What the changes say
- Chipotle added macro and stock volatility risks, updated its international expansion figures, and adjusted third-party delivery metrics.
What changed since the prior 10-K
New
- NewRisks Related to Macroeconomic Conditions
Our financial condition and results of operations have been, and may continue to be, adversely affected by a number of macroeconomic and other factors, many of which are largely outside our control
Macroeconomic factors like inflation and lower consumer discretionary spending can reduce guest traffic and average transaction size, harming financial performance.
- NewRisks Related to Macroeconomic Conditions
Failure to meet market expectations for our financial performance or any announced guidance will likely adversely affect the market price and increase the volatility of our stock, and fluctuations in the stock market as a whole may also impact the market price and volatility of our stock
Failing to meet market financial expectations or announced guidance can decrease our stock price and increase its volatility.
Dropped
- DroppedRisks Related to our Brand Reputation and Restaurant Operations
Our investments in technology and automation to transform and enhance the experience of our employees and guests may not generate the expected results
- DroppedRisks Related to Cybersecurity, Data Privacy and IT Systems
Breaches or other unauthorized access, theft, modification or destruction of guest and/or employee personal, confidential or other material information that is stored in our systems or by third parties on our behalf could damage our reputation and expose us to potential liabilities
- DroppedRisks Related to Our Growth and Business Strategy
The market price of our common stock may be more volatile than the market price of our peers
- DroppedRisks Related to Sustainability Factors
Economic and business factors that are largely beyond our control may adversely affect consumer behavior and our financial results
Technology and automation investments may not generate expected results.
- DroppedRisks Related to Sustainability Factors
Our quarterly financial results may fluctuate significantly, including due to factors that are not in our control
Reworded
- 81% rewrittenRisks Related to Cybersecurity, Data Privacy and IT Systems
We are heavily dependent on information technology systems and failures or interruptions in our IT systems could harm our ability to effectively operate our business and/or result in the loss of guests or employees
Added sales forecasting and business analytics to the list of IT systems dependencies.
Was: We rely heavily on information technology systems and failures or interruptions in our IT systems could harm our ability to effectively operate our business and/or result in the loss of guests or employees
- 78% rewrittenRisks Related to Cybersecurity, Data Privacy and IT Systems
If we fail to fully comply with privacy and data protection laws and regulations, we could incur significant civil and criminal penalties and liabilities, suffer reputational damage, and adverse publicity
Added consumer protection laws to privacy regulations and noted risks to existing services and data.
- 49% rewrittenRisks Related to our Brand Reputation and Restaurant Operations
Food safety and food-borne illness concerns may have an adverse effect on our business by negatively impacting our brand, decreasing sales and increasing costs
Expanded food-borne illness risk sources to include distributors and employees, not just suppliers.
- 48% rewrittenRisks Related to Sustainability Factors
We are subject to evolving public disclosure obligations, including with respect to sustainability matters, which could expose us to numerous risks and could adversely affect our reputation and results of operations
Removed references to increasing stakeholder and investor focus on sustainability matters.
Was: We are subject to evolving public disclosure requirements and expectations, including with respect to sustainability matters, that could expose us to numerous risks and could adversely affect our reputation and results of operations
- 42% rewrittenRisks Related to Our Growth and Business Strategy
If we partner with third parties or acquire new businesses that do not align with our core values or that do not fulfill their contractual responsibilities and commitments, our brand reputation and international growth plans could suffer
Updated international footprint to 14 partner-operated restaurants in the Middle East and added plans for Mexico and Asia.
- 40% rewrittenRisks Related to Our Supply Chain
Shortages or interruptions in the supply of ingredients could adversely affect our operating results
Added beef and pork to the list of ingredients subject to Responsibly Raised requirements.
- 39% rewrittenRisks Related to our Brand Reputation and Restaurant Operations
Our use of third-party delivery services may not be profitable and substandard service may negatively impact our reputation
Updated delivery revenue dependency to over 16% for 2025 and added menu pricing risks on third-party platforms.
- 33% rewrittenRisks Related to our Brand Reputation and Restaurant Operations
The restaurant industry is highly competitive. If we are not able to compete successfully, our business, financial condition and results of operations would be adversely affected
Removed delivery aggregators and food delivery services from non-traditional market participants.
