forecasting case study: chiboodle inc
TRANSCRIPT
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
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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)