Chiboodle Inc. Case Study

Shu Tsao

Chiboodle sales grew 9.56% in 2015; Growth was driven primarily by product segment Drinks

$1,724,000,374.16 $1,710,464,739.84

$638,726,640.71 $967,762,945.51 $349,105,048.33

$360,097,840.00

$1,396,436,936.75 $1,462,897,474.65

Sales by Product CategoryBurritos Drinks Kids meau Tacos

2014 2015

Most of the growth in 2015 came from Old Stores

2014 20150%10%20%30%40%50%60%70%80%90%

100%

US$4,108,269,000 US$4,136,788,911

US$0 US$364,434,089

4,108,268,999.95 4,501,223,000.00

Sales by Old vs New Stores

Old stores New stores opened in 2015Total

Can’t continue to rely on new stores for growth since new stores growth is declining

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

0

50

100

150

200

250

300

Number of new stores opened by year

pre-dicted

“Business as Usual” Forecast: Revenue will grow to $489M by 2019

Year 2015 2016 2017 2018 2019

Number of stores 2443 2596 2697 2769 2831

Sales per store (total) $ 1,842,498.16 $ 1,874,895.34 $ 1,904,107.69 $ 1,934,841.51 $ 1,967,164.76

Burritos (sales per store) $ 700,149.30 $ 694,652.22 $ 689,198.30 $ 683,787.20 $ 678,418.59

Tacos (sales per store) $ 598,811.90 $ 627,311.12 $ 657,166.70 $ 688,443.19 $ 721,208.23

Kids menu (sales per store) $ 147,399.85 $ 152,041.25 $ 152,041.25 $ 152,041.25 $ 152,041.25

Drinks (sales per store) $ 396,137.10 $ 400,890.75 $ 405,701.44 $ 410,569.86 $ 415,496.69

Chiboodle total sales $ 4,501,223,000.00 $ 4,595,748,683.00 $ 4,692,259,405.34 $ 4,790,796,852.86 $ 4,891,403,586.77

Sales growth % (year on year) 2.1% 2.1% 2.1% 2.1% 2.1%

Project Crunch Sales Forecast:Key Assumptions / Methodology

• Assumptions

• Methodology• Forecast sales per store = Current sales per store * growth rate

• Forecast sales = Forecast number of stores * Forecast sales per store

Variable Assumed Value

Rationale / Source

Confidence in Assumption

Prices of salads $ 8.44 Average of competitors High

% of customers will buy additional

salad23% Survey High

Project Crunch Forecast: With Project Crunch, we forecast revenue to grow to $5,416M by 2019

Year 2015 2016 2017 2018 2019

Number of stores 2443 2596 2697 2769 2831

Sales per store (total) $ 1.842M $ 1.875M $ 1.849M $ 1.880M $ 1.913M

Burritos (sales per store) $ 700K $ 639K $ 583K $ 579K $ 574K

Tacos (sales per store) $ 599K $ 627K $ 657K $ 688K $ 721K

Kids menu(sales per store) $ 147K $ 152K $ 152K $ 152K $ 152K

Drinks (sales per store) $ 396K $ 401K $ 406K $ 411K $ 415K

Salads (sales per store) $ $ 56K $ 51K $ 50K $ 50K

Chiboodle total sales $ 4,501 M $ 4,867 M $ 4,987 M $ 5,206 M $ 5,416 M

Sales growth %(year on year) 2.1% 8.1% 2.5% 4.4% 4.0%

Scenario Analysis: If we price salads at $8.44 & $10.38, sales will grow to $5.4B & $6.5B by 2019, respectively

2015 2016 2017 2018 2019 $4,500,000,000.00 $4,700,000,000.00 $4,900,000,000.00 $5,100,000,000.00 $5,300,000,000.00 $5,500,000,000.00 $5,700,000,000.00 $5,900,000,000.00 $6,100,000,000.00 $6,300,000,000.00 $6,500,000,000.00

2015-2019 Revenue forecast, for different scenarios

Business as usual Project Crunch--Scenario 1 (Price salads mid-range)Project Crunch--Scenario 2 (Price salads top-range)