persist, and we remain on track to move towards the high end of the 8% to 10% range by 2025, assuming conditions do not worsen. In closing, Chipotle is a purpose-driven company that's been able to scale over the last 30 years into one of the largest restaurant brands in the world. The exciting part is that we still have a long growth runway in front of us. Our strong economic model gives us a high degree of confidence that our ambitious growth objectives are achievable, if not beatable. And as we continue to protect and strengthen our economic model, our long-term growth opportunities will only expand, just as they have over the last 30 years.

Speaker Change: The first question comes from Andrew Charles with TD Cowen. Please go ahead.

Andrew M. Charles: Great. Thanks, Brian I appreciate the ambitions that you talked about for $4 million vs and I think the same drivers that were used to reach the $3 million level are still the largest drivers to get to the $4 million level, which includes operations marketing little teach choline and menu innovation, but if you look back for a several years from now.

Andrew M. Charles: You get to that $4 million fast and expected you would drive or do you think could work better than it has in recent years or maybe you can think about it differently are there new drivers that will help you get to the $4 million level, such as catering breakfast or automation and then Jakob a follow up.

Jack Hartung: So thank you to all of our employees for their hard work and their dedication to Chipotle. Let's keep the momentum going in 2024. With that, we'll open the lines for your questions. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.

Jakob: Yeah. Thanks for the question.

Jakob: Look I I do believe at the end of the day, the thing that will get us to $4 million and probably beyond that is going to be great execution in the restaurants, meaning focusing on great culinary great people and green throughput.

Operator: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Andrew Charles with T.D. Cowan.

Jakob: You know I think we're very fortunate that it doesn't require another day part it doesn't require.

Andrew M. Charles: Please go ahead. Great, thanks. Brian, I appreciate the ambitions that you talked about for $4 million AUVs. And I think the same drivers that were used to reach the $3 million level are still the largest drivers to get to the $4 million level, which includes operations, marketing, loyalty, Chipotle, and menu innovation. But if you look back from several years from now, and you get to that $4 million fast and expected, what driver do you think could work better than it has in recent years? Or maybe you think about it differently?

Jakob:

Jakob: Something that we are currently doing today to achieve that result.

Jakob: Things like automation.

Jakob: And then on Ocado and continuing to do things with our rewards program the menu innovation the marketing well.

Jakob: Obviously be things that push us further and further but one thing I think that we've demonstrated this last quarter is when we perform.

Jakob: Better on the operation front, all those things I just listed off Howdy I'll just call it almost like a multiplying effect.

Brian R. Niccol: Are there new drivers that will help you get to the $4 million level? Such as catering, breakfast, or automation? And then Jack, I have a follow-up question. Yeah, thanks for the question. You know, look, I do believe, at the end of the day, the thing that will get us to four million and probably beyond that is going to be great execution in the restaurant, meaning focusing on great cuisine, great people, and great throughput. You know, I think we're very fortunate that it doesn't require another daypart, it doesn't require, you know, something that we aren't currently doing today to achieve that result. I do think things like automation, like hyphen and AutoCAD and continuing to do things with our rewards program, the menu innovation, and marketing will obviously be things that push us further and further.

Jakob: Now the good news is we saw a lot of headroom to go on operational execution and I think we've got the right things in place for the long term to get us to that $4 million and beyond.

Speaker Change: That's helpful and then checked my questions around the mechanics to get to that $4 million level. I mean, do you expect sustained mid single digit same store sales to get there or do you think the law of large numbers kicks in at some point in the out years that low single digits. The right rate of same store sales growth and similarly, what kind of margins do you think the business can support you know at 4 million dollar volume.

Speaker Change: Assuming normalized commodity and labor inflation.

Speaker Change: Yeah, Andrew you know, it's really hard to predict you know over a long period of time into the future what comps are going to do I think for the foreseeable future. Our guidance next year and mid single digit I think makes sense, but if you look at our history, we have a history of having outsized comps when the economy is going well when our operations are going well.

Brian R. Niccol: But one thing I think that we demonstrated this last quarter is that when we perform better on the operational front, all those things I just listed off have, I would call it, almost like, a multiplying effect. So, you know, the good news is we still have a lot of headroom to go on operational execution, and I think we've got the right things in place for the long term to get us to that four million. Jack, my question is about the mechanics to get to that $4 million level.

Speaker Change: Well.

Speaker Change: I wouldn't I would argue even the acceleration we saw in the fourth quarter was we had a great combination of demand being created by Canio side on what's become a favorite of our customers and throughput, allowing those sales to flow through in there.

Speaker Change: Those are the and I would expect those things to happen in the future, they're very hard to predict how.

Speaker Change: And when Theyre going to happened Andrew but those are the things that chipotle has seen in the past and I think that will likely happen in the future as well, but keep in mind that these volumes every time you add at a mid single digit you were talking about $150000 layer and it keeps growing over time, so the 4 million while its an aspirational goal and certainly it's something we think that we definitely will.

Jack Hartung: I mean, do you expect sustained mid-single-digit same-store sales to get there, or do you think the law of large numbers kicks in at some point in the future that low single digits is the right rate of same-store sales growth? And similarly, what kind of margins do you think the business can support at $4 million volumes, assuming normalized commodity and labor inflation? Yeah, Andrew, you know, it's really hard to predict, you know, over a long period of time into the future, what comps are going to do. I think, for the foreseeable future, our guidance next year in the mid single digits, I think makes sense.

Speaker Change: They're firmed up margins I Wouldnt truck margins.

Speaker Change: Span, we still expect to see a pass through every time, we grow our transaction grow our sales through additional customers.

Speaker Change: About 40% flow through at that 40% gets average day in against the 26%. We delivered last year I would expect the margins to go up and as we get up to 4 million I would expect we'd be in the high 20%, maybe even in the 30% range again youre talking about predicting something over a very long period of time, but our margins will definitely get stronger over time, which means our.

Jack Hartung: But if you look at our history, we have a history of having outsized comps when the economy is going well, when our operations are going well. You know, I would argue even the acceleration we saw in the fourth quarter was because we had a great combination of demand being created by carne asada, which is the common favorite of our customers, and throughput, allowing those sales to flow through. And, you know, those are the things I would expect those things to happen in the future.

Speaker Change: Returns will get stronger as well as we move from 3 million to 4 million.

Speaker Change: Very helpful. Thank you Beth.

Speaker Change: The next question comes from David Tarantino with Baird. Please go ahead.

David E. Tarantino: Hi, I'm good.

David E. Tarantino: Afternoon, congratulations on a great 2023.

Jack Hartung: They're very hard to predict how and when they're going to happen, Andrew, but those are the things that Chipotle has seen in the past. And I think that will likely happen in the future as well. But keep in mind, at these volumes, every time you add in a mid single digit, you're talking about a $150,000 layer, and it keeps growing over time.

David E. Tarantino: My question is really about the unit growth and I've got two parts to that I think you've been talking about.

David E. Tarantino: 7000 restaurants in North America for a while and as you build.

David E. Tarantino: More more and more chipotle ins and see the returns you're getting I'm just wondering if that number could prove low in your mind is there upside to the 7000 over time.

Jack Hartung: So the 4 million, while it's an aspirational goal, is certainly something we think we will get there. In terms of margins, I would expect margins to continue to expand; we still expect to see a pass through every time we grow our transactions and grow our sales through additional customers, about a 40% flow through. As that 40% gets averaged in against the 26% we delivered last year, I would expect the margins to go up. And as we get up to 4 million, I would expect we'd be, you know, in the high 20%, maybe even in the 30% range. Again, you're talking about predicting something over a very long period of time, but our margins will definitely get stronger over time, which means our returns will get stronger as well as we move from 3 million to 4 million. Very helpful. Thank you. The next question comes from David Tarantino with Baird. Please go ahead. Hi, Good afternoon,

David E. Tarantino: And then I guess the second part of that question is I know you want to grow faster than and Jack you mentioned.

David E. Tarantino: Getting to 10% unit growth next year is it goal I'm just wondering what line of sight you have to that at this point that you can share with us.

Speaker Change: Yes, why don't I go ahead, and get started David and then I'll, let Jack So when you look at the way we've come to the 7000 number is we've looked at.

Speaker Change: What our penetration levels are.

