Chipotle’s anticipated 50-for-1 stock split went into effect after market close Tuesday, with its shares starting to trade on a post-split basis this morning.
Shareholders of record, as of June 18, received 49 additional shares for each share held. To commemorate, Chipotle offered a one-time equity grant to all restaurant general managers as well as crew members with more than 20 years of service. A Chipotle spokesperson told Yahoo Finance about 4,000 employees would receive the grant, which will vest over three years.
Also, domestic employees who have been with the company for a year are now eligible to enroll in an Employee Stock Purchase Plan that enables them to purchase shares at a discount. They’re also able to use between 1 and 15 percent of their compensation to help buy the stock.
“Today we celebrate the remarkable achievements of our employees by increasing ownership accessibility for team members and new investors,” Brian Niccol, chairman and CEO, said in a statement. “We’re excited for our employee shareholders to participate in our company’s financial success as they help further our mission to Cultivate a Better World.”
READ MORE: Chipotle’s Hourly Turnover Dropped 10 Percent in 2023
The change brought Chipotle’s per-share price from $3,128.08 at the close of Tuesday to $65.66. It was up to 65.90 pre-market.
The split is one of the largest in the history of the New York Stock Exchange. The company in Q1 told investors the move would make shares more accessible to employees as well as investors.
According to Yahoo Finance, Chipotle’s pre-split trading figure was the third-highest-priced offering in the S&P 500 after NVR, INC. and Booking Holdings. Yet $65 is still higher than when Chipotle went public in 2006 following its split from McDonald’s, when it hit the market at $22 per share. It did, however, double to $44 per share by the end of that 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.
As of Tuesday, Chipotle’s shared had climbed 43 percent year-to-date. Notably, this run has been a multi-year surge from its 2015 food-safety crisis depths—it had dipped below $300 in October 2017, the first since March 2013. Niccol, a former Taco Bell exec, joined the brand in March 2018 and the arrow flipped in a hurry.
The brand has been among the industry’s top performers throughout recent months. Its fiscal 2024 started with same-store sales growth of 7 percent as total revenue lifted 14.1 percent to $2.7 billion. But the flashing metric was higher transaction growth of 5.4 percent, year-over-year during a time when the vast majority of chains are struggling to drive transactions amid price hikes.
Average check lifted 1.6 percent at Chipotle in the quarter as pricing was 2.8 percent or so. Thanks to stores in California taking a 6–7 percent hike to counter the $20 wage mandate, Q2 and Q3 should be in the 3.5 percent range, with Q4 closer to 1.5 percent as the brand laps last year’s lift.
