Chipotle announced Tuesday a 50-for-one stock split, which would be one of the biggest in New York Stock Exchange history.
The move makes it easier for others to invest in the company. As of Tuesday’s stock market close, it cost $2,797.56 to own one share of Chipotle. But with the stock split, each share that one person owns will be split into 50 smaller ones. If it occurred today, the price would lower to around $56 per share.
The move has board approval and will be voted on by shareholders on June 6. If the measure passes, Chipotle’s shares will begin trading on a post-split basis on June 26.
“This is the first stock split in Chipotle’s 30-year history, and we believe this will make our stock more accessible to employees as well as a broader range of investors,” CFO Jack Hartung said in a statement. “This split comes at a time when our stock is experiencing an all-time high driven by record revenues, profits, and growth.”
In conjunction with the news, Chipotle unveiled a one-time equity grant for all restaurant GMs and employees with 20-plus years of service.
Chipotle is one of the highest-performing chains in the quick-service segment, even during a time when most concepts are experiencing a choppy economic environment. In the fourth quarter, same-store sales rose 8.4 percent, backed by a 7.4 percent increase in transactions, which accelerated from mid-single digits in October and more than 4 percent in Q3. CEO Brian Niccol said growth stemmed from all income demographics, including the lower-level threshold that’s proven so elusive recently for peers. For full-year 2023, comps lifted 7.9 percent, driven by 5 percent transaction growth.
Restaurant level operating margin was 25.4 percent in Q4, an increase of 140 basis points. On the year, it was 26.2 percent, an improvement of 230 basis points year-over-year.
The brand also opened a record 271 new stores in 2023, bringing its year-end total to 3,437. Of the 271 new restaurants, 238 locations included a Chipotlane, further boosting the company’s digital prowess. This year, Chipotle projects 285 to 315 new openings, which would reset the record. All the growth news wasn’t restricted to North America. In October, it announced the signing of its first development agreement in brand history to open stores in the Middle East. It will work with international franchise retail operator Alshaya Group to initially open new units in Dubai and Kuwait this year before expanding further across the region.
In terms of unit economics, the chain surpassed $3 million AUV in 2023 and is well on its way toward a long-term goal of $4 million and 7,000 restaurants throughout North America.
Chipotle’s IPO came in 2006, spinning off from McDonald’s. It was priced at $22 per share, but doubled to $44 per share by the end of the day. At that point, it was the best opening-day gain of any U.S.-based IPO in six years and the second-highest opening by any restaurant chain, following Boston Chicken in 1993.