Speaker Change: And in some of the places where we have the most penetration we continue to build restaurants with success.

Speaker Change: Which then gives us the confidence to do the exercise to say, okay, well. If you just apply that math to the rest of the country.

Speaker Change: We quickly add up to 7000.

So we think it's very practical goal some might say conservative, but we definitely think it's a practical goal and.

Speaker Change: Probably as we get closer I think Jack has talked about this in the past like at one point, we were talking about having 3000 Chipotle spend we said 4000 and then we said 5000 here we are at 7000.

Jack Hartung: I hope it does prove to be conservative, but I think the brand has got a lot of upside in it but that's how we get to the 7000.

David E. Tarantino: Congratulations on a great 2023. My question is really about unit growth. And I've got two parts to that. I think you've been talking about it. 7,000 restaurants in North America for a while, and as you build more and more Chipotle and see the returns you're getting, I'm just wondering if that number could prove low in your mind. Is there upside to the 7,000 over time? And then I guess the second part of the question is, I know you want to grow faster, and Jack, you mentioned, getting to 10% unit growth next year. I'm just wondering what line of sight you have on that at this point that you can share. Yeah, why don't I go ahead and get started, David. And then I'll let Jack fill in.

Jack Hartung: Yes, David on the how do you get to 10%. Our visibility is is is quite good our inventory building that the teams have been doing is really really strong in fact, the team has had to build more inventory than we normally would need to basically offset these timelines you timeline.

Jack Hartung: Really delayed everything so I think you talked about instead of 15 16 months.

Jack Hartung: From when you get a deal to open it sound more like 'twenty, one 'twenty two months or so but each year. The team builds a stronger inventory the results of the new openings has been outstanding. So the quality has been very very high. So the inventory itself looks really really good and if we get any break in terms of timelines with developers moving a little bit faster.

Brian R. Niccol: You know, look, the way we've come to the 7000 number is that we've looked at, you know, what our penetration levels are. And in some of the places where we have the most penetration, we continue to build restaurants with success, which then gives us the confidence to do the exercise to say, Okay, well, if you just apply that math to the rest of the country, we quickly add up to 7,000. So we think it's a very practical goal. Some might say it's conservative, but we definitely think it's a realistic goal.

With local.

Jack Hartung: Authorities in terms of utility in terms of permitting that was a little bit faster, we actually can get to that clip, even a little sooner, but we built in the exact same extended timeline that we're seeing today with the current very robust inventory and that will get us.

Jack Hartung: It's not all the way very close to that 10% bigger.

Jack Hartung: And then just a quick follow up Jack or are you seeing any signs at all that the timeline.

Brian R. Niccol: And, you know, probably as we get closer, I think Jack's talked about this in the past, like at one point, we were talking about having 3,000 Chipotles. Then we said 4,000, then we said 5,000. And here we are at 7,000. You know, I hope it does prove to be conservative. I think the brand's got a lot of upside in it, but that's how we get to 7,000. David, how do you get to 10%?

Could be getting a little bit shorter or any signs of life there.

Jack Hartung: Not not anything sustained David So I mean, our teams are working really really hard at it.

Jack Hartung: The most recent challenges and developers with high interest rates. They are pausing a little bit I do think if interest rates improved this year I do think that will that will help but nothing that I would bank on right now we're certainly working hard at it though.

Speaker Change: Great. Thank you very much.

Jack Hartung: Our visibility is quite good. Our inventory building that the teams have been doing is really, really strong. In fact, the team has had to build more inventory than we normally would need to basically offset these timelines. These timelines have really delayed everything, so instead of 15, 16 months from when you get a deal to open, it's now more like 21, 22 months or so.

Speaker Change: The next question comes from Lauren Silberman with Deutsche Bank. Please go ahead.

Thank you I wanted to ask one of Grupo that's clearly a big area of focus driver of traffic. This year can you talk about how you see the potential traffic opportunity in 24, driven by throughput and just the priorities to get there to further unlock that opportunity.

Jack Hartung: But each year, the team builds a stronger inventory. The results of the new openings have been outstanding. So the quality has been very, very high. So the inventory itself looks really, really good.

Lauren Silberman: Yeah, well, obviously, we're really delighted to see over seven points of transaction growth in the fourth quarter.

Lauren Silberman: Think thats a testament to.

Lauren Silberman: Our operations teams in the field.

Jack Hartung: And if we get any break in terms of timelines with developers moving a little bit faster with local authorities in terms of utilities, in terms of permits, if that was a little bit faster, we could actually get to that clip even a little sooner. But we built in the exact same extended timeline that we're seeing today with the current very robust inventory, and that will get us, if not all the way, very close to that 10%. And just a quick follow-up, Jack, are you seeing any signs at all that the timeline... is getting a little bit shorter? No, not anything sustained, David.

Lauren Silberman: Having a focus on getting great throughput and we've talked about this quite a bit there's the four pillars of great throughput I'd say, we're kind of still in the early stages of theirs, because we're just getting people in position. So I think you heard my comments about hey, we now have four people on the frontline almost 50% of the time.

Lauren Silberman: That's only one component of the four pillars and I'll. If you really think about it right is that part of our idea of music lastly, we want to be prepared people in position ready to go. So we still are a lot of upside on making sure that we have the expo aligned backer.

Lauren Silberman: In position and ready to go so.

Jack Hartung: So, I mean, our teams are working really, really hard at it. You know, the most recent challenge has been developers with high interest rates. They're pausing a little bit. I do think if interest rates improve this year, I do think that will help, but nothing that I would bank on right now.

Lauren Silberman: We're still we still think we're early early days on this there's a lot of upside to it.

Speaker Change: I am delighted to see the progress though.

Speaker Change: We've increased our Max 15 pretty much every month.

Speaker Change: Around 2023.

Speaker Change: And it's also a our best results in December and those trends continued into January so.

Jack Hartung: We're certainly working hard on it. Great. Thank you very much. The next question comes from Lauren Silberman with Deutsche Bank. Please go ahead.

Speaker Change: Lots of space to still grow into.

Lauren Silberman: Thank you. I wanted to ask you two questions. One on throughput, clearly a big area of focus for traffic this year. Can you talk about how you see the potential traffic opportunity in 24 driven by throughput and just the priorities to get there to further unlock that opportunity? Yeah, well, obviously, we're really delighted to see over seven points of transaction growth in the fourth quarter. I think that's a testament to, you know, operations teams in the field, having a focus on getting great throughput. And We've talked about this quite a bit.

Speaker Change: The thing I Love is that the teams are laser focused on getting after it I think we've now giving them more tools. So they had better visibility on how they're performing real time, and Oh I hate to visit restaurants first thing that's on People's minds.

Speaker Change: How are we doing on our throughput how are we doing on our culinary and how are we doing with our.

Speaker Change: People and culture, so it's nice to see.

Speaker Change: Great. Thank you and if I could just ask on quick one on menu innovation and how Youre thinking about I know you mentioned one to two this year.

Speaker Change: I know you typically do and L. T O on chicken and this spring and then beef later in the fall any change to how youre thinking about cadence, especially as you consider sort of throughput and operations.

Brian R. Niccol: Now, there are the four pillars of great throughput. I'd say we're kind of still in the early stages of this, because we're just getting people in position. So I think you heard my comments about, hey, we now have four people on the front line, almost 50% of the time. That's only one component of the four pillars.

Speaker Change: Yeah, I mean look I think what we've demonstrated this past year is that.

Speaker Change: Absolutely a cadence that our operators can execute great throughput with so.

Speaker Change: It delivered.

Brian R. Niccol: And if you really think about it, right, it's part of our idea of mise en place, like we want to be prepared people in position ready to go. So we still have a lot of upside on making sure that we have the expo, the linebacker in position and ready to go. So we're still, we still think we're in the early, early days on this.

Speaker Change: <unk> is Sato with excellence.

Speaker Change: They did the same thing I'm, sorry, chicken I'll pass store.

Speaker Change: With excellence and then followed that up with Carnitas Sato.

So.

Speaker Change: We feel really good about doing one or two a year I think youre also going to see is this year do a little bit more spotlighting, even on the core menu, which we're doing right now with our lifestyle bowls, and then you'll see us do that as well during the year. So.