- 32% rewrittenRisks Related to Human Capital
Increases in the cost of labor, including mandated minimum wage increases and increases in the cost of health benefits, could adversely impact our business and profitability
- 27% rewrittenRisks Related to Human Capital
If we fail to comply with applicable employment and labor laws and regulations, it could have a material, adverse impact on our business
- 27% rewrittenRisks Related to Sustainability Factors
Climate change and volatile adverse weather conditions could adversely affect our restaurant sales or results of operations
- 24% rewrittenLegal and Regulatory Risks
We could be party to litigation or other legal proceedings that could adversely affect our business, results of operations and reputation
- 23% rewrittenRisks Related to Our Growth and Business Strategy
Our failure to effectively manage and support our growth could have a negative adverse effect on our business and financial results
All 22 risk factors
Headings as the filing states them, in filing order.
Risks Related to our Brand Reputation and Restaurant Operations
- 01Food safety and food-borne illness concerns may have an adverse effect on our business by negatively impacting our brand, decreasing sales and increasing costs49% rewritten
- 02Failure to maintain the value and reputation of the Chipotle brand could negatively impact our financial results
- 03The restaurant industry is highly competitive. If we are not able to compete successfully, our business, financial condition and results of operations would be adversely affected33% rewritten
- 04Our use of third-party delivery services may not be profitable and substandard service may negatively impact our reputation39% rewritten
Risks Related to Human Capital
- 05If we are not able to hire, train and retain qualified restaurant employees and/or appropriately plan our workforce, our growth plan and profitability could be adversely affected
- 06If we fail to comply with applicable employment and labor laws and regulations, it could have a material, adverse impact on our business27% rewritten
- 07Increases in the cost of labor, including mandated minimum wage increases and increases in the cost of health benefits, could adversely impact our business and profitability32% rewritten
- 08A failure to recruit, develop and retain effective leaders or the loss or shortage of management personnel with key capacities and skills could impact our strategic growth plans and jeopardize our ability to meet our business performance expectations and growth targets
Risks Related to Cybersecurity, Data Privacy and IT Systems
- 09We are heavily dependent on information technology systems and failures or interruptions in our IT systems could harm our ability to effectively operate our business and/or result in the loss of guests or employees81% rewritten
- 10If we fail to fully comply with privacy and data protection laws and regulations, we could incur significant civil and criminal penalties and liabilities, suffer reputational damage, and adverse publicity78% rewritten
Risks Related to Our Supply Chain
- 11Increases in the costs of ingredients, restaurant equipment and other materials could adversely affect our financial results
- 12Shortages or interruptions in the supply of ingredients could adversely affect our operating results40% rewritten
- 13If our supply chain capacity does not expand to support our new restaurant growth, our long-term growth goals could be impaired or delayed
Legal and Regulatory Risks
- 14We could be party to litigation or other legal proceedings that could adversely affect our business, results of operations and reputation24% rewritten
- 15We are subject to extensive laws, government regulation, and other legal requirements and our failure to comply with existing or new laws and regulations could adversely affect our operational efficiencies, ability to attract and retain talent and results of operations
Risks Related to Our Growth and Business Strategy
- 16If we are unable to meet our new restaurant opening goals, or maintain the attractiveness of our existing restaurants, our profitability could suffer
- 17Our failure to effectively manage and support our growth could have a negative adverse effect on our business and financial results23% rewritten
- 18If we partner with third parties or acquire new businesses that do not align with our core values or that do not fulfill their contractual responsibilities and commitments, our brand reputation and international growth plans could suffer42% rewritten
Risks Related to Sustainability Factors
- 19We are subject to evolving public disclosure obligations, including with respect to sustainability matters, which could expose us to numerous risks and could adversely affect our reputation and results of operations48% rewritten
- 20Climate change and volatile adverse weather conditions could adversely affect our restaurant sales or results of operations27% rewritten
Risks Related to Macroeconomic Conditions
- 21Our financial condition and results of operations have been, and may continue to be, adversely affected by a number of macroeconomic and other factors, many of which are largely outside our controlNew
- 22Failure to meet market expectations for our financial performance or any announced guidance will likely adversely affect the market price and increase the volatility of our stock, and fluctuations in the stock market as a whole may also impact the market price and volatility of our stockNew
Other Chipotle Mexican Grill 10-Ks
- FY2024 10-K risk factors25 risks
Chipotle faces heavy risks centered on food safety, supply chain limits for key ingredients like beef and avocados, and rising labor costs tied to minimum wage mandates.
Filed Feb 05, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.