Chipotle Announces Strategic Initiatives To Boost Growth
Zacks Investment Research | Jun 27, 2018 11:04PM ET
In a bid to accelerate growth and drive its shareholder value, Chipotle Mexican Grill, Inc. (NYSE:CMG) announced strategic initiatives. The company will not only shut down 65 underperforming restaurants but has also laid down few plans to drive sales.
Moreover, it plans to focus on digitization and modernization of the restaurant for enhancing customer experience. Brian Niccol, chief executive officer of Chipotle said “We believe our digital business has a long runway for growth and ultimately can be a multi-billion-dollar business.” The company will also launch a long-awaited loyalty program in 2019 to attract more customers.
Additionally, Chipotle will consolidate its employee in two office locations and recruit experienced talents in major areas like marketing, CRM, menu innovation, digital, data analytics as well as human resources. Niccol also stated that “I can easily see a future where Chipotle more than doubles the business to $10 billion in revenue.”
We believe these strategic initiatives will result in non-recurring charges not only in the second quarter of 2018 but also over the next several quarters. Total costs from restructuring are likely to be in the range of $115-$135 million.
Currently, this Zacks Rank #3 (Hold) company is prioritizing its e-Commerce program to regain customer confidence as a part of its digital innovation. Chipotle is aggressively trying to make digital ordering more appealing and efficient for its restaurants, in order to drive digital sales and regain customers. To this end, the company has redesigned and simplified its online ordering site, enabled online payment for catering, online meal customizations and collaborated with several well-known third-party providers for delivery.
Impressive Price Performance
In the past six months, Chipotle’s shares have gained 58.8% against the Zacks Investment Research
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