Brian R. Niccol: There's a lot of upside to it. I am delighted to see the progress, though. You know, we've increased our max 15 pretty much every month throughout 2023 and saw some of our best results in December, and those trends continued into January. So there is lots of space to still grow into, but the thing I love is that the teams are laser focused on getting after it.

Speaker Change: We think we've got the right cadence, we think we've got the right.

Speaker Change: Innovation pipeline and also the things that we've done in the past we've demonstrated we can revisit those with success.

Speaker Change: For someone who's got news on it.

Speaker Change: Great. Thanks, so much.

Speaker Change: The next question comes from Brian Harper with Morgan Stanley. Please go ahead.

Brian Harper: Yes, thanks, good afternoon.

Brian R. Niccol: I think we've now given them more tools so that they have better visibility on how they're performing in real time. And you know, when I get to visit restaurants, it's the first thing that's on people's minds. How are we doing on our throughput? How are we doing on our cuisine, and how are we doing with people and culture. So it's nice. Great, thank you.

Brian Harper: You know, Brian you mentioned just suggestive of self.

Brian Harper: Check out and I was curious you know now theme or maybe just a bar, saying what.

Brian Harper: What are some things that you think you could do to drive check.

Brian R. Niccol: And if I could just ask a quick one on menu innovation, how you're thinking about I know you mentioned one to two this year. I know you typically do an LTO on chicken this spring and then beef later in the fall. Any change to how you're thinking about cadence, especially as you consider sort of throughput and operations? Yeah, I mean, look, I think what we've demonstrated this past year is that's definitely a cadence that our operators can execute great throughput with. So, you know, they delivered pollo asado with excellence. And then they did the same thing.

Brian Harper: Check right I think we've talked a lot about transactions, but what do you think could be checked drivers as we think about this year and beyond.

Speaker Change: Yeah look I think what are the things it's been really nice to see is the incidence of our size has continued to go up.

Brian Harper: Kind of like queso and chips and salsa.

Brian Harper: We're continuing to see people, adding on to their entrees and I think that has a lot to do with what we're able to do digitally both.

Brian Harper: At the point of checking out as well as how we communicate with people through our rewards program right.

Brian Harper: So.

Brian R. Niccol: I'm sorry, chicken al pastor with excellence and then followed that up with carne asada. So, you know, we feel really good about doing one or two a year. I think you're also going to see us this year do a little bit more spotlighting, even on the core menu, which we're doing right now with our lifestyle goals. And then you'll see us do that as well during the year.

Brian Harper: The suggestive sell example, I'm talking about we've now turned that into a smart suggestive sale. So I'll give you. The best example of a really simple one historically you get a Mexican coke with your order when you get to checkout. If you don't have Mexican coke in your basket. We will serve you suggest a sale of Hey, you forgot your Mexican coke.

Brian R. Niccol: So we think we've got the right cadence. We think we've got the right innovation pipeline. And also, the things that we've done in the past, we've demonstrated, we can revisit those with success, as we have done most recently. Great. Thanks so much.

Brian Harper: Versus before we might have just been saying, Hey, maybe you should think about chips and queso.

Brian Harper: So what we're seeing is that type of insight into the individual results and more personal commercialization or higher check as they check out because we're serving a lot of things that they historically usually added to their ticket.

Brian Harbour: The next question comes from Brian Harbour with Morgan Stanley. Please go ahead. Yeah, thanks. Good afternoon.

Brian Harper: So we're seeing that make great progress and then obviously I think our queso chips and guac are pretty darn specials. So the more people learn and experience it the more they want to add it to their check.

Brian R. Niccol: Um, you know, Brian, you mentioned just suggesting an upsell at checkout. And I was curious, on that theme, or maybe just a bar theme, what, you know, what are some things that you think you could do to drive check, right? I think we've talked a lot about transactions, but what do you think could be check drivers as we think about this year and beyond? Yeah, look. I think one of the things that's been really nice to see is that the incidence of our side effects has continued to go up. You know, like queso and chips and salsa.

Speaker Change: Okay, great. Thank you.

Speaker Change: Jack or will you are you willing to comment just on kind of the levels of price I guess, one can you maybe it looks similar to the fourth quarter, but are you willing to comment on the level of pricing, you'll see them just factoring in kind of California. As we start to think about you know, perhaps the second quarter, Yeah, Q1 will be similar call. It in that 2.5% to 3% range in Q.

Brian R. Niccol: We're continuing to see people adding on to their entrees, and I think that has a lot to do with what we're able to do digitally, both at the point of checking out as well as how we communicate with people through our rewards program. Right. So, you know, the suggestive sale example I'm talking about, we've now turned that into a smart suggestive sale. So I'll give you the best example, or a really simple one.

Speaker Change: One we haven't made a final decision.

Speaker Change: Terms of pricing with the fast Act, we know we have to take something Thats a significant increase when you talked about 20%.

Speaker Change: 20 percentage increase in wages.

Speaker Change: And I think we've talked in the past that there is.

Speaker Change: One approach, where you would cover the profitability, so you'd breakeven from a profitability standpoint.

Brian R. Niccol: You know, historically, you get a Mexican Coke with your order. When you get to checkout, if you don't have Mexican Coke in your basket, we will serve you a suggestive sale of, hey, you forgot your Mexican Coke. Compared to before, we might have just been saying, hey, maybe you should think about chips and queso. So what we're seeing is that type of insight into the individual results in more commercialization or higher check as they checkout. Because we're serving a lot of things that they historically have usually added to their ticket. So we're seeing that make great progress. And then, obviously, I think our queso, chips, and guac are pretty darn special. So the more people learn about and experience it, the more they want to add it to their check. Okay, great, thank you. Jack, are you willing to comment just on the levels of price?

Speaker Change: But not protect margin front of the word margins would go down profitability would not or you think a higher price increase and you protect markets as well and we haven't decided within that range you will we'll wait and see what the landscape looks like what the consumer sentiment is what other companies are going to do.

Speaker Change: So I would say in terms of the impact, California represents about 15% of our restaurant so depending on where we end up there probably be an extra 80 ish 90 basis points to maybe.

Speaker Change: Over 100 basis points in terms of additional menu pricing across all of our 3400 restaurants, just to give you a kind of an order of magnitude.

Speaker Change: Thank you.

Speaker Change: Sure.

Speaker Change: The next question comes from John Ivan Co with J P. Morgan. Please go ahead.

Jack Hartung: I guess 1Q maybe looks similar to the fourth quarter, but are you willing to comment on the level of pricing you'll see just factoring in kind of California as we start to think about, you know, perhaps the second quarter? Yeah, 2Q1 will be similar, call it in that 2.5% to 3% range in 2Q1. We haven't made a final decision, you know, in terms of pricing under the FAST Act, but we know we have to take something. It's a significant increase when you talk about a 20%, you know, 20%-ish increase in wages. And I think we talked in the past about one approach where you would cover the profitability, so you would break even from a profitability standpoint but not protect margins. So, in other words, margins would go down, profitability would not, you know, or you could make a higher price increase, and you'd protect margins as well.

Speaker Change: Hi, Thank you I you know I was thinking about you know the amount of time attention labor hours that you spend in morning prep everyday at the store level and you know as you know the system grows gained scale you know potentially benefits from more equipment more technology more automation, maybe some more.

Speaker Change: Centralization I was wondering you know for you to talk about opportunities to maybe reallocate. Some of this prep labor you know that you may have longer term, how big of a bucket is that and you know obviously at Ocado is one identified solution that you know how much more is there and how much more could that mean to the overall business model.

Jack Hartung: We haven't decided within that range, and we'll wait and see just what the landscape looks like, what the consumer sentiment is, and what other companies are going to do. So, I would say in terms of the impact, California represents about 15% of our restaurants. So, depending on where we end up, there'd probably be an extra 80-ish, 90-ish basis points to maybe something over 100 basis points in terms of additional menu prices across, you know, all of our 3,400 restaurants, just to give you kind of an order of magnitude. Okay, thank you. The next question comes from John Ivankoe with J.P. Morgan. Please go ahead.

Speaker Change: The future.

Speaker Change: Yeah.

Speaker Change: Thanks for the question, obviously prep in the mornings and critical piece of the puzzle if we get our prep done correctly, we usually have a great lunch.

