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CHIPOTLE MEXICAN GRILL, INC. (NYSE:CMG) Files An 8-K Results of Operations and Financial Condition

CHIPOTLE MEXICAN GRILL, INC. (NYSE:CMG) Files An 8-K Results of Operations and Financial Condition

Item2.02.Results of Operations and Financial Condition.

The disclosures under the headings Fourth Quarter 2016
Preliminary Results, Fourth Quarter 2016 Sales Trend Detail, and
Fourth Quarter 2016 Operating Margin and Net Income in Item 8.01.
below are incorporated by reference into this Item 2.02.

Item8.01.Other Events.

Chipotle Mexican Grill, Inc. is filing this report to provide
preliminary financial and operating results for the fourth
quarter 2016, as well as other recent developments.

Fourth Quarter 2016 Preliminary Results

For the fourth quarter 2016, we anticipate the following:

Sales revenue of $1.035 billion

Comparable restaurant sales decrease of 4.8%

Restaurant level operating margin to be approximately 13%
to 14%

Pre-tax operating income to be approximately $30 million
to $32 million

Quarterly tax rate of 47% to 53%; full year effective tax
rate of 39% to 45%

Diluted earnings per share in the range of approximately
$0.50 to $0.58

Fourth Quarter 2016 Sales Trend Detail

Comparable restaurant sales for the quarter decreased 4.8%, which
includes the benefit of 0.5% related to previously deferred
revenue that was recognized in the fourth quarter. Comparable
restaurant sales decreased 20.2% in October 2016, decreased 1.4%
in November 2016, and increased 14.7% in December 2016. Our sales
comparisons are lapping an easier compare due to lower sales
levels in November and December 2015.

Fourth Quarter 2016 Operating Margin and Net Income

We anticipate our restaurant-level operating margin for the
fourth quarter 2016 to be in the 13% to 14% range. And we also
expect pre-tax operating income of approximately $30 million to
$32 million. During the quarter we incurred higher expenses
compared to our originally-forecasted amounts in other operating
costs, driven by increased promotional spend and costs related to
testing television advertising. Our marketing and promotional
expenses during the quarter totaled approximately 4.7% of sales.
We also incurred higher food costs compared to our
originally-forecasted amounts as a result of increased market
costs for avocados.

We anticipate reporting diluted earnings per share of $0.50 to
$0.58 per share. Final year-end accounting adjustments and
related tax expenses may impact these estimates. We anticipate a
higher annual effective tax rate for the full year 2016 of 39% to
45% due to higher state tax rates, not qualifying for the federal
RD tax credits in 2016, and non-deductible items on overall lower
pre-tax operating income. The increase in our full year estimated
tax rate has a magnified effect on our tax rate in the fourth
quarter. We expect the 2017 effective tax rate to be lower than
the 2016 effective tax rate.

Additional Stock Repurchase Authorization

This report is also filed to announce that Chipotles Board of
Directors has authorized repurchases of Chipotle common stock
with a total aggregate purchase price of $100 million, exclusive
of commissions. This repurchase is in addition to previously
announced repurchase authorizations totaling $2.1 billion. As of
January 10, 2017, the current remaining authorization is $200.0
million. The Boards authorization of the repurchase program may
be modified,suspended or discontinued at any time.

Forward-Looking Statements

Certain statements in this filing, including statements of
expected comparable restaurant sales,certain expense items,
restaurant-level operating margins, estimated tax rates and
earnings per share results,are forward-looking statements as
defined in the Private Securities Litigation Reform Act of 1995.
We use words such as anticipate, believe, could, should,
estimate, expect, intend, may, predict, project, target, and
similar terms and phrases, including references to assumptions,
to identify forward-looking statements. The forward-looking
statements in this filing are based on information available to
us as of the date any such statements are made and we assume no
obligation to update these forward-looking statements. These
statements are subject to risks and uncertainties that could
cause actual results to differ materially from those described in
the statements. These risks and uncertainties include, but are
not limited to, the following: the uncertainty of our ability to
achieve expected levels of comparable restaurant sales due to
factors such as changing consumer perceptions of our brand,
including as a result of food-borne illness incidents, the impact
of competition, including from sources outside the restaurant
industry, decreased overall consumer spending, or

our possible inability to increase menu prices or realize the
benefits of menu price increases; factors that could affect our
ability to achieve and manage our planned expansion, such as the
availability of a sufficient number of suitable new restaurant
sites and the availability of qualified employees; the
performance of new restaurants and their impact on existing
restaurant sales; the risk of food-borne illnesses and other
health concerns about our food or dining out generally; increases
in the cost of food ingredients and other key supplies, or higher
food costs due to new supply chain protocols; the potential for
increased labor costs or difficulty retaining qualified
employees, including as a result of market pressures, enhanced
food safety procedures in our restaurants, or new regulatory
requirements; risks relating to our expansion into new markets;
the impact of federal, state or local government regulations
relating to our employees, our restaurant design, or the sale of
food or alcoholic beverages; risks associated with our Food With
Integrity strategy, including supply shortages and potential
liabilities from advertising claims and other marketing
activities related to Food With Integrity; security risks
associated with the acceptance of electronic payment cards or
electronic storage and processing of confidential customer or
employee information; risks relating to litigation, including
possible governmental actions related to food-borne illness
incidents, as well as class action litigation regarding
employment laws, advertising claims or other matters; risks
relating to our insurance coverage and self-insurance; risks
arising from senior management changes, including our return to
having a single CEO, as well as our dependence on key personnel;
risks related to our marketing and advertising strategies,
including risks related to our Chiptopia rewards program and
other promotional activities; risks regarding our ability to
protect our brand and reputation; risks associated with our
ability to effectively manage our growth; and other risk factors
described from time to time in our SEC reports, including our
most recent annual report on Form 10-K and subsequent quarterly
reports on Form 10-Q, all of which are available on our website
at chipotle.com.

About CHIPOTLE MEXICAN GRILL, INC. (NYSE:CMG)
Chipotle Mexican Grill, Inc., together with its subsidiaries operates Chipotle Mexican Grill restaurants. The Company’s Chipotle Mexican Grill restaurants serve a menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads. The Company operates approximately 1,970 Chipotle restaurants throughout the United States, over 10 in Canada, seven in England, four in France and one in Germany. The Company’s restaurants include over 10 ShopHouse Southeast Asian Kitchen restaurants, serving Asian-inspired cuisine. The Company owned and operated approximately three Pizzeria Locale restaurants, a fast casual pizza concept, resulting in a totaling of approximately 2,010 restaurants. The Company sells gift cards which do not have an expiration date. CHIPOTLE MEXICAN GRILL, INC. (NYSE:CMG) Recent Trading Information
CHIPOTLE MEXICAN GRILL, INC. (NYSE:CMG) closed its last trading session down -0.21 at 395.06 with 793,405 shares trading hands.

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