Biggest Ever Stock Splits, 49 New Shares On Existing 1 Share; FMCG Makes Big Announcement Before Splitting

FMCG giant, Chipotle before carrying the biggest stock splits in the history of NYSE, has announced its first quarterly earnings for 2024. The company's comparable sales increased by 7% driven by 5% transaction growth as margins expanded during January to March 2024 quarter. Chipotle will split into the ratio of 50:1 during the Q2 of 2024. The stock split ratio will lead up to 49 new shares on the existing 1 equity share.

Chipotle's Earnings:

As per the press release, the company's total revenue in the first quarter was $2.7 billion, an increase of 14.1% compared to the first quarter of 2023. The increase in total revenue was driven by new restaurant openings and a 7.0% increase in comparable restaurant sales due to higher transactions of 5.4% and a 1.6% increase in average checks. Digital sales represented 36.5% of total food and beverage revenue.

Meanwhile, net income for the first quarter was $359.3 million, or $13.01 per diluted share, compared to $291.6 million, or $10.50 per diluted share in the first quarter of 2023. In the first quarter of 2024, excluding the $0.36 after-tax impact from an increase in legal reserves, adjusted net income was $369.3 million1 and adjusted diluted earnings per share was $13.371.

Chipotle said that they opened 47 new restaurants during the first quarter with 43 locations including a Chipotle. These formats continue to perform well and are helping enhance guest access and convenience, as well as increase new restaurant sales, margins, and returns.

Brian Niccol, Chairman and CEO, of Chipotle, said, "We had another outstanding quarter driven by our improvement in throughput and successful marketing initiatives, including Braised Beef Barbacoa and Chicken Al Pastor, which drove strong sales and transactions. The results we are seeing from our focus on developing exceptional people, preparing delicious food and fast throughput gives me confidence that we can achieve our long-term target of more than doubling our business in North America and expanding internationally."

Further, Chipotle gave an outlook for the year. Full-year comparable restaurant sales growth is expected to be in the mid to high-single-digit range. The company anticipates 285 to 315 new restaurant openings with over 80% having a Chipotle. Lastly, it has an estimated underlying effective full-year tax rate between 25% and 27% before discrete items.

Listed on NYSE, Chipotle is cultivating a better world by serving responsibly sourced, classically-cooked, real food with wholesome ingredients without artificial colours, flavours or preservatives. Chipotle had nearly 3,500 restaurants as of March 31, 2024, in the United States, Canada, the United Kingdom, France and Germany and is the only restaurant company of its size that owns and operates all its restaurants in North America and Europe.

Biggest Ever Stock Split:

Chipotle has announced its first stock split in 30 years. The reason behind its decision to stock split is that Chipotle is experiencing an all-time high driven by record revenues, profits, and growth.

After three decades of no stock splits, Chipotle announced the biggest-ever sub-division on the NYSE. It is in the ratio of 50:1, which means, you get 49 new shares on every 1 existing share you hold, totalling your portfolio to 50 shares.

On an upcoming stock split, Jack Hartung, Chief Financial and Administrative Officer, Chipotle earlier said, 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."

Hartung also added that this split comes at a time when the company's stock is experiencing an all-time high driven by record revenues, profits, and growth

In a statement, Chipotle mentioned that the Certificate of Incorporation amendment is approved, shareholders of record as of June 18, 2024, will receive 49 additional shares for each share held, which will be distributed after market close on June 25, 2024. Chipotle's shares are expected to begin trading on a post-split basis at the market open on Wednesday, June 26, 2024.

Also, to commemorate this special event and in recognition of the Company's strong performance, Chipotle announced a special one-time equity grant for all restaurant general managers as well as crew members with more than 20 years of service.