Based on third-quarter results to date, the impact of the weakened economy has been greater than anticipated resulting in further sales deceleration leading to comparable restaurant sales in the low single digits for the third quarter of 2008. The combination of a weak economy as well as food costs rising faster than expected during the quarter will result in the company’s diluted earnings per share for the third quarter of 2008 being slightly below third quarter 2007. Chipotle is working on national pricing plans for the fourth quarter of 2008 to offset rapidly rising food costs. Specific details regarding its overall pricing strategy will be addressed on the October earnings conference call.
"Our preliminary view of the third quarter reflects a further deceleration in comparable restaurant sales combined with continued increases in food costs. We attribute current trends to the same macro-economic pressures that have affected other restaurant companies,” says Chipotle Founder, Chairman, and CEO Steve Ells.
Management expects the following for the full-year 2008:
* Comparable restaurant sales increase in the mid to low single digits
* 130 – 140 new restaurant openings
* Non-cash stock compensation expense of approximately $12.5 to $13.0 million
* An effective tax rate of approximately 38 percent
* Diluted weighted average common shares outstanding of approximately 33.4 million
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