Jim Cramer Says 'Chipotle Is Not A One-Man Show' As He Interviews Interim CEO
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Chipotle (NYSE:CMG) was rocked when CEO Brian Niccol announced he was moving to Starbucks (NASDAQ:SBUX), replacing Laxman Narasimhan. Chipotle's stock tumbled on the news. Despite that initial drop, many analysts remain bullish on the stock. As of this writing, the stock is up over 27% year to date.
What will Niccol's departure mean for the company’s future? CNBC's ‘Mad Money’ host Jim Cramer recently sat down with Chipotle's interim CEO Scott Boatwright and President Jack Hartung. Cramer pointed out Chipotle is not a one-man show with a deep bench.
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After grilling the two leaders about the popularity of Chipotle's brisket offerings, Cramer noted that the leadership transition should be fairly smooth. President Jack Hartung agreed, saying, "We have a lot of momentum behind us and a lot of opportunity."
Interim CEO Scott Boatwright has led operations at Chipotle for over seven years. He was previously the Chief Operations Officer and spoke to the strength of Chipotle's teams, calling it a "world-class people organization." Boatwright sees the next challenge ahead for the company to be around scaling growth. The company has grown to over 3,500 restaurants and aims for 7,000 restaurants in North America. Chipotle has outperformed when it comes to foot traffic. Data from Placer.ai showed that foot traffic from August 2023 to May 2024 was up 17% compared to a 5% increase for other fast food and quick service restaurants.
The company is also expanding internationally. It has two restaurants in Kuwait and just opened its first franchise restaurant in Dubai. Hartung said that the company has had incoming franchise requests for over a decade but has taken a careful approach to expansion. Hartung noted that when the company expanded in Europe around 10 years ago, they didn't get the food dialed in correctly, which made a big difference. He said that is improving and that Europe will be "a growth vehicle for us very shortly."
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For Chipotle, the focus is on three things: premium ingredients, affordable food and attractive margins. By keeping these three precepts in mind, Hartung believes that the company can continue to expand without losing what makes the brand beloved by so many diners.
Cramer pointed out that Chipotle has made a few millionaires among its employees. Boatwright sees company culture as very important and rewarding workers is a part of that.
Chipotle has also been a leader in artificial intelligence, not just through using robots for food preparation but through integrating AI into every aspect of the business. Hartung stressed that the company will not use technology to remove personalization. Instead, the company uses automation on the back end to help with tasks that workers find less enjoyable, such as coring avocados. "We are taking the long game here. We will work with outside partners and custom-develop some of this innovation so that the entire experience for our crew will be better," added Hartung.
Investors who Niccol's move may have rattled may be comforted that, according to the President and interim CEO, Chipotle's plans are still moving forward on the same path that they were before the switch. Automation should continue to drive expansion and the company remains laser-focused on the things that made it successful in the first place.
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This article Jim Cramer Says 'Chipotle Is Not A One-Man Show' As He Interviews Interim CEO originally appeared on Benzinga.com