A customer wearing a protective mask enters a Chipotle Mexican Grill Inc. restaurant in San Francisco, California. .
David Paul Morris | Bloomberg | Getty Images
Chipotle Mexican Grill on Tuesday reported that its same-store sales rose more than 5% in its latest quarter, fueled by higher digital orders and the return of carne asada.
Citing the uncertainty caused by the coronavirus pandemic, the company declined to provide a forecast for same-store sales growth in fiscal 2021 but did say that it’s expecting a strong first quarter.
Shares of Chipotle fell 3.8% in extended trading. The stock hit an all-time high of $1,553.55 during trading earlier on Tuesday.
Here’s what the company reported for the quarter ended Dec. 31 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $3.48, adjusted, vs. $3.73 expected
- Revenue: $1.61 billion vs. $1.61 billion expected
Chipotle reported fourth-quarter net income of $190.9 million, or $6.69 per share, up from $72.4 million, or $2.55 per share, a year earlier. The company recorded an income tax benefit of $3.77 per share for the quarter.
Excluding an income tax benefit, corporate restructuring expenses and other items, Chipotle earned $3.48 cents per share, missing the $3.73 per share expected by analysts surveyed by Refinitiv.
Net sales rose 11.6% to $1.61 billion, meeting expectations.
Same-store sales rose 5.7%. The return of its carne asada in September boosted demand. CEO Brian Niccol said that the steak is expected to stick around into March.
Additionally, digital sales nearly tripled, increasing 177% compared with the same time a year ago, and accounted for almost half of the company’s quarterly revenue. Online sales surged 216% in Chipotle’s second quarter and 202% in its third.
So far in January, same-store sales have climbed 11%, fueled by the launch of cauliflower rice, which costs an extra $2 per order. And if the pandemic doesn’t worsen, the company is expecting same-store sales growth in the mid-to-high teens during the first quarter.
The company also said that it increased menu prices for delivery orders by an average of 13%. Third-party apps like DoorDash charge restaurants a commission fee, eating into their profits. Chipotle had said in previous quarters that the higher incidence of delivery orders fueled by the crisis had hurt its profit margins.
Executives also said that Covid-19 related costs, like performance bonuses and sick pay for employees who came into contact with the virus, weighed on margins.
The company opened 61 new locations during the quarter, relocated two restaurants and closed one. In fiscal 2021, Chipotle expects to open around 200 new restaurants, assuming that it encounters few construction and permit delays related to the crisis.
CFO Jack Hartung said that the company could resume stock buybacks at the end of the first quarter or in the second quarter, depending on economic conditions at the time.