Speaker Change: Actually we always had a great lunch when we get the prep done correctly, usually where we run into problems is if were running behind on prep, so things like auto pato other robotics to help honestly.

Speaker Change: The the onions and the Jalapenos. These.

Speaker Change: These things would be huge enablers. That's why you continue to see US look at all these probiotic ideas to make prep even more efficient.

John William Ivankoe: Hi, thank you. You know, I was thinking about the amount of time, attention, and labor hours that you spend on morning prep every day at the store level. And, you know, as the system grows, gains scale, you know, potentially benefits from more equipment, more technology, more automation, maybe some more centralization. I was wondering, you know, for you to, you know, talk about, you know, opportunities to maybe reallocate some of this prep labor that you may have longer term. How big of a bucket is that? And, you know, obviously, AutoCADO is one identified solution that, you know, how much more is there?

Speaker Change: One thing I know for sure is if we could get every restaurant and 100% of the time that they're done on time and ready to roll our throughput will go up.

Speaker Change: So we're going to do everything we can to ensure we are investing in prep.

Speaker Change: More efficiently and then also effectively to get it done.

Speaker Change: You know how you reallocate that time.

We will figure that out as we get closer to it and Thats, probably reasonable reason the stage gate process as we put auto kadow into stores.

Speaker Change:

Speaker Change: We will see how that plays out.

Speaker Change: But you mentioned centralizing kitchens on this that's something we're not contemplating we believe to keep the freshest food the best culinary it needs to happen in the restaurant.

Brian R. Niccol: And how much more could that mean to the overall business model of the future? Yeah, look, thanks for the question. Obviously, preparation in the morning is a critical piece of the puzzle.

Speaker Change: Yeah.

Speaker Change: Okay. The next question comes from Sara Senatore with Bank of America. Please go ahead.

Brian R. Niccol: If we get our prep done correctly, we usually have a great lunch. Actually, we always have a great lunch when we get the prep done correctly. Usually, where we run into problems is if we're running behind on prep. So things like avocados, other robotics to help us, like cut the onions and the jalapenos, these things would be huge enablers.

Sara Harkavy Senatore: Thank you a couple of follow up questions. The first is I wanted to go back to your comment about restaurants as part of that make line going from 30% to 50% is still a long way to go I'm wondering if you can maybe quantify what the contribution to that seven yeah Ah that increase of transaction.

Brian R. Niccol: You know, that's why you continue to see us look at all these crazy ideas to make prep even more efficient. You know, one thing I know for sure is if we could get every restaurant 100% of the time to have their prep done on time and ready to roll, our throughput would go up. So we're going to do everything we can to ensure we're investing in preparation, both more efficiently and then also effectively to get it done. You know, how you reallocate that time, you know; we'll figure that out as we get closer to it.

Sara Harkavy Senatore: Grass, which is to say you know, presumably it's not like every 20 points of staffing improvement gets you seven points of transaction growth, but if you could just maybe rank order or is it is it staffing or are there. Other things that are also going into this and you parallel that perhaps with what you saw in.

Brian R. Niccol: And that's part of the reason why we're using the stage gate process. As we put avocados into stores, you know, we will see how that plays out. But you mentioned centralizing kitchens on this. That's something we're not contemplating.

Sara Harkavy Senatore: And the last decade. When you also saw a real focus on the four pillars that improvement in third place.

Sara Harkavy Senatore: Yeah.

Speaker Change: So great question, Here's what I'll tell you is for sure you Gotta be stabs you got to have stability in the teens right. That's how we get the reps so that we execute better every time.

Brian R. Niccol: We believe to keep the freshest food, the best culinary, it needs to happen in the restaurant. Okay, the next question comes from Sara Senatore with Bank of America. Please go ahead.

Speaker Change: The other thing I'll say is.

Speaker Change: When we looked back and we were doing maybe our best throughput.

Sara Harkavy Senatore: Thank you. A couple of follow-up questions. The first is, I wanted to go back to your comment about restaurants that form the make line going from 30% to 50%. It's still a long way to go.

Speaker Change: These numbers can easily go from 50% to 60 70, some odd percent in execution. So it is not unrealistic for us to believe we can get better than where we are today.

Brian R. Niccol: I'm wondering if you can maybe quantify what the contributions to that seven, you know, that increase in transaction growth are, which is to say, presumably, it's not like every 20 points of staffing improvement gets you seven points of transaction growth. But if you could just maybe rank order, is it staffing, or are there other things that are also going into this? And, you know, parallel that perhaps with what you saw in the last decade when you also saw a real focus on the four pillars of improvement and throughput. Yeah, so that's a great question. Here's what I'll tell you is, for sure, you got to be staffed, you got to have stability in the teams, right? That's how we get the reps so that we execute better every time.

Speaker Change: And I think the teams know that the other thing that I think he is also helping the teams is to have the visibility. So they know how they performed in their 15 minutes allows them to course, correct real time versus finding out what happened that day and then they kind of missed out on being able to course correct for later part of lunch or dinner time.

Speaker Change: You know how it contributes to the comp.

Speaker Change: Here's one thing I'll tell you is we're executing better and we're executing better people feel better about the food they feel better about the brand. We just got back some brand metrics that frankly.

Speaker Change: Just terrific and I think that shows up in our value scores and then it shows up in a way that people are feeling about the brand.

Speaker Change: So the brand has got really strong perceptions.

Brian R. Niccol: The other thing I'll say is, when we looked back, and we were doing maybe our best throughput, you know, these numbers can easily go from 50% to 60, 70, some odd percent in execution. So it's not unrealistic for us to believe we can get better than where we are today. And I think the teams know that. The other thing that I think is also helping the teams is to have visibility. So they know how they performed in their 15 minutes. That allows them to course correct in real time versus finding out what happened that day.

Speaker Change: I think our team members feel really good about the success Theyre, having which is also really important right. When the crude feels like theyre going fast or giving people what they want they feel better I would say I think we're in result turns into like kind of this ongoing system, where everybody believes theyre now achieving in getting what they want so our customers are.

Speaker Change: Happier the team members are happier the brand is stronger and I think these are all the things that contributed to seven points of transaction growth or said another way really strong value proposition that we've got in today's environment.

Brian R. Niccol: And then they kind of missed out on being able to course correct for a later part of lunch or dinner time. You know, how it contributes to the comp, here's one thing I'll tell you is, we're executing better, and when we're executing better, people feel better about the food, they feel better about the brand, you know, we just got back some brand metrics that, frankly, are just terrific, and I think that shows up in our value scores, and then it shows up in the way that people are feeling about the brand, so the brand has got really strong perceptions, I think our team members feel really good about the success they're having, which is also really important, right, when the crew feels like they're going fast, they're giving people what they want, they feel better, which then, I think, in result, turns into, like, kind of this ongoing system where everybody believes, you know, they're now achieving and getting what they want, so our customers are happier, the team members are happier, the brand is stronger, and I think these are all the things that contribute to, you know, seven points of transaction growth, or said another way, really strong value proposition that we've got in today's environment. Got it. Okay, thank you. And then just on the carne asada, I mean, I know in the past, you've gotten questions about, you know, how do you lap a really successful LTO, but here you have it for like the third time, and it was better than you expected. Is that marketing? Is that, you know, digital?

Speaker Change: Got it okay. Thank you and then just on the Carne Asada I mean, I know in the past you've gotten questions about how do you lap I really successful L. T O, but can't you Havent felt like the third time and it was better than you expected is that marketing is that true digital because it actually as a percentage of revenue spent last year over year. So I'm just.

Speaker Change: I can understand you know again, what the runway is there for these already very successful off yes.

Speaker Change: Yeah look I think our teams executed Kearney asada.

Speaker Change: Better than we ever have I thought the <unk>.

Speaker Change: Experience of coronary side it was terrific.

Speaker Change: So do you think the advertising and the communication around it was really good.

Speaker Change: So I think our ads are communicating what makes chipotle special which is this.

Speaker Change: Team member that's committed to doing great culinary in the restaurant.

Speaker Change: And then when you layer in a great product like hernia sounded that gets executed with excellence good things happen and you know it was kind of I think Jack mentioned this earlier, great demand generation with the advertising the carnitas on initiatives and then the folks in our restaurants, we're doing a really terrific execution.

