Chipotle Mexican Grill’s stock (CMG) continues to face downward pressure in Wednesday’s trading session, as investors digest the news that long-time Chief Financial Officer Jack Hartung will be stepping down from his role. With Hartung set to retire at the end of 2024, the company has named Adam Rymer, currently serving as Vice President of Finance, as his successor.
Yahoo Finance executive editor Brian Sozzi breaks down the details and what to expect from Chipotle’s stock amid such a transition.
For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.
This post was written by Angel Smith
Video Transcript
Shares of Chipotle are extending its losses by just a bit.
We’re off about a half of a percent here this morning after the company announced its chief financial Officer Jack Hartung, friend of the show will retire after nearly 25 years with the company.
Now Hartung will continue in his role through the end of the year and then he will be replaced by Adam Rymer.
He is Chipotle’s current Vice President of Finance for More on Chipotle C Sweet shake up.
We want to bring in our very own Brian Sazi, executive editor here, Brian.
So what does this ultimately mean here for Chipotle?
Well, I wrote on the uh Yahoo Finance Live live blog.
Uh This morning, I encourage everybody to check it out.
Uh That Jack is one of my favorite CFO S right along with Jack Hartung, uh and the CFO over over over at Walmart.
And really because it reflects a few things, he’s just a good human being.
Uh He knows his numbers, strategic operator, he cares about his employees.
So for me, he checked a lot of boxes in all the years that I’ve, I’ve gotten to know him and really I thought we went back to our, our arsenal of time with Jack and I really thought this quote on him coming uh talking to us in April about the outlook for inflation really rung true and, and remains relevant to this day.
Take a listen, they will keep the chipotle in their budget for a longer period of time.
We like the underlying trends that we saw in the first quarter.
They’ve continued into April so far and we’re just going to keep motoring.
And you know, our our view is if we keep executing at a high level, customers will keep visiting.
And I didn’t want to make this sound like an obituary.
Jack is very much alive.
I exchanged a brief email with him last night.
I don’t think Jack is done.
I just, I’m unsure what his next chapter was is uh he didn’t tell me now, Hugh Johnson.
Now he spent mid decades over at Pepsi Co. Now he uh in November of 2023.
He is now the CFO of Disney.
Do I see, Jack?
Maybe in late 2025 early 2026 maybe doing something similar.
Perhaps bottom line is, Jack has made a lot of money and what people don’t realize he was actually on the board of Chipotle when it was owned by mcdonald’s.
So he is literally grown this chain right along initially with founder Steve from 200 locations.
Now, he’s been of course leading it with Brian Nichols, the CEO to over 353,500 locations.
He hands off to his finance team, his new CFO, a playbook to take this chain to about 7000 locations over the next decade.
I mean, Jack has done a heck of a job, has made a lot of money doing it, but above all else, he’s just a good human being.
I mean, it’s like, what more could you ask for both from an investor standpoint?
And if you’re, if you are Jack and you’re looking at all of your accomplishments as the CFO of Chipotle as a CFO, you have to give out a lot of nos to people.
You almost have to manage up even to the CEO as Sean and I were talking about at our desks, even to say here’s what we can spend on and here’s what is going to be risky for us to spend on, but we’ll still green light and here’s what’s an absolute no.
So it’s a tough position to be in.
But when you’re going out to shareholders saying, hey, we get you a 50 for one stock split or hey, we’re able to guarantee or deliver these shareholder returns over an extended period of time.
Like you kind of rest on that Laurel and you say, you know what I’m gonna right off into the sunset and I could decide where to chart my course from here.
Now I saw on the Mark Brad really?
I don’t think there was anything left for Jack to achieve.
You mentioned the stock split.
I mean, he’s leaving essentially on top and, and just ask you real quick.
I think it was our executive producer, Val Caval brought this up, you know, thinking like why is the stock down when you lose this type of CFO?
I mean, you have to keep in mind that Chipotle’s stock has been up almost like this in a straight line for the past two years.
So it is a stock very much price for perfection.
You can see that gain uh in Chipotle and the street doesn’t like change.
You know, they, I think they are used to Jack, they’re used to how he communicates stories.
They’re used to how he does business.
He comes out with earnings guidance, they beat it.
Uh and not that the incoming CFO is inexperienced, but they haven’t been a CFO before.
Uh and the street is unsure how they will communicate guidance.
How will they deliver earnings?
Will they raise prices?
Won’t they raise prices?
So anytime you see this type of change, sometimes it’s not well received.
But again, good luck to the incoming CFO.
If they were trained by Jack, they will probably do a good job.
Adam Rymer, it looked like within the press release, he’s been there for 15 years.
So a veteran for Chipotle, we see what’s of balls over 15 years.
Indeed.
All right, thanks.
So much for taking the time this morning.