Case Study On forecasting

Presented by: Achman Jain

A-43
Chiboodle sales grew 9.56% in 2015; Growth was
driven primarily by product segment Drinks
 Most of the growth in 2015 came from Old Stores
Sales by Old vs New Stores
100%

90%

80%
4,108,268,999.95 4,501,223,000.00
70%

60%

50% US$0 US$364,434,089

40%

30%
US$4,108,269,000 US$4,136,788,911
20%

10%
0%
2014 2015
Old stores New stores opened in 2015 Total
 Can’t continue to rely on new stores for growth since
new stores growth is declining
Number of new stores opened by year
300

predicted
250

200

150

100

50

0
“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

$ 147,399.85 $ 152,041.25 $ 152,041.25 $ 152,041.25 $ 152,041.25
store)

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 % 2.1% 2.1% 2.1% 2.1% 2.1%

(year on year)
 Project Crunch Sales Forecast:
Key Assumptions / Methodology

• Assumptions
Confidence in
Variable AssumedValue Rationale / Source
Assumption
Prices of salads $ 8.44 Average of competitors High
% of customers will
23% Survey High
buy additional salad

• Methodology
• Forecast sales per store = Current sales per store * growth rate
• Forecast sales = Forecast number of stores * Forecast sales per store
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
$ 700K $ 639K $ 583K $ 579K $ 574K
store)
Tacos (sales per store) $ 599K $ 627K $ 657K $ 688K $ 721K
Kids menu
$ 147K $ 152K $ 152K $ 152K $ 152K
(sales per store)
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 %
2.1% 8.1% 2.5% 4.4% 4.0%
(year on year)
Scenario Analysis: If we price salads at $8.44 & $10.38,
sales will grow to $5.4B & $6.5B by 2019, respectively
2015-2019 Revenue forecast, for different scenarios
$6.50
Billions

$6.30
$6.10
$5.90
$5.70
$5.50
$5.30
$5.10
$4.90
$4.70
$4.50
2015 2016 2017 2018 2019
Business as usual Project Crunch--Scenario 1 (Price salads mid-range)
Project Crunch--Scenario 2 (Price salads top-range)