Speaker Change: So that people got down the line faster they experienced great culinary and they've got exactly what they want so.

Sara Harkavy Senatore: Because, you know, you actually spent less as a percentage of revenue year over year. So I'm just trying to understand, you know, again, what the runway is for these already very successful LTOs. Yeah, look, I think our teams executed carne asada, you know, better than we ever have. I thought the experience of carne asada was terrific.

Speaker Change: I think it's the combination of a really havent compelling menu news with great advertising and our operations team executing the fundamentals really well.

Speaker Change: Great. Thank you very much.

Speaker Change: The next question comes from download Guard Julien with Bernstein. Please go ahead.

Brian R. Niccol: I also do think the advertising and the communication around it was really good. So I think our ads are communicating what makes Chipotle special, which is this team member that's committed to doing great food in the restaurant. And then when you layer in a great product like carne asada that gets executed with excellence, good things happen. And, you know, it was kind of, I think Jack mentioned this earlier, great demand generation with the advertising and the carne asada initiative. And then the folks in our restaurants were doing a really terrific execution so that people got down the line faster, they experienced great cuisine, and they got exactly what they wanted. So I think it's the combination of really compelling menu news with great advertising and our operations team executing the fundamentals really well. Great. Thank you very much. The next question comes from Danilo Gargiulio about Bernstein. Please go ahead.

Julien: Thank you.

Julien: Could you provide maybe some color on the key drivers of the traffic comp for Q by income cohorts or maybe by channel and if you can also comment on the year.

Julien: Check how much was the contribution from pricing versus contribution from mix.

Speaker Change: And what's your expectation.

Speaker Change: Given that the delivery mix impact should be normalizing at this point.

Speaker Change: Yeah.

Speaker Change: So look one of the things that we're really delighted to see is every income cohort. We saw sales grow so whether that's below 40000 between 40000 and 100000 over 100000, we all we saw progress with every income cohorts.

Speaker Change:

So clearly the brand is resonating.

Speaker Change: In a meaningful way.

Speaker Change: What was it what was the other part of this question the channels and in store with only far instrument channel, which supports the throughput that we saw in store was the strongest.

Danilo Gargiulio: Thank you. Can you please provide, maybe, some color on the key drivers of the traffic counting for Q by income cohort or maybe by channels? And if you can also comment on the average check, how much was the contribution from pricing versus the contribution from mix? And what's your expectation, given that the delivery mix impact should be normalizing at this point? Yeah, so look, one of the things that we're really delighted to see is that in every income cohort, we saw sales grow. So whether that's below 40,000, between 40,000, 100,000, over 100,000, we all saw progress with every income cohort. So, you know, clearly, the brand is responding in a meaningful way. What was the other part of this question?

Speaker Change: Order ahead. It was next and then deliver it was third.

And you know I think Jack you just mentioned this.

Speaker Change: The in store experience when we had the culinary ready to go and you go down the line, it's tough to be I mean, there is no better experience of walking down the line seeing the rise in chicken that you want and then given one of our team members to look like how about a little more and they do it. So you know that's where you end up with these big bowls and victory and so.

Speaker Change: I think the value proposition is just really strong in store, especially when we're executing great culinary and great speed and that Danielle just on the check.

Speaker Change: The check impact was a 1% plus 1% that's about two 5% price offset by about one and a half on the mix and the mix is driven by group side.

Brian R. Niccol: The channels and in-store were by far the strongest channels, which supports the throughput that we saw. Yeah, in-store was the strongest. Order ahead was next, and then delivery was third. And, you know, I think Jack was mentioning this, the in-store experience when we have the food ready to go and you go down the line. It's tough to beat. I mean, there's no better experience than walking down the line, seeing the rice and chicken that you want and then giving one of our team members a look like, "How about a little more?" And they do it.

Speaker Change: Got it. Thank you and then you recently have significantly improved the benefits and you really are offering a very strong employment value proposition for your increase can you talk about the labor cost and maybe productivity improvement implications that you are expecting from that initiative and will be greatly to can mean.

Speaker Change: The frame, where you are in turnover levels today relative to the rest of the competition in the past casualty industry.

Brian R. Niccol: So, you know, that's how you end up with these big bowls and big burritos. And so I think the value proposition is just really strong in-store, especially when we're executing great cuisine and great speed. And then, Danielle, just on the check. You know, the check impact was one percent plus one percent. That's about two and a half percent price offset by about one and a half percent on the mix, and the mix is driven by group size. I got it.

Speaker Change: Yeah look I appreciate you are taking notice.

Speaker Change: It's really important to us to make sure that we surround our employees with the right the right growth opportunities and the right benefits and I do think some of the things that we've added by being able to help people.

Speaker Change: Or incentivize people to pay off student loans, and then match them with a 401K contribution I think is a really good idea for the generation of people that we're hiring which entities.

Brian R. Niccol: And then you recently significantly improved the benefits, and you really are offering a very strong employment value proposition to your employees. Can you talk about the labor costs and maybe productivity improvement implications that you're expecting from that initiative? And it would be great if you could maybe frame where you are in turnover levels today relative to the rest of the competition in the past casual industry? Yeah, look, I appreciate you taking notice.

Speaker Change: And also the growth opportunity hosting join our company in crew.

Speaker Change: And in three four years quickly find themselves, leading one team and in some cases being a multiunit leader. So I just had the opportunity to meet a young Lady I think she was like 24.

Brian R. Niccol: It's really important to us to make sure that we provide our employees with the right pay, the right growth opportunities, and the right benefits. And I do think some of the things that we've added, like being able to help people or incentivize people to pay off student loans and then match them with a 401k contribution, is a really good idea for the generation of people that we're hiring, the Gen Z. And also the growth opportunity, you know; folks can join our company on the crew and in three, four years quickly find themselves leading one team and, in some cases, being a multi-unit leader. So, you know, I just had the opportunity to meet a young lady, I think she was like 24, a field leader recently promoted. She was at one of our Cultivate University sessions. And you know what? The young lady is very ambitious.

Speaker Change: Field leader newly promoted she was at one of our cultivate University sessions in.

Speaker Change: The young Lady is very ambitious I guarantee it will be a T. D. The next time I see so.

Speaker Change: I'm excited to have these growth opportunities for people surrounding them with great benefits and.

Speaker Change: I think a great culture.

Speaker Change: How does that play out and stability.

Speaker Change: We're seeing some of the best stability, we've seen frankly in my time at Chipotle.

Speaker Change: If you go back and look.

Speaker Change: The fact that we've got general manager turnover in the low twenties crew turnover kind of in the low one hundreds.

Speaker Change: That's really good and relative to the industry I think that's ahead of the industry, but I don't know those numbers for sure.

Speaker Change: But what I do know is we're getting more stability, we're seeing less turnover and what we hear back from people as they loved the purpose they love the culture and they love the growth opportunity and that's where we're going to continue to provide people.

Brian R. Niccol: I guarantee she'll be a TD the next time I see her. So I'm excited to have these growth opportunities for people, surrounding them with great benefits and, you know, I think a great culture. How does that play out in terms of stability? We're seeing some of the best stability we've seen, frankly, in my time at Chipotle. You know, if you go back and look, the fact that we've got general manager turnover in the low 20s, and crew turnover kind of in the low 100s, that's really good. And relative to the industry, I think that's ahead of the industry, but I don't know those numbers for sure. But what I do know is this.

Speaker Change: Thank you.

Speaker Change: The next question comes from Jon Tower with Citigroup. Please go ahead.

Jon Tower: Great. Thanks for taking the question.

Jon Tower: Just Brian you had mentioned earlier the idea that the suggestive selling is starting to work pretty well within the app in terms of getting some incremental attach for orders, but I'm curious if you're doing anything within the stores coaching people up to kind of worked out as well, especially it looks like your digital sales mix, while not slowing.

Brian R. Niccol: We're getting more stability, we're seeing less turnover, and what we hear back from people is that they love the purpose, they love the culture, and they love the growth opportunity, and that's what we're going to continue to provide. Thank you. The next question comes from John Tower with Citigroup. Please go ahead.

Jon Tower: Remarkably it's coming down quite a bit so thinking about kind of a check growth from this point forward are there means for you to be able to encourage greater attach for consumers in the store and is there anything youre doing now.

Speaker Change: No look I think.

