Chipotle CEO Brian Niccol joins Yahoo Finance’s Alexis Christoforous and Brian Sozzi to discuss how Chipotle is faring amid the coronavirus outbreak.

Video Transcript

ALEXIS CHRISTOFOROUS: And I am delighted now to welcome Brian Niccol, CEO of Chipotle, with us this morning. Brian, always good to see you. Boy, oh, boy, this has got to be a challenge that your restaurant and restaurants all around us has never seen before. Tell us how Chipotle is navigating through this right now.

BRIAN NICCOL: Yeah, good morning. Yes, obviously, this is a huge challenge. But I think, fortunate for us, we've got some outstanding employees that we are just taking the approach of making sure that we keep them healthy and safe. And as a result, those folks that are willing and able to work-- you know, we've given some assistance pay, which is a 10% increase in hourly pay.

And our employees, really, have just been-- I would call them, you know, something really special, because they continue to show up, provide, you know, our food with integrity to their communities. And our priority has been to support them every way possible so that we can continue to operate our restaurants for carry-out, delivery, and take-away but really do it in a way where they know they're supported. And you know, their safety is our first priority. And then, obviously, for our customers, we want to provide that service so that they can have access to our food during these really challenging times.

BRIAN SOZZI: Brian, Brian Sozzi here-- always good to catch up with you. So 98% of your restaurants are, in fact, delivery-based. What type of sales gains are you seeing in these restaurants, given the fact that they're probably closed to go in there and eat and sit down?

BRIAN NICCOL: Yeah, so we're very fortunate that, over the last couple of years, we've been investing heavily into our digital business. So I think, Brian, we've talked about this in the past. We've got a second digital kitchen in just about every restaurant now. And what that provides is the ability for us to take orders online in the app and also partner with third-party aggregators to do delivery.

And we also have delivery in our app. And so, that's been a business that's been growing for us. You know, last time, I think, we talked, we were just shy of 20% of our business. That continues to grow, obviously, in this environment. And we're going to continue to invest in that during this environment. We've got free delivery going, really, for the whole month of March.

And then, we'll obviously assess whether or not we should continue that into April. But we're fortunate that we invested in that prior to this coronavirus issue. And you know, as a result, it's allowed us to keep our restaurants open. So we've been able to keep our employees employed and then, obviously, we've been able to serve food to those people and customers that would love to have access to Chipotle.

ALEXIS CHRISTOFOROUS: Brian, talk to us a little bit about the supply chain right now for your restaurants. Are you being supplied in a timely manner? Are you able to get the products that you need? And I know that you work a lot with local communities and farmers. What are you hearing from them?

BRIAN NICCOL: Yeah, so, I've got to say, you know, the supply chain has held up remarkably well. It's stayed very strong. We've got really magnificent partners that we work with, from produce to proteins to all of our other products that we need in the restaurants to run these restaurants effectively.

And we do have a group of local farmers, small farms, family farms that, you know, I'm hoping the stimulus bill-- I haven't had a chance to go through it in detail-- will be able to support them. I know they have mentioned that they need the additional support to manage through these challenging times. But you know, we're going to do everything we can to support them.

You know, we're going to continue buying the produce the way that they're farming it, which is through regenerative farming and then, obviously, you know, all the approaches they take to animal welfare so that we can get the right meats into our restaurants. So we're seeing no issues right now. But obviously, we want to stay close to them and keep them supported.

BRIAN SOZZI: Brian, have you been able to get any rent relief from some of your landlords? We had Cheesecake Factory come out this week, saying they really need that rent relief. What are you seeing?

BRIAN NICCOL: You know, people, I think, are definitely going to be having those conversations. We'll be having those conversations. Fortunate for us, we've got a really strong balance sheet. You know, we have no debt and close to a billion dollars of cash. And you know, that gives us the flexibility to be really smart about how we approach our leases and then, obviously, how we approach our business going forward. So you know, those conversations are going to be had. I don't have anything to report on it right now.

ALEXIS CHRISTOFOROUS: All right, Brian Niccol, thanks very much. Your company definitely in an enviable position right now with preference on balance sheet, as you say. Thanks for being with us as always, CEO of Chipotle.