After a dismal three years of food-safety issues, Chipotle saw a strong first quarter, and CEO Brian Niccol is confident about the company's future. Since the outbreaks, part of Chipotle's turnaround plan was to introduce new menu items, but they did not prove successful.
In an interview, Niccol described new plans, which may include drive-thrus, longer hours, mobile ordering, or menu items that are more thoroughly tested. But Niccol resists offering deals and breakfast, despite what Bill Ackman, Chipotle's largest shareholder, advises:
“I’ve been very clear with him: Not now, Bill and I have had a couple of really good conversations. He may have some ideas that I don’t think are the right ones now.”
"While the company made notable progress during the quarter, I firmly believe we can accelerate that progress in the future. We are in the process of forming a path to greater performance in sales, transactions, margins and new restaurants. This path to performance will be grounded in a strategy of executing the fundamentals while introducing consumer-meaningful innovation across the business. It will also require a structure and organization built for creativity, action and accountability. Finally, Chipotle will have a culture that is centered on running great restaurants, putting the customer first, innovating for today and tomorrow, supporting each other, and delivering on commitments. The future will be meaningful at Chipotle."
(Disclosure: I own a modest amount of Chipotle stock.) Image source.
- Assess the earnings call or press release. What business jargon do you identify? Is it too much, or is it appropriate for the situation and audience?
- Niccol is challenging Ackman's ideas, which is risky for a new CEO. How do you interpret his statement? Again, is what he says appropriate for the situation, or should he present his views differently?
- Would you say that Niccol is demonstrating courage in his statement about Ackman? Why or why not?