Speaker Change: In the restaurant just the simple fact that I think our teams are doing a much better job of having chips and queso and guac all the way until close is making a big impact.

John Tower: Great, thanks for taking the question. I'm just curious, Brian, you mentioned earlier the idea that suggestive selling is starting to work pretty well within the app in terms of getting some incremental attachement for orders. But I'm curious, if you're doing anything within the stores, coaching people up to kind of work that as well, especially because it looks like your digital sales mix, while not slowing remarkably, is coming down quite a bit. So thinking about kind of the check growth from this point forward, you know, are there means for you to be able to encourage greater attachment for consumers in the store? And is there anything you're doing now?

Speaker Change: You know I think we've talked about this six nine months ago.

Speaker Change: You know, we werent as good as we should've been call. It after six seven o'clock at night with being ready to go with chips or guac and queso and now we are and our teams are very aware that they should be.

Speaker Change: Ready to go with those side items and.

Speaker Change: I think as a result, you are seeing more people attach them.

Speaker Change: We are doing anything.

Speaker Change: Out of the ordinary other than making sure we've got great product ready to go and.

Brian R. Niccol: You know, look, I think in the restaurant, just the simple fact that I think our teams are doing a much better job of having chips and queso and guac all the way until close is making a big impact. You know, I think we talked about this six, nine months ago. You know, we weren't as good as we should have been.

Speaker Change: When people know, what's there they order it and what our crew knows they have it they are more willing to say hey, you need chips with disorder.

Seven o'clock eight o'clock at night, you don't have chips, you, usually don't say to somebody do you need chips with that.

Brian R. Niccol: You know, call it after six or seven o'clock at night and be ready to go with chips or guacamole and queso. And now we are. And our teams are very aware that they should be ready to go with those side items. And I think, as a result, you're seeing more people use them. You know, we aren't doing anything out of the ordinary other than making sure we've got a great product ready to go. When people know it's there, they order it, and when our crew knows they have it, they're more willing to say, hey, do you need chips with this order? You know, if it's seven o'clock or eight o'clock at night and you don't have chips, you usually don't say to somebody, "Do you need chips with that?" When you do, it comes pretty natural in the conversation to say, hey, do you need chips to go with that, or do you need queso to go with that?

Speaker Change: When you do it comes pretty natural the conversation to say TV chips to go with that or do you need the case on a go with that so.

Speaker Change: It's really been more focus on executing great culinary available from open to close.

Speaker Change: Got it and then just flipping to delivery a little bit it looks like that might be moving lower as a percentage of sales as well and I'm. Just curious if from your perspective, you're getting any indication from those consumers that this is the way that they're better managing their own spend at the store.

Speaker Change: You know effectively trading that higher cost channel for a lower cost channel going directly to you.

Speaker Change: Actually could you provide the delivery mix as well.

Speaker Change: Yeah, you know look I think intuitively I think the answer is yes, right if you're if you're tighter on money.

Brian R. Niccol: So it's really been more a focus on executing great culinary dishes available from open to close. And then just flip it to delivery a little bit; it looks like that might be moving lower as a percentage of your sales as well, and I'm just curious if, from your perspective, you're getting any indication from those consumers that this is the way that they're better managing their own spend at the store, you know, effectively trading that higher cost channel for a lower cost channel going directly to you. And actually, could you provide the delivery mix as well?

Speaker Change: Most expensive way to experience Chipotle is through delivery.

Speaker Change: So I think <unk>.

Tumors no debt.

Speaker Change: And they manage accordingly, but I will say the delivery channel has been pretty stable.

Speaker Change: For the most part.

Speaker Change: It's in that 14% 15% range for.

Speaker Change: For marketplace, and there's like four 5% for white labels, So you get to like 20% delivery, but.

Brian R. Niccol: Yeah, you know, look, I think intuitively, I think the answer is yes, right? If you're tighter on money, the most expensive way to experience Chipotle is through delivery. You know, so I think consumers know that, and they manage accordingly. But I will say the delivery channel has been pretty stable. For the most part, you know, it's in that 14-15% range for marketplace and then like 4-5% for white label, so you get to like 20% delivery.

Speaker Change:

Speaker Change: It's been pretty stable.

Speaker Change: At the end of the day, though if you need to manage.

Speaker Change: Your money.

Speaker Change: Yep deliveries most expensive access point.

Speaker Change: I was wondering Brian we have is Chipotle Chipotle is one example, where were you when you offer the convenience of Chipotle and the value that chipotle in the customization that chipotle eating.

Speaker Change: Normally we would expect to get you do see that the delivery will drop like 10 points total dropped to the low <unk>.

Brian R. Niccol: But, you know, it's been pretty stable. And, you know, at the end of the day, though, if you need to manage your money, yeah, delivery is the most expensive access point. You know, the one thing we have is Chipotle. Chipotle is one example where when you offer the convenience of Chipotle and then the value that it provides and the customization that you normally would expect to get, you do see that delivery will drop like 10 points.

Speaker Change: Call it 10%, 12% something like that several of the 10 point and then our order ahead and pick up it will move up in the high Twenty's. So to us that's a clear indication that if we offer extreme convenience along with the value that chipotle has that people will choose that axa channel as opposed to delivery.

Speaker Change: Awesome, Thanks for the time.

Speaker Change: The next question comes from Dennis Geiger with UBS. Please go ahead Sir.

Dennis Geiger: Great. Thank you, Brian just wanted to follow up on sort of the strength across income cohorts and the strength in the brand's value scores.

Jack Hartung: So it'll drop to the low, you know, call it 10, 12%, something like that, several to 10 points. And then our order ahead and pickup will move up in the high 20s. So to us, that's a clear indication that if we offer extreme convenience, along with the value that Chipotle has, people will choose that exit channel as opposed to delivery. Thanks for your time. The next question comes from Dennis Geiger with UBS. Please go ahead.

Any other commentary you sort of on how you think that the strength in those value scores, maybe is having an outsized impact perhaps on.

Dennis Geiger: On the customer on traffic that you're seeing particularly in this environment, where you know where we're hearing about some softness in various parts of the consumer cohort any any commentary on that based on data that you guys have relative to those those value scores.

Dennis Geiger: Great, thank you. Brian, I just wanted to follow up on sort of the strength across income cohorts and the strength in the brand's value scores. Any other comments sort of on how you think that the strength in those value scores maybe is having, I don't know, an outsized impact perhaps on the customer, on traffic that you're seeing, particularly in this environment where, you know, we're hearing about some softness in various parts of the consumer cohort? Any commentary on that based on data that you guys have relative to those value scores? Yeah, I mean, look, I think it's the thing we've always talked about, which is relative to, I would say, our peer food offerings, right? So other fast casual folks that have the same or attempt to have the same quality food as us, and we're usually 20 to 30% less expensive.

Dennis Geiger: Yes, I mean look I think it's the things we've always talked about which is relative to I would say our peer food offerings right. So other fast casual folks have had the same our attempt to have the same quality food has us now, we're usually 20% to 30% less expensive and then when you look at some.

Dennis Geiger: These other categories were.

Dennis Geiger: You traditionally view them as more value and convenience.

Dennis Geiger: The price Delta that you have to pay in order to get our quality, our convenience or customization.

Dennis Geiger: And then when you look at some of these other categories where, you know, you traditionally view them as more value and convenience, you know, the price delta that you have to pay in order to get our quality, our convenience, our customization, you know, it's not that big of a leap up. So I think that's why we're positioned really well. You know, if you want to move up, it's not a crazy leap.

Dennis Geiger: Not that big of a leap up.

Dennis Geiger: So I think that's why we're positioned really well you know if you want to move up it's not a crazy leap up and then when you look across our we're at a nice value relative to alternatives.

Dennis Geiger: So I think that's why our value scores are as strong as they are in.

Dennis Geiger: Very fortunate that we've been able to maintain that through the last couple of years.

Brian R. Niccol: And then when you look across, we're at a nice value relative to alternatives. So, you know, I think that's why our value scores are as strong as they are. And, you know, we're very fortunate that we've been able to maintain that through, you know, the last couple years. And, you know, look, that's why we're maybe a little bit slower sometimes to take price, but when we took it, we thought it was because now the time was right, inflation warranted doing it, but we've always wanted to do it from the standpoint of protecting our value proposition.

Dennis Geiger: And look that's why we were maybe.

Dennis Geiger: A little bit slower sometimes to take price, but when we took it we thought it was because now at the time was right inflation warranted doing it but.

But we've always wanted to do it from the standpoint of protecting our value proposition.

Dennis Geiger: We've navigated that pretty well at least where we are right now. So we will see what is in store for us, but I think we've talked about this all the time.

Brian R. Niccol: I think we've navigated that one pretty well, at least where we are right now. So we'll see what is in store for us. But I think we've talked about this all the time.

Dennis Geiger: Maintaining that value is a really important piece of the puzzle for us.

Dennis Geiger: I just love the fact that we've got quality, we've got value and we've got speed and we've got customization will protect all those things and I think we're going to continue to do very well in regardless what the environment is.

Brian R. Niccol: Maintaining that value is a really important piece of the puzzle for us. I just love the fact that we've got quality, we've got value, and we've got speed, and we've got customization. We'll protect all those things, and I think we're going to continue to do very well, regardless of what the environment is. That's great, thank you.

Speaker Change: That's great. Thank you and then just quick Jack anything more on mix on kind of looking ahead to 'twenty four or even at all at a high level how to think about the mixed component of the check in and how that how that might trend. Thank you.

Brian Bittner: And then just quick, Jack, anything more on mix, on kind of looking ahead to 24, even at a high level, how to think about the mix component of the check and how that might trend? Yeah, you know, hard to predict because we're in kind of uncharted territory here, but I would expect to see a similar kind of mix going forward, and the pricing I already talked about what the pricing will be. And I still think there's going to be continued adjustment to the group side for the next several quarters. I would expect it to, you know, just ratchet down. It's been ratcheting down over the last several quarters. So I'd expect it to ratchet down from the 150.

Jack Hartung: Yeah, you know hard to predict because we're in kind of uncharted territory here.

Jack Hartung: I would expect to see a similar kind of mix going forward that the pricing I already talked about what the pricing will be and I still think there's going to be a continued adjustment to the group side for the next several quarters I would expect it to just ratchet down its been ratcheting down over the last several quarters. So I'd expect it to ratchet down from the $1 50, but hard to predict I don't know exact.

Jack Hartung: Like what quarter will be like at base and that we won't be seeing the group size decline at all but it's down to I think a very manageable amount.

Jack Hartung: At this $1 50, I think the fact that it is combined with a seven 4% transaction growth and got very modest pricing. We think it's a really healthy balance right now.

Brian Bittner: But hard to predict; I don't know exactly what the quarter will be like at base and that we won't be seeing the group size decline at all. But it's down to, I think, a very manageable amount. You know, this 150, I think the fact that, you know, it's combined with 7.4% transaction growth and has very modest pricing, we think it's a really, you know, healthy balance right now.

Great. Thanks, guys.

Jack Hartung: The next question comes from Brian Bittner with Oppenheimer and company. Please go ahead.

Jack Hartung: Hum.

Brian Bittner: On Chipotle I mean, you have over 800 Chipotle in your portfolio now I think he built a record 238 of these in 2023. So the prototype is really starting to gain some scale here and so now your learnings are so much deeper on these assets. So can you just update us on maybe the margin pro.

Jack Hartung: Thanks, guys. The next question comes from Brian Bittner with Oppenheimer and Company. Please go ahead.

Brian Bittner: Thanks. On Chipotle, I mean, you have over 800 Chipotles in your portfolio now. I think you built a record 238 of these in 2023. So the prototype is really starting to gain some scale here. And so now your learnings are so much deeper on these assets.

Brian Bittner: <unk> now of the Chipotle and portfolio maybe versus the rest of the system and are we at a point, where there's enough chipotle and enough being built in the future where you know as they continue to increase as a percentage of the business that they can actually have an impact on the overall company's restaurant margin.

Jack Hartung: So can you just update us on maybe the margin profile now of the Chipotle portfolio, maybe versus the rest of the system? And are we at a point where there are enough Chipotles and enough being built in the future where, you know, as they continue to increase as a percentage of the business, they can actually have an impact on the overall company's restaurant margin? Well, they're already having that impact, but to your point, it's relatively small because 800 is still, what is that, maybe a quarter of our system, but it's hundreds of basis points of higher margin if you compare it to our non-Chipotle business. The volumes have actually come pretty close.

Brian Bittner: Whether they're already having that impact but to your point, it's relatively small because they 800 is still what does that maybe maybe a quarter of our system, but it's hundreds of basis points of higher margin. If you compare it to our non chipotle and the volumes have actually come pretty close were still a little bit higher than chipotle versus non chipotle.

Brian Bittner: They closed the gap a little bit it was much much higher during the pandemic, but when you combine volumes that are a little bit higher with margins that are hundreds of basis points higher and the investment costs are virtually identical it's a much higher return so from a shareholder value standpoint, as we open up as we grow from the 3400 towards 7000.

Jack Hartung: They're still a little bit higher, the Chipotle versus non-Chipotle. They've closed the gap a little bit. But it was much, much higher during the pandemic.

Jack Hartung: But when you combine volumes that are a little bit higher with margins that are hundreds of base points higher, and the investment costs are virtually identical, it's a much higher return. So, from a shareholder value standpoint, as we open up, as we grow from the 3400 towards 7000, the cash on cash returns we're getting from the 80 or 85% of our new restaurants that have Chipotle are much, much, much higher. So, it does have an accretive impact on our margin. It has an even more meaningful accretive impact on our return, and you'll just see it every time we open up new restaurants. You'll see that our margins are going to continue to expand as long as our existing comp transactions grow, and these new restaurants coming on board are just going to add fuel to the fire. Thanks for that.

Brian Bittner: <unk> cash on cash returns, we're getting from the 80 or 85% of our new restaurants have chipotle is much much much higher so it does have a.

Brian Bittner: An accretive impact on our margin it has a even more meaningful accretive impact on our returns and Youll just see it every time, we open up new restaurants, you will see that our margins are going to they're going to continue to expand as long as our existing comp transactions grow and these new restaurants coming on board or just going to add fuel to the fire.

Brian Bittner: Yeah.

Speaker Change: Okay. Thanks for that and just a follow up on labor margins in the fourth quarter.

Speaker Change: Labor margins ended up being much better than than you had guided to originally so I'm curious what positively surprised you on that line item was it just the higher sales in.

Speaker Change: And the flow through from that end and then as we look towards once you you are guiding to some deleverage on the labor line year over year is that is that mostly just driven by the softer January.

Jack Hartung: And just a follow-up on labor margins. In the fourth quarter, your labor margins ended up being much better than you had guided them to originally. So I'm curious what positively surprised you on that line item.

Speaker Change: Or is labor leverage is going to be much more challenging this year as we move forward.

Jack Hartung: Was it just the higher sales and the flow-through from that? And then, as we look towards 1Q, you are guiding to some deleverage on the labor line year over year. Is that mostly just driven by the softer January? Or is labor leverage just going to be much more challenging this year as we move forward? Yeah, no, really the thing that happens when you turn the calendar is you have taxes because you have people that are hitting tax levels.

Speaker Change: Yeah, no. It really the thing that happens when you turn the calendar you you have taxes, because you have people that are hitting tax levels.

You kind of kind of resetting this happens every year, where our tax in Q4.

Speaker Change: Lower then they step up in Q1, so that's the only deleverage that you're seeing the leverage that we saw in the fourth quarter is a couple of things one when our volumes do when I cover our comps accelerate we do leverage that line as we saw leverage on that line to the ops teams did a good job of managing labor and then the third thing is our teams did a better job.

Jack Hartung: So you kind of reset. This happens every year where our taxes in Q4 are lower than they are in Q1. So that's the only deleverage that you're seeing. The leverage that we saw in the fourth quarter is a couple of things. One, when our volumes do, when our comps accelerate, we do leverage. That line, as we saw leverage on that line.

Speaker Change: Of managing through dealing with like sick time, and vacation time at the end of the year that was a little bit of a negative surprise to us or the year before and our teams did a much better job. This year of just getting ahead of that so those are the three contributors, but you you should expect that as we grow transactions next year as long as wage inflation stays relatively benign we should still continue to be.

Jack Hartung: Two, the operations teams did a good job of managing labor. And then the third thing is that our teams did a better job of managing through dealing with sick time and vacation time at the end of the year. That was a little bit of a negative surprise to us the year before.

Jack Hartung: And our teams did a much better job this year of just getting ahead of that. So those are the three contributors. But you should expect that as we grow transactions next year, as long as wage inflation stays relatively benign, we should still continue to be able to... lever the labor... Thanks. And the last questioner today will be... Sharon Zackfia with William Blair. Please go ahead.

Speaker Change: Well to that.

Speaker Change: The leverage that labor line.

Speaker Change: Thanks.

Sure Andrew.

Speaker Change: Last questioner today will be Sharon Zackfia with William Blair. Please go ahead.

Sharon Zackfia: Hi, just under the wire.

Sharon Zackfia: I guess I wanted to talk about how your most loyal customers are using chipotle at this point, maybe if there is.

Sharon Zackfia: Hi, just under the wire. I guess I wanted to talk about how your most loyal customers are using Chipotle at this point, maybe if there's a way to contrast the frequency of those customers versus five years ago when rewards even, you know, didn't exist or were very nascent. And then by the same token, we kind of talk about how new customers today are entering the Chipotle ecosystem and how they progress in frequency, maybe relative to what you would have seen pre-pandemic. Yeah, well, the one thing that definitely is clear is that if you're in the rewards program, you have higher frequency and higher check.

Sharon Zackfia: And way to contrast, the frequency of those customers versus five years ago, when rewards even didn't make sense or was very nascent.

Sharon Zackfia: And then by the same token we kind of talk about how new customers today are entering that chipotle ecosystem and how they are progressing frequency maybe relative to what you would've seen pre pandemic.

Sharon Zackfia: Yeah.

Sharon Zackfia: The one thing that definitely is clear is if youre in the rewards program, you have higher frequency and higher check.

Brian R. Niccol: And so obviously, one of the things we're trying to do is both existing customers and new customers continue to drive engagement within our rewards program. And so that continues to work really well. I think we're now like 38 million or almost 40 million people in the program. So that is really powerful. And, you know, we didn't have that five, six, well, I guess seven years ago, we didn't have that.

And so obviously one of the things we're trying to do is both existing customers and new customers continue to drive engagement within our rewards program.

Sharon Zackfia: And so that continues to work really well I think we're now like 38 million or almost $40 million.

Sharon Zackfia: People in the program.

Sharon Zackfia: So that is really powerful.

Sharon Zackfia: We didn't have that 567 years ago, we didn't have that.

Brian R. Niccol: And then when you think about pre-pandemic, one of the things that was kind of interesting is that the pandemic kind of helped us move people into the digital system and get them going in the rewards program. So, over and over again, what we see is whether you're a light, medium, or heavy user, when you're in the rewards program, you come more frequently, and you spend more. And so it's a really powerful tool, and even when people are redeeming entrees, what we're seeing is that they're still buying sides. They're still adding other items.

Sharon Zackfia: And then when you think about pre pandemic one of the things that was kind of interesting is the pandemic kind of helped us move people into the digital system and get them going in the rewards program. So.

Sharon Zackfia: Over and over again, what we see is whether you're a light medium or heavy user when you're in the rewards program you come more frequently and spend more.

Sharon Zackfia: And so it's a really powerful tool and even when people are redeeming entrees. What we're seeing is they are still buying sites theres still adding other items. So it's not just one of these things were.

Brian R. Niccol: So it's not just one of these things where when you accumulate a free entree, you just show up and walk away with a free entree. You know, we're feeling really good about how the rewards program is working with all these different, I guess, frequent users. And then obviously, as we continue to, I think, drive the Chipotle message, we're continuing to attract new users. I don't know if you've seen the ads, Sharon, but I think some of the advertising we're running right now is the best we've ever done. And I think that's also helping to bring in new users. And then these new users are experiencing what I think is a great experience, you know, great cuisine, great throughput, great customization. So we've kind of got the system. It's still early days, but I think it could be better, but the system's working. You know, we'll probably never be finished working against making everything better, but the system seems to be working. Can I ask a follow-up question on LTOs?

Sharon Zackfia: When you accrue a free Entre you just show up and walk away with free Entre so.

Sharon Zackfia: Yeah.

Sharon Zackfia: We're feeling really good about how the rewards program is working with all these different.

Sharon Zackfia: I guess frequency users and then obviously as we continue to.

Sharon Zackfia: Drive the Chipotle message, we're continuing to attract new users.

Sharon Zackfia: You've seen the ads Sharon, but I think some of the advertiser run rate now is the best we've done and I think that's also helping to bring in new users.

Sharon Zackfia: And then eastern users are experiencing what I think is a great experience great culinary great throughput great customization. So we've kind of got the system.

Sharon Zackfia: Still early days I think it could be better but the system is working.

Sharon Zackfia: So we will probably never be finished working against making everything better but the system seems to be working right now.

Speaker Change: Can I ask a follow up on LTE M Studios overarch towards kind of improve in existing customer frequency or are they a real driver of new customers coming into chipotle.

Sharon Zackfia: Do those overarch towards kind of improving existing customer frequency, or are they a real driver of new customers coming into Chipotle? You know, they've actually been a really good driver of new customers. So, you know, and that's one of the things we look for when we do our testing is how well they are at bringing in new customers. And they've been a really nice tool to bring in new customers. And unfortunately, even when we have the LTO walk away, people are really hooked on the experience that being culinary. That quality, the convenience, the speed, the customization. So it's been a really good tool. Okay, thank you.

Speaker Change: You know they've actually been a really good driver of new customers.

Speaker Change: <unk>.

Speaker Change: And that's one of the things we look for when we do our testing.

Speaker Change: Is how well are they at bringing in new customers.

Speaker Change: And they've been a really nice tool to bring in new customers and unfortunately, even when we had the L. T O walk away people are really hooked on the experience that being culinary right.

Speaker Change: Quality the convenience the speed the customization so it's been a really good tool.

Speaker Change: Okay. Thank you.

Brian R. Niccol: Yep, thank you. This concludes our question and answer session. I would like to turn the conference back over to Brian Niccol for any closing comments. All right, thank you, and thanks, everybody, for joining the call and the questions. I do want to start off by, again, thanking our 115,000 team members. We had an outstanding 2023, and without a doubt, it was because we led with, I think, a much better performance in the restaurants. And this is a real testament to our employees, you know, staying focused, getting after the basics, and working towards hitting our standards.

Speaker Change: Yes. Thank you.

Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Brian Nichols for any closing comments.

Brian R. Niccol: Alright, Thank you and thanks, everybody for joining the call and the questions I do want to start off with again thanking our 115000 team.

Brian R. Niccol: Team members.

Brian R. Niccol: We had an outstanding 2023 and without a doubt it was because we lead with I think much better performance in the restaurants and this is a real testament to our employees staying focused getting after the basics and working towards hitting our standards.

Brian R. Niccol: So, we had some really big milestones, right? We surpassed 3,400 restaurants. We opened 800 Chipotle lanes, and we got past 3 million in average unit volumes. And now we're really excited about where we go next on this journey, which is that we will be even better at throughput. We will be even faster. We'll be even better in the culinary department, and I think that's gonna result in us achieving this 4 million average unit volume in our 7,000 restaurants in the future.

Brian R. Niccol: So we had some really big milestones right. We surpassed 3400 restaurants, we opened 800, Chipotle and we got past 3 million average unit volumes.

Brian R. Niccol: And now we're really excited about where we go next on this journey, which is will be even better throughput will be even faster.

Brian R. Niccol: Faster will be even better on the culinary and I think that's going to result in us achieving this 4 million average unit volumes in our 7000 restaurants in the future. So again, a big thank you to our team and.

Brian R. Niccol: So, again, a big thank you to our team. And, you know, obviously, we're excited about what's next. So we'll talk to you all here in the next couple of months. Thanks. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. BF-WATCH TV 2021 BF-WATCH TV 2021 BF-WATCH TV 2021

Speaker Change: Obviously, we're excited about what's next and we'll talk to you all here in next couple of months. Thanks.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Speaker Change: Okay.

Speaker Change: [music].

Q4 2023 Chipotle Mexican Grill Inc Earnings